LONDON — Keeping demand flowing to hotels takes significant effort and sound strategy, and revenue managers in the United Kingdom now have more external factors to contend with.
Hoteliers, consultants and information technology specialists speaking on two panels at this week's Global Revenue Forum said the industry is focused on what it can control and adapting when necessary.
Budgeting and cost control are affected by economic factors such as inflation, and understanding why and when guests are ready to book their stays is a constantly moving target as booking windows shift.
At the “Leaders” session, Neil Braude, chief operating officer of The Imperial London Hotels, said the discipline of revenue management has shifted a great deal in the past two years due to the presence of many more variables.
“Where do you want the business to be in two years’ time?” he asked. “And that is difficult when it is difficult to budget cash flows and energy-cost increases. It is a process.”
Collaboration from other disciplines and departments, such as sales and marketing, helps revenue managers to make the best decisions, he added.
Frank Reeves, co-founder and CEO at booking technology firm Avvio.com, said “the different disciplines have to share guest expectations as their ultimate goal.”
Hoteliers have more control over how to best utilize the space at their properties to drive revenue, which could include partnering with third-party providers in selling and packaging services, experiences and other amenities and using technology, Braude said.
He added he views artificial intelligence as a facilitator of all the things hoteliers would rather not be doing.
“AI requires a lot of work to add content and reduce pain points,” he said.
Outlook for Inbound Tourism to the UK
During a session focused on demand projections for the United Kingdom, panelists said travel has changed in the past three years and is not anywhere close to resembling pre-pandemic patterns.
Ben Godon, head of hospitality asset management at business advisory Colliers, said he cannot put his finger on where U.K. hotel demand will settle.
“Realistically now, guests will jump on a plane and seek the sunshine,” he said.
Godon added that China, with its continued pandemic pain and complicated visa process, will not feature in hotel demand this year, although travelers from China will return eventually.
“Some of the pain is being alleviated by the return of group travel. U.S. [inbound] performance to London has returned to being strong, and there is even some of that demand going to regional United Kingdom. Large group hotels in London will do well this year,” he said.
David Bailey, strategic advisor of growth and expansion at Resident Hotels — and consultant senior advisor at CBRE Hotels — said businesses must travel, and hoteliers must try and sell to them.
“[Companies know] it is necessary to travel to reach [their] commercial objectives,” he said.
He added hoteliers must continue seeking every bit of business, a focus certainly shared by owners.
“If you’re not selling to someone, someone else will,” he said.
This year will certainly be challenging for U.K. hoteliers, Bailey said.
“The V-shape recovery took everyone by surprise, [but now] the [International Monetary Fund] says the U.K. is to be the only major economy to be in recession this year, going from the best economy in the G7 to the worst, a high-tax economy with large national debt,” he said.
On Thursday, the Bank of England raised interest rates by 50 basis points to 4% in an additional move to curb inflation.
Regardless of the macroeconomic environment, investors in hotels want results, Godon said.
“Investors’ expectations are for growth, period,” Godon said.
Despite a challenging start of the year, Godon said, “ownership is looking at high returns on investment. [The first quarter] 2023 results will be touch-and-go.”