100 Years of Solitude: AI and Hotel Commercial Optimization

I knew at some point I would be writing about how AI is changing the hotel and travel commercial optimization world. Again. Why again? Because history is repeating itself.
 
When I think about what’s happening in hotel and travel marketing right now, it reminds me of Gabriel García Márquez’s One Hundred Years of Solitude. (In my opinion, one of the best books ever written. I highly recommend it.) Here’s a short summary of the book, so you can get a feel for what I’m trying to share.
 
In García Márquez’s masterpiece, the Buendía family spends a century repeating the same mistakes. Generation after generation, men named José Arcadio chase the same obsessions and make the same catastrophic choices; at the same time, they are convinced that they are doing something entirely new. The fictional town of Macondo rises, flourishes, and crumbles. At the very end, the last surviving Buendía finally deciphers the ancient manuscripts that predicted it all. The tragedy was not that their fate occured. It was fact that it was avoidable.
 
Likewise, we have all been at this technological crossroad before. The technology is different, but the fundamental challenge is identical. A new system has arrived that will quickly dominate the way travelers research and discover hotels. The system runs on information. Hotels that feed it the right information in the right format will get recommended. Hotels that don’t will be lost.
 
Folks, we already did this with Google in the late 1990s and early 2000s. The manuscripts are there (just scroll back to my older blog posts). We just need to read them.
 

September 4, 1998

 
In 1998, the internet was new and chaotic, and nobody in hospitality knew what to do with it. Hotels had websites (if you could call them that): static pages with a phone number, and maybe a jpeg of the lobby that took two minutes to load on a dial-up connection. The idea that a traveler might book a room through a website seemed absurd… that’s what travel agents were for!
 
Then came Google. And everything changed.
 
Suddenly there was a system, and an all-encompassing algorithm that provided a bridge (or a barrier) between the hotel and the traveler. The algorithm didn’t care how beautiful your printed brochure was, how many years you’d been in business, or what your general manager thought about your property’s reputation. It read your website. It counted your words. It looked at your structure, your links, your load speed, your metadata. And based on what it found, it decided whether or not to send travelers your way.
 
The hotel commercial optimization professionals who grasped this early did something that felt deeply counterintuitive at the time: they started writing for a machine! They optimized page titles and header tags. They built content around the specific phrases travelers were typing into search boxes. They structured their websites not just to look good to human eyes, but to be readable, “crawlable” and “rankable” by digital spiders that had never stayed in a hotel and never would.
 
What about the hotels that ignored it? They still received bookings from offline channels and online travel agencies (OTAs). OTAs have always been the largest investors in technology, as they do not have any real assets to maintain and pay for. The hotels that thrived were the ones who were willing to take the leap and join the new world.
 

The Banana Company Arrives… Again

 
In One Hundred Years of Solitude, the banana company arrives in Macondo with promises of prosperity and modernity. It transforms the town,  bringing electricity, railways, and a new kind of commerce. It also reshapes everything around its own needs, on its own terms, whether Macondo is ready or not.
 
The AI revolution in hotels and travel feels a lot like that arrival. ChatGPT launched to the public in November 2022. Within months, millions of people were using it to plan trips. By 2024, Google had integrated AI Overviews into its search results. That means that for many hotel-related queries on Google, Gemini is generating the answer directly on the results page. Perplexity, Microsoft Copilot, and Gemini are all training on existing web content and delivering hotel recommendations with confident, authoritative directness.
 
Traveler behavior reinforces this story. Fewer clicks, more answers. Less browsing, more asking AI. The question has shifted from “hotels in Barcelona” to “find me the best design hotel in Barcelona’s Gothic Quarter for a solo traveler who wants walkability and a rooftop bar.” That’s not a simple search query…that’s a conversation. And AI answers it in one response.
 
The discovery moment has moved. It now happens inside an AI conversation, not on a search results page. The hotels that show up in that conversation are the ones that have given AI what it needs to understand them.
 
Sound familiar? It should. 
 

The Patterns Are Already in the Manuscripts

 
The Buendías didn’t see what was happening, even though the answers were right under their noses. Melquíades left manuscripts in the house that contained the entire history of the Buendía family: every birth, every death, every mistake. The tragedy was that nobody translated them until it was too late.
 
The secrets of technology-driven optimization for hospitality and travel are similarly well-documented if you know where to look. The same pattern has played out three times now with increasing speed.
 
Wave One: The Website (Late 1990s)
Hotels had to build a digital presence from scratch. The challenge was digital existence: getting online, making information available by creating a basic web infrastructure. The winners were the early adopters who took the medium seriously before their competitors did. 
 
Wave Two: Search Engine Optimization/Paid Marketing (Early 2000s–2010s)
Having a website was no longer enough. It had to be findable. The challenge shifted to figuring out how to  structure your hotel’s online content so that Google’s crawlers would read it, rank it, and serve it to travelers at the right moment. This is when keywords, metadata, page structure, and link building became core marketing disciplines for hotels (otherwise known as search engine marketing). When that was not enough, Google Ads (paid media) provided a new superhighway to success; the smartest hotels participated in both organic and paid marketing efforts to maximize their exposure and revenue.
 
Wave Three: AI Optimization (Now)
Being findable on Google today isn’t enough. Now you have to be intelligible to AI. The challenge has shifted again, only this time to extractability. AI systems need to read your website and understand it with precision: what you offer, where you are, who you serve, and why someone should choose you. The hotels that crack this code will be the ones AI recommends. The rest will be invisible in the new discovery moment. 
 
Each wave has required writing for a new kind of reader. In 1999, that reader was a human with a modem. In 2005, it was a search crawler (GoogleBot). In 2025, it is a large language model, agentic AI. 
 
The fundamentals of each wave are strikingly similar. Be present, be structured, and be specific. Give the system what it needs to understand you. Don’t hide important information in formats the system can’t read. In my experience, the hotels that struggle in each new wave are almost always ones who built beautifully for the previous wave and then forgot to adapt.
 

What AI Is Actually Reading — And What It Can’t

To optimize for AI the way previous generations optimized for Google, you have to understand how AI reads. Simple answer: it reads like a very thorough, very literal research assistant who has never visited your hotel and has no patience for poetry, adjective-heavy word salads, or “good vibes” content.
 
AI training bots (GPTBot,  Google’s Gemini crawlers, etc) scrape the open web and ingest text. They build their understanding of your hotel from whatever text they can find: your website, your press coverage, your reviews, mentions on travel blogs, OTA listings, social media posts. They assemble a picture of your property from all of it, based on what they can actually read and process.
Here is what they cannot process (yet):
  • Images without text descriptions
  • Videos without transcripts
  • Text that only appears after a JavaScript interaction
  • Information locked inside PDFs or interactive widgets
If your hotel’s most compelling selling points live in a drone video on your homepage with no accompanying text, AI doesn’t know about them.
 
I am old enough to remember that hotels had a similar issue with early search engines. Google couldn’t read Flash or index images. Hotels that built their entire websites in Flash (and many did) were effectively invisible to search. All hotels over time fixed that. Now, all hotels will need to adapt to the AI equivalent. 
 
Hotel content is moving from the traditional keyword stuffing festival to AI-friendly, very specific and factual content written in plain language. We are going to move away from content such as “nestled in the vibrant heart of the city” to “located at 45 Park Lane, a four-minute walk from Hyde Park and eight minutes from the nearest Tube station.” In Food and Beverage, we will move from “an unparalleled dining experience”  to “our restaurant serves modern European cuisine and is open for breakfast, lunch, and dinner, 6am -10pm, with a dedicated tasting menu available Tuesday through Saturday.”
 

Time to get my quote in:

“Adjectives don’t train AI. It feasts on facts.”- Vikram Singh
 

The Ghost in the Machine: Agentic AI Age

Even as I write this, I can see a wave of technology that goes beyond anything we have seen to date. This is where hotel owners need to pay very close attention, because it will change not just how travelers find hotels, but also how they will interact with them in the very near future.
 
An AI agent is not a search engine or a chatbot. It is a system that takes instructions from a human and then acts in the world to fulfill them autonomously and across multiple steps using real tools. An AI agent can browse the web, fill out forms, send emails, make reservations, and complete transactions. It operates a virtual browser with a virtual keyboard and mouse, navigating websites the way a human would, except faster, more literally, and without the patience to decode ambiguous interfaces, scrolls and images.
 
The implications for hotels and travel are profound. Right now, a traveler might ask an AI: “Find me a four-star hotel in Lisbon available the week of June 15, with a rooftop pool and breakfast included, and book the best value option under 300 Euros a night.” The current generation of AI assistants would research and present options for the person to book. The next generation will research it and complete the booking… if your website’s booking engine is navigable by an automated agent. Otherwise, they will find another hotel, or another way to book that may include fees for your hotel.
 
The travel agent visiting your website on behalf of a future guest is not human. It will not respond to atmosphere or beautiful photography. It is looking for machine-readable information + functional booking path. If it encounters a JavaScript-heavy booking widget that requires cookies, a hover menu that doesn’t render without a mouse, or a rates page that loads dynamically…game over. It will not send you an email. It may simply move on to the next comparable property.
 
Early agentic systems are already operating. The infrastructure is being built at warp speed. The hotels that have clean, structured, machine-readable websites with clear booking paths will have a natural advantage when agentic AI goes mainstream. The ones that built elaborate interactive experiences for the human eye may find themselves bypassed entirely.
 
In the fictional town of Macondo, those with the most elaborate houses were were often the ones least prepared when the world changed around them. Stay nimble, move fast.
 

Optimization Is a Permanent Discipline

After almost 30 years of working in commercial optimization, I am reading and learning even more today than when I started. There is no final destination in this business. Hotel revenue optimization is a permanent discipline that requires ongoing study, as things are always in flux.
 
In  García Márquez’s novel, Macondo’s decline wasn’t inevitable. It was chosen, one small failure to adapt at a time. Hotel commercial optimization has its own version of this danger. 
 
Every wave of optimization has been about the same thing: giving the gatekeeper system what it needs to understand and recommend you. In 2000, that gatekeeper was a search engine ranking algorithm. In 2025, it is a large language model. In 2030, it will be something else we can’t yet fully describe.
 
Hotels that thrive over time share a common orientation: they take the new mediums seriously. They don’t wait for the technology to become mainstream before they adapt. They read the manuscripts early. 
 

Conclusion

At the end of One Hundred Years of Solitude, the last Buendía finally deciphers Melquíades’ manuscripts. But we are not at the end of our story. Hotel marketers are holding the manuscripts right now. The pattern of technology-driven optimization is recognizable. We know how this wave works because we have watched previous waves. We know that AI is transforming travel discovery because the traveler behavior data is already showing it. We know that agentic AI is coming, because the infrastructure is being built in plain sight.
 
The question is not how AI will reshape how hotels are found and booked. The question is whether your hotel will continue to rise to the occasion, one wave after another.
 

The important lesson here is to always be present and paying attention. To quote the legend himself:

“It’s enough for me to be sure that you and I exist at this moment.” — Gabriel García Márquez
 
 
 

Superstar Hotel Asset Managers: Are You Working With One?

In almost three decades of working in hotel commercial optimization, I’ve been fortunate to work with some of the world’s greatest asset managers (AMs). I’ve had a front-row seat while they launched new hotel brands, rebranded legacy properties, and turned around struggling hotel assets. They made impossible real estate transactions seem easy and turned completely lost hotels into profit-making machines.

On the flip side, I also encountered a few well-intentioned asset managers who inadvertently sabotaged the hotels they were meant to optimize. Of course, it is the disaster hotel projects that have taught me the most. Nothing teaches like failure: you employ the same winning strategies and work just as hard, but unfortunately end up with a completely different outcome.

In the hotel real estate game, an asset manager either drives exceptional value or becomes the biggest obstacle to success. They’re the critical link between operations, commercial efforts, finance, brands, banks, and owners. Heavy is the head that wears the asset management crown.

Let’s start with two hard facts.

Hotel Operations Are Getting More Expensive

Labor, insurance, and utilities are skyrocketing globally and drastically changing the economics of running a hotel. Labor costs have increased 20% to 30% since 2019, while insurance premiums have gone up 2X or even 3X for properties in some regions. Energy costs remain volatile, and tariff/supply disruptions have driven up the cost of everything from linens to cleaning supplies.

Chasing top-line revenue these days, while ignoring acquisition costs and the expense of servicing those newly acquired guests, is a race to the bottom. Every guest comes with incremental costs (housekeeping, utilities, amenities, wear and tear, etc). Then there are acquisition costs (paid media ads, OTA commissions, etc) that were needed to compete and capture demand in the first place. Margins are eroding top-line growth so much that even when revenue is up, it feels like you are building a sandcastle on the beach at high tide.

NOI Is King

I learned this lesson early from one of the industry’s asset management legends. Back then, I was obsessed with revenue growth, outpacing the competition, and celebrating top-line wins. During one project, we replaced a prominent brand at a major city-center asset and executed it perfectly. Revenues soared! I was flying high and then the AM told me something life-altering:

“Vikram, this business is all about NOI. Nothing else matters.”

The best asset managers understand that Net Operating Income is the only metric that truly counts. Vanity metrics like ADR (Average Daily Rate) and RevPAR (Revenue Per Available Room) mean nothing if they don’t flow to the bottom line. It’s like bragging about your gym session while eating a sleeve of Oreos.

Even EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) can be massaged through accounting tricks. NOI hits differently. It’s the unvarnished truth of operating performance; it dictates cap rate and terminal value. Rational buyers don’t pay for good vibes, top-line revenue, market share, or five-star reviews. They buy cash flow. Period.

Top 6 Traits of Great Asset Managers

Great asset managers operate differently. They are exceptional because they are:

1. Chief Troubleshooting Officers

When crisis hits (and in hotels, it always does), great asset managers don’t panic, deflect, or wait for someone else to fix it. They step in and make the right calls.

I’ve watched them operate during natural disasters, lender meltdowns, team implosions, and other crises that would paralyze lesser mortals. No finger-pointing. No useless committee meetings or elaborate emails…just clear-headed decision-making under pressure.

When the proverbial “s*itstorm” hits,  they manage the crisis, fix problems, and then position the property to emerge stronger on the other side.

2. Messengers of Reality

Great asset managers tell owners the truth about their asset. No “glazing,” as the kids say these days! They definitely do not fuel “we’re the greatest hotel in the world and there is nobody like us” delusions.

If the elevators sound like they’re auditioning for a horror movie and the carpet hasn’t been replaced since the Obama administration, they’re not going to be presenting a luxury hotel budget. They explain to the owners that you can’t charge $500 a night for a property that smells like a mix of wet dog, nostalgia, and teen spirit.

They keep post renovation expectations grounded. An asset refresh does not equate to the discovery of the lost city of Atlantis when you’re writing press releases.

When major capital investment is genuinely needed, they fight for it with data and realistic projections that make owners reach for their checkbooks. When capital investment is not feasible, they right-size expectations and find creative ways to compete within the asset’s current reality.

3. Protecting Margins Like Their Life Depends on It

Great asset managers obsess over the unglamorous details that others ignore: laundry contracts, valet costs, energy procurement, insurance renewals, technology stack efficiency, and vendor consolidation.They know small line items can quietly erode profitability like termites in the foundation. A outdated/bloated tech stack here, an auto-renewed contract there—death by a thousand small cuts.

While everyone else is hypnotized by top-line revenue, great AMs are in the weeds ensuring that the bottom line doesn’t hemorrhage cash. These days, effective cost management is key to delivering NOI. 

4. Empowering, Not Micromanaging

Great AMs trust their operators to operate and their commercial teams to drive revenue. They set clear KPIs, remove barriers, provide resources, and then do something amazing: get out of the way.

They understand their job is to create conditions for success, not to cosplay as the GM, revenue manager, or marketing director. They don’t need to approve every decision, be cc’d on every email, or weigh in on whether the lobby should have red or yellow flowers on Tuesdays.

They hire smart people, give them the tools and autonomy to succeed, and hold them accountable to outcomes, not processes. When wins happen, they amplify rather than claim credit. In return, the hotel teams move faster, innovate more, and stick around longer.

5. Making Hard Decisions

This is where great asset managers truly separate themselves: they make the painful calls everyone else wants to avoid.

When the numbers say it’s time to exit a failing management contract, they don’t kick the can down the road for another quarter. Instead, they pull the trigger, own the decision, and manage the transition. When a vendor relationship has turned toxic or a key team member isn’t performing despite multiple chances, they don’t hope the problem fixes itself. They act.

Likewise, when they have to deliver bad news to ownership (ex: market reality has shifted, renovations are needed), they never throw the team under the bus to save face. They take ownership, explain what changed, present a clear path forward. They protect their team’s credibility while solving the problem.

6. Catalysts, Not Oversight Overlords

Great asset managers create energy in the room. When they walk into a strategy session, the team doesn’t reach for excuses—they reach for their best ideas. People lean in instead of checking out.

They show up to catch people doing things right and amplify it. They celebrate wins genuinely (no cringe-worthy “yay team” stuff).  They dissect losses without blame, and constantly ask: “What can I do to help?”

This isn’t some soft-skills fluff…it’s strategic leadership that directly impacts NOI. Engaged teams will innovate. Empowered revenue managers deliver stronger yields. Empowered sales directors close more business. Operations teams that feel trusted take ownership of problems instead of hiding them until they metastasize into mega disasters.

Micromanaged, anxious employees deliver the minimum to avoid getting yelled at. Great AMs know you can’t fake genuine hospitality, and you cannot terrorize people into excellence.

Top 6 Traits of Mediocre Asset Managers

For every great asset manager driving real NOI growth, there are many others who live for reports, set too many meetings, and somehow leave the property worse off than when they arrived. They are what Bill Murray would call “mediocre talent.” Mediocre AMs:

1. Over-Promise and Under-Deliver

This is the most dangerous trait: they create a fantasy for ownership that has zero basis in reality.

They specialize in building budgets designed to make owners swoon during the approval meeting. They end up promising things like 20% or 30% revenue growth in a year when the hotel is undergoing renovations or when the economy is softer than the hotel pillows!

When reality inevitably arrives, they blame everyone but themselves: the GM didn’t execute, the commercial team underperformed, rates were either too aggressive or not aggressive enough, the weather didn’t cooperate, Jupiter wasn’t aligned, Mercury was in retrograde, etc.

The result? Ownership loses faith in the entire team, team morale fizzles out, capital allocation gets frozen, and the property falls further behind because no one knows what numbers to trust anymore. It’s that “Highway To Hell” that ACDC talks about, filled with Excel spreadsheets of broken dreams.

2. Obsess Over Meetings

Some asset managers believe progress is measured in hours spent in meetings. Their calendars look like Tetris on expert mode: daily stand-ups, weekly syncs, bi-weekly deep dives, monthly reviews, quarterly planning sessions, and the dreaded “quick touch-base” that is never quick.

The problem: If your commercial/sales/ops team spends all day in meetings explaining what they’re doing, when are they actually doing it? Every hour spent building custom reports for yet another status update is an hour not spent optimizing rates or analyzing competitor positioning or making that group sale. As I have said in detail here, meetings don’t generate revenue. They cost a lot!

3. Miss the Forest for the Trees

They don’t see the big picture. They spend site visits checking for dust on baseboards or critiquing the breakfast buffet presentation. Meanwhile, food and energy costs have spiked 15% over last year!

They’ll spot a crooked picture frame from 50 feet away, but somehow miss that the PMS crashes twice daily and the night auditor has been running reports on a calculator since the last Winter Olympics.

Mediocre asset managers confuse activity with impact, visibility with value, and being present with being helpful. They return from site visits with a list of cosmetic fixes, while the property continues to hemorrhage cash due to core issues that need urgent attention.

4. Use Data as a Weapon Instead of a Tool

Mediocre asset managers wield data like a weapon, but not for good…they just need to be right at all costs.

Every variance report becomes an inquisition, and every monthly review feels like a deposition. This doesn’t inspire excellence; it inspires self-preservation or what the youth call “quiet quitting.” Hotel teams stop taking smart risks and start building defensive documentation trails. Energy shifts from “how do we win?” to “how do I prove this wasn’t my fault?” The best people leave first. The rest quietly disengage, doing the minimum to avoid being the next target. Data should illuminate the path forward, not persecute the people walking on it.

5. Dodge Decisions

Mediocre AMs are constitutionally incapable of making hard decisions. They can spot a problem from a mile away, analyze it across seventeen pivot tables, and discuss it in nine consecutive meetings — but actually do something about it? That’s where their courage evaporates.

Underperforming employees are put on a performance improvement plan for months. Everyone knows it’s theater at this point, but the hard decision keeps getting delayed. The management contract is bleeding money and destroying morale, but “let’s give it another quarter.” The director of sales hasn’t closed a meaningful piece of business in six months, but “everybody likes him, he deserves another chance.” You get the picture.

Meanwhile, these problems compound. Good employees watch bad ones get coddled and update their LinkedIn profiles accordingly. When the inevitable disaster finally strikes, these AMs blame the property team with breathtaking hypocrisy. The “Why didn’t you tell me it was this bad?” email arrives like clockwork, conveniently ignoring the ten messages flagging that exact issue. But nobody made the hard call.

6. Destroy Hotel Morale and Profitability

The average cost to replace a hotel GM or department head at a 4-star property is roughly 150% of their annual salary when you factor in recruiting, training, lost productivity, and local market knowledge walking out the door. If an asset manager is driving turnover every 6 to 12 months in key roles, they’re not managing the asset…they are incinerating ownership’s capital.

Fear-based cultures don’t innovate. As noted above, team members who don’t feel supported stop taking smart risks and eventually start leaving. The hotel industry is shockingly small and well connected. Word travels fast about AMs who burn people to make themselves look good. Bad asset management doesn’t just hurt current performance, but also limits future potential. Once a property becomes known as a revolving door run by a toxic asset manager, top talent won’t touch it. 

Conclusion

Working with great asset managers has been transformational for me, both personally and professionally. When the right asset manager takes over a hotel, there’s a palpable shift in energy and momentum. They don’t sell fairy tales or rely on wishful thinking. They build strategies rooted in reality and execute them through empowered teams they genuinely trust.

If you’re an owner, demand better! Your capital investment deserves an asset manager who treats NOI like a religion, not a suggestion. If you’re an asset manager, aspire to be the person hotel teams are excited to see. If you’re a team member or vendor, take note of which kind of AM you’re working with before taking on a new project. It’s one of the best predictors of the asset’s potential for success…and your potential job satisfaction.

The General Manager Drives a Hotel’s Commercial Success

Almost every hotel today has access to or can easily get access to sophisticated pricing algorithms, innovative marketing campaigns, and revenue management tools. The barrier to entry is lower than it has ever been, and there are smart people available for hire to help you utilize these tools. So why are we seeing so many hotels struggle to maintain sustainable commercial success?

The answer lies in hotel operations. Specifically, I want to single out General Managers. It’s time to acknowledge that the right GM plays a crucial role in making sure your hotel revenue goals are achieved. In fact, you can’t really  succeed today without a good one.

Operational excellence is now the holy grail of hotel commercial optimization. Finding and retaining a great hotel General Manager is more crucial today than every before. They are the bridge between commercial ambition and operational execution. Yes, they are the ones who can make all your dreams of commercial success come true. But only if you involve them in your decision-making and empower them to help with implementation.

GM = Hotel Profit Symphony Conductor

Commercial optimization encompasses the entire guest journey. Revenue generation is not an isolated function that some nerds will make happen for you using Microsoft Excel. It has to be backed by a great product, which is the guest experience. Every touchpoint influences both immediate revenue and long-term profitability. 

This article is for any hotel owners or asset managers who are struggling today and wondering why their commercial optimization efforts are not delivering the stellar growth they were seeing in years past. The first question to ask yourself is…who is leading your hotel team? 

Your GM is the conductor of your hotel profit orchestra. No matter how good the individual artists are, a conductor brings them all together into a perfect symphony. Short-term commercial success is a flash in the pan. For profits to be sustainable, there needs to be a balance among guest satisfaction, operational efficiency, and overall financial performance.

After decades in commercial optimization, I have learned this important lesson:

The right GM can make even a mediocre commercial strategy deliver stellar results.
The wrong GM can turn a brilliant commercial strategy into a revenue nightmare.

I am very fortunate to have worked with great GM’s who have made my commercial optimization work incredibly successful.

The Revenue Management Reality Check

I am old enough to remember when Revenue Management was something new and shiny, that only a few elites had access to. It is now more sophisticated and accessible than ever. Hotels today have amazing access to incredible tools capable of processing vast amounts of market data, competitor intelligence, historical performance metrics, etc. Oh, and let’s not forget that everyone’s software is powered by a magical AI unicorn, churning out rate recommendations and insights with rainbows, sparkles and sunshine! But, your magical RM system, with the best RM team behind it, is only going to be as effective as your hotel operations team’s ability to deliver on the value proposition you have sold to your guests. 

Let’s look at a typical scenario where the RM system/team has identified an opportunity to increase rates during a high-demand period. Here is how it typically unfolds:

  1. Revenue Management System calculates the optimal price point based on market conditions and competitive positioning.
  2. Recommendations are approved and implemented.
  3. Hotel expects solid revenue performance.

Unfortunately, the outcome is not based on revenue management magic, but on operational implications. Here are some specific issues that can quickly derail the price increase:

  • Housekeeping department is understaffed and cannot maintain room quality standards.
  • Front desk lacks the training to handle higher guest expectations.
  • Food and beverage operations cannot accommodate higher service levels.

Revenue opportunity + Operational Issues = Reputational Liability

This is the trap a lot of hotels fell into post pandemic. For a while, no matter what hotels did, traveler demand and appetites seemed to be unlimited. But those days are now behind us. Current and future demand forecasts are not looking so hot right now. There is no room for operational error in today’s marketplace. Let’s look at some examples.

Case Study: March 2025 Compression Event

The Revenue Strategy:
A 185-room urban hotel’s revenue management team identified increased demand during a citywide event in March 2025. The system recommended increasing rates from $189 to $279 per night—a 48% premium justified by competitive analysis and historical patterns. The revenue team executed the strategy, and occupancy remained strong at 94%.

The Problem:
The operations team wasn’t properly briefed about readiness requirements.

The Fallout:

  1. Housekeeping (already at capacity) couldn’t handle increased turnover.
  2. Room cleaning times jumped from 28 to 42 minutes, creating a cascade of late check-ins.
  3. By 3pm on compression day, over 40 guests waited in the lobby for unavailable rooms.
  4. The front desk, unprepared for the volume of upset, premium-paying guests, struggled to manage expectations, handle bags, etc.
  5. Within 48 hours, 14 scathing negative reviews appeared, many from repeat business travelers vowing never to return.
  6. The $84 RevPAR increase quickly eroded. There was a 15% decline in repeat bookings over the following quarter, plus 20% higher customer acquisition costs to replace lost guests.

As you can see, a hotel operations disconnect triggers a vicious cycle of declining satisfaction, reduced pricing power, and diminished revenue performance. Only hotels with empowered GMs can count on operational support for the elevated expectations that come with premium pricing. Owners and asset managers who fail to involve their GMs in pricing strategy create the conditions for the really painful meetings that destroy team morale and productivity.

The Marketing Mirage

Marketing’s role in driving hotel revenue has expanded dramatically with the proliferation of digital channels and sophisticated targeting capabilities. As with revenue management, the access to marketing tools and talent is pretty democratic today. Why are so many hotel marketing campaigns falling flat?

Failure is usually a result of guest experiences in the real world not matching the hype that was created online. Marketing effectiveness ultimately depends on the property’s ability to deliver on its promises. Every marketing message creates expectations in the minds of potential guests. When the operational reality fails to match these expectations, marketing becomes counterproductive.

A beautiful website showcasing luxurious amenities means nothing if those amenities are poorly maintained. Social media campaigns highlighting exceptional service fall flat when staff members are inadequately trained or overwhelmed due to staffing issues. Let’s look at another real-world example.

Case Study: The Craft Cocktail & Artisanal Breakfast Catastrophe

The Campaign:
A boutique hotel invested in a comprehensive digital marketing campaign emphasizing its craft cocktail lounge and artisanal breakfast experience, featuring stunning photography, influencer partnerships, and targeted advertising.

The Problem:
The GM was not consulted on the hotel’s operational capabilities in F&B.

The Breakdown:

  1. The “cocktail lounge” was a small bar that only had room for one bartender.
  2. The bar staff knew just five specialty drinks and became overwhelmed during peak hours, creating 20-minute waits for simple drink orders.
  3. The “artisanal breakfast” relied on one pastry chef, who called in sick twice in the campaign’s first week, forcing the kitchen to serve pre-packaged pastries that looked nothing like the photograhpy in the campaign.
  4. Guests who booked for these specific amenities left scathing reviews.
  5. One viral TikTok showing a croissant with the caption “expectation vs reality” garnered 340,000 views, triggering immediate booking cancellations.
  6. Online ratings dropped from 4.7 to 3.8 stars within two weeks, requiring six months of operational improvements and expensive reputation management to recover.

The most sophisticated marketing campaigns cannot overcome operational inconsistencies. Effective marketing can actually exacerbate operational problems by creating false expectations and attracting guests who might otherwise choose properties better aligned with what they are looking for. This situation creates an insidious problem where marketing success leads to operational failure, ultimately damaging reputation and long-term commercial prospects.

Good General Managers serve as the crucial link between marketing promises and operational delivery. They understand their operational capabilities and limitations, and must be consulted to ensure that marketing messages align with realistic service levels. Even better, they can elevate operational standards to support ambitious marketing positioning that drives better commercial results.

Operational Excellence Is Your Commercial Foundation

Operational excellence in hospitality extends far beyond basic service delivery. It encompasses the systematic optimization of processes, the consistent execution of standards, and the continuous improvement of guest experience touchpoints. When achieved, operational excellence becomes a powerful commercial differentiator enabling hotels to command premium pricing, generate positive word-of-mouth marketing, and build the kind of guest loyalty that drives long-term profitability.

The hotel GM orchestrates all the components of operational excellence, laying the foundation for your hotel’s commercial success. Here is a great example of a GM driving revenues for an airport hotel.

Success Story: Airport Hotel Transformation

The Strategy:
A full-service airport hotel’s GM implemented a comprehensive operational excellence program focusing on three areas: housekeeping quality, food service consistency, and front desk efficiency.

Actions Taken:

  • Housekeeping: Introduced a 30-point inspection checklist and improved supervisor ratio from 1:22 to 1:15, ensuring consistent room presentation
  • Food Service: Standardized recipes, implemented prep schedules, and cross-trained staff to handle volume fluctuations
  • Front Desk: Created a training program and implemented a “green light” system during peak check-ins, incentivizing upgrades and empowering staff to offer compensation when issues arose

The Investment:

  • Six months for implementation
  • $180,000 for training, additional labor, and process refinement

The Results:

  • Online review score increased from 3.9 to 4.5 stars, placing the hotel in the top 15% of its competitive set.
  • Improved reputation enabled a $22 ADR increase, generating an additional $1.4 million in annual revenue.
  • Direct booking conversion rates jumped from 2.8% to 4.1% as potential guests gained confidence from reviews.
  • Corporate negotiated rates improved 8% during renewals as satisfaction scores exceeded contractual thresholds.
  • Repeat guest percentage increased from 24% to 37%, reducing customer acquisition costs by approximately $120,000 annually.

The operational excellence investment paid for itself within six weeks!

Operational excellence directly enables commercial flexibility. Properties with strong operational foundations can quickly capitalize on revenue opportunities—whether adjusting service levels to support premium pricing, or rapidly scaling to accommodate increased demand. This flexibility proves particularly valuable in dynamic market conditions where rapid adaptation will provide a significant competitive advantage.

The GM’s Indispensable Role

Great GMs align diverse teams to meet common objectives, while maintaining focus on both short-term performance and long-term sustainability. I have seen the greats in action as they set clear performance expectations, create accountability systems, and foster a culture of commercial awareness throughout the hotel organization. They develop team members who understand the connection between daily responsibilities and commercial outcomes.

A great GM once shared that she wanted her key departments to understand and join the revenue mission. For example:

  • Housekeeping staff should understand how room presentation affects pricing power, and how their work drives guest satisfaction and revenue.
  • Front Desk should appreciate the revenue impact of upselling and fixing problems before they escalate. As the first point of contact, their enthusiasm sets the tone for the entire hotel experience.
  • Food service teams should recognize how much their performance influences guest satisfaction and repeat business.

Artificial intelligence, machine learning, and automation promise to revolutionize everything from pricing strategies to guest service delivery. However, even the most sophisticated technology implementations will require human expertise to achieve optimal results. General managers play a crucial role in this technology-human synthesis by ensuring technological tools enhance rather than replace human judgment. Good GMs already understand automated systems’ limitations and can intervene when circumstances require flexibility beyond programmed parameters.

Conclusion

The hotel industry stands at a crossroads. Technology has democratized access to sophisticated revenue management and marketing tools. Operational excellence has once again become the top competitive differentiator—and gives the general manager the power to achieve the ultimate competitive advantage.

The uncomfortable truth is this: You can hire the best revenue managers, deploy cutting-edge technology, and craft brilliant marketing campaigns. But without an empowered GM driving operational excellence, you’re building a commercial strategy on quicksand. Hotels today don’t fail because they lack access to technology or market data. They fail because operational execution can’t support their commercial ambition.  

The Five Stages of Rate Parity Acceptance

Rate parity is an evergreen topic. I wrote an article on rate parity for hotels in 2023, and all the way back in 2015.  It’s an issue that seems to stir up a lot of concern at the asset management and property levels. Even as I write this, there are hotel industry professionals Googling rates and taking screenshots in the Google Hotel ads section to bring to their next revenue management meeting. Seasoned revenue managers are mostly ignoring these emails loaded with screenshots, as we have already addressed rate parity to the highest degree possible. Plus it’s hard to explain to our bosses that their belief that “we control our rates and distribution” is not quite true.

We want to think that nobody online ever lies, cheats or misrepresents just to get a click. We want to have complete control over our own online presence. So I empathize with those of you who feel angry or frustrated. But the truth is that, at some point, all of us have to go through the five stages of dealing with hotel rate parity acceptance.

As a commercial services provider, I get emails from asset managers, owners and hotel teams who are all in different stages of their rate parity journeys.  I feel their pain, but they have to go through these steps in order to come out on the other side. Think of me as a spiritual sherpa trying to help you seek parity enlightenment.

Stage 1: Denial ⇒ “Rate Parity Is the Only Way Forward!”

This is where a lot of newbies find themselves. They cannot believe that the OTAs, and resellers that pull inventory from OTAs, are displaying a rate lower than the hotel’s. Some of them become obsessed with the concept that rates need to be in 100% parity; if not, then someone is definitely asleep at the wheel.

They start to spend time hunched over their laptop, frantically taking screenshots of Google Hotel Finder rates as if they are documenting a UFO sighting or locating the rate parity Bigfoot. They are living in an ideal world where loading identical rates across all channels should mean that nobody can possibly undercut them unless someone on their team has made a mistake.

Meanwhile, the hotel distribution world is busy evolving around them. OTAs have merged and multiplied; more channels are pulling inventory from your hotel than you think. You can choose to stay in denial and continue to harass your revenue teams… but they see you as a modern age Don Quixote tilting at windmills for rate parity honor.

Stage 2: Anger ⇒ “Those Evil OTA Empires Must Be Stopped!”I

Now comes the war phase. People at this stage have their Che Guevarra hats on and are no longer mild-mannered hospitality professionals. Instead, they are now “Direct Revenue Revolutionaries.”

This is also known as the It’s Always Sunny in Philadelphia Pepe Silvia phase. They have red strings connecting screenshots from Google on the wall like they’re hunting international criminals while unraveling OTA pricing conspiracy theories. I have said this before: it’s easy to be a revolutionary with other people’s money. This is why I like to work directly with owners whenever possible, as they have the proverbial skin in the game. 

People stuck in this stage are convinced that their 80-room independent property can somehow out-market global platforms that handle millions of bookings daily. It’s like David vs. Goliath, except David forgot to bring a sling and Goliath has billions in marketing budget and distribution technology. 

Some of us are angry enough to use the nuclear option. “Let’s pull out from Priceline or [insert any other OTA name here].” The reality is that someone like Priceline can easily pull in inventory from Booking.com like nothing ever happened. Meanwhile, you take an empty victory lap for your “brave” actions.

When you are getting ready to teach your distribution partners a lesson, remember that their actual job is to sell more of your hotel rooms.  If you still choose war, I have nothing but thoughts, prayers and a classic song by Edwin Starr for you to listen to on repeat.

Stage 3: Bargaining ⇒ “If I Try Harder, I Can Get It.”

After the anger stage, a certain desperation sets in. You tell yourself if you do everything right, monitor channels, match promos, and offer a gimmicky direct discount, perhaps you can finally achieve the parity unicorn. 

You begin frantically running your private promos, mobile discounts, and adding value propositions with the energy of a caffeinated squirrel. This is when you also discover that your current technology can’t actually support half the things you want to do. So you start shopping for new vendors, convinced that the perfect new booking engine will be your salvation. It’s like thinking that buying a better pan will automatically make you a master chef — technically helpful, but missing the main point entirely.

Unfortunately, effort is not enough to beat the odds. Maybe you can count cards in blackjack, but you cannot negotiate with a slot machine.

Stage 4: Depression ⇒ “The (OTA) World Is a Vampire.”

Next we officially enter what I like to think of as the goth stage of rate parity. Reality hits like a brick to the face. This is when you realize that independent hotels without OTA exposure are about as visible online as a black labrador in a coal mine.

The anger and bargaining stage decisions have led you to scale back on OTA participation. Now you are staring at your dreaded STR reports, where your competition is doing circles around your hotel like they are Formula 1 drivers. Meanwhile, you are stuck in a pit stop of your own making. The revenue decline isn’t sudden — it’s more like revenue diabetes at this point, with market share slowly draining.

There is a level of sadness in realizing the mathematical truth: there really is no free lunch. The rate parity pain you tried to avoid by abandoning OTAs has been replaced by the much sharper pain of empty rooms and tumbling revenues. I have to say this is the saddest stage. The right amount of coffee and courage can help propel you out of this stage and into the next one. 

If you know someone who is stuck here, they need a good hug. Just please ask before giving it to them.

Stage 5: Acceptance ⇒ “Make Hospitality, Not War.”

This is the stage where my closest and wisest hotel industry folks live. But to get here, you first have to experience the stages above. It is painful, but the enlightenment in the end is worth it. This is where you finally accept the following simple truths.

  • Your guests are not stupid. Stop panicking. Yes, they saw that Mr. & Mrs. Smith’s hotel was showing 40% off with $100 F&B credit, and then they saw “Super.com” showing $100 lower rates, and then they saw another random reseller on Google Hotel Finder undercutting your rates.… But they know that most of these rates are not real once they go a few clicks deep into making a booking. Most travelers know that nothing beats booking direct when it comes to looking for help, changing reservations, dealing with last minute upheavals, getting upgrades, requesting airport pickups, etc, etc. They would rather speak to your hotel team instead of a call center on any given Sunday.
  • Freedom of choice is real. Hotel guests aren’t mindless, price-driven sheep. They want value and they’re perfectly capable of choosing where to book based on their own preferences and needs. Yelling “book direct” at them does not really help. People who like to book direct will always do it. Expedia, Amex and Booking loyalists will do what they need to do to get that (points) bag. Keep calm and carry on.
  • Choose common sense over angst. There are some things your hotel revenue manager can do for you; other things are completely outside of their control. OTAs and their AI can create ghost room categories, undercut commissions, and update ads at a lightening pace. That is what they are designed to do. You and your revenue manager can use common sense to match promos wherever possible. Don’t worry about the impossible. The conversation needs to refocus onto how to give your guests the good ol’ razzle dazzle when they do book direct with you and keep them coming back!
  • It’s the hospitality business, not a distribution war game. Somewhere along the way, hospitality has taken a back seat. Time to change that! Revenue strategy isn’t a zero-sum death match with your distribution partners. It’s more like a complicated dance where everyone needs to know their steps. Your revenue manager is conducting an orchestra. Yes, some individual member of the team will miss a note sometimes, but the show must go on. A good revenue team will keep you moving forward despite any missteps.

I really hope you get to this stage soon and I will C U When U Get There (RIP Coolio).

Conclusion

The hotel rate parity acceptance process is a natural progression. The sooner we reach the acceptance stage, the sooner we can stop playing games and start making money. The goal is to return focus to the hospitality side of things so that people will want to come stay at our properties.

“Life is pain. Anyone who says differently is selling something.” (Dread Pirate Roberts, The Princess Diaries). In our case, they’re probably selling a website, booking engine, or revenue management software that promises to solve all your distribution and revenue problems while you sleep. It is important to have the right technology, but that will never replace the value of having talented (and accepting) hotel management and revenue teams that support each other in reaching the common goal of providing excellent hospitality at optimal rates. 

Now, if you’ll excuse me, I need to go see whether Booking.com, Priceline and Expedia are running any new promos undercutting the hotels I am currently working with…and then go for a long walk.

Hotel Website Design & Usability Non-Negotiables 

Your hotel website is a crucial pillar of your revenue and profitability. Whether you stay independent or have a hotel brand powering your distribution, a dedicated website is always the best investment you can make in securing a revenue future for your asset.

As I’ve written about websites many times in the past, I think it’s time for a refresh. This post was inspired by the fictional Chef Carmy Berzatto on The Bear and the list of “non-negotiables” he made for his new restaurant. Below is my list of non-negotiables for hotel website design and usability.

Every Second Counts

This one is right out of the high-stress kitchen series…and 100% relevant to your hotel website. Taking more than 3-4 seconds to ‘serve’ your website is simply not an option anymore. Slow load times are impacting your guests’ website experience and your revenue.

This rule 100% also applies to your booking engine. If you want bookings, make load speed your number one priority.  That means choosing technology that’s lean and fast, and avoiding booking engine software that’s bloated with extra coding.

You Must Be Searchable

Search engines cannot be an afterthought. The very first step a traveler takes when they decide to travel is to start looking for accommodations using an array of location and interest-based keyword searches. In contrast, when planning a new website, owners often spend endless hours on photos and colors and forget about searchability. Adopting a search first mindset will ensure that you are set for success from day one.

Search considerations should drive the development of your navigation, sitemap, content and landing pages. UX (User Experience) elements that focus on demonstrating E-A-T (Expertise, Authoritativeness, Trustworthiness) are key to making sure your website eats your competition’s lunch.  (Or just “eats” if you’re living with a teenager.) Creating a high-quality, user-friendly, easy-to-navigate website is more important than the video drone shot that is now available on 99.99% of hotel websites worldwide. 

Convert Traffic Into Revenue & Leads

The main goal of your website is to share information about your hotel to help drive revenue. However, if revenue is the only conversion you are tracking, then you are in for a heartbreak. In addition to revenue tracking at the bottom of the funnel, you need to be tracking lead capture: RFPs submitted, newsletter signups, etc. Website UX, content, landing pages, and calls to action should all be focused on starting a conversation, collecting leads, and ultimately driving revenue.

An integrated CRM is crucial for keeping track of leads. Don’t spend all your time tracking bottom of the funnel campaigns and sending repetitive “book now and save” emails to your guests (like this). You can’t overestimate the value of generating brand exposure and harvesting top of the funnel (not ready to book yet) traffic and interest in your hotel. Think ahead. Cultivate the guests you want to see in your hotel in the future. If you are a truly independent hotel, then this is the only real way to stay relevant.

Measure Successes & Failures

You must track your website performance using Google Analytics (GA4). Of course, you could use an expensive analytics program instead if you wish…as long as you measure everything you can – not just ROI. The Google ecosystem delivers good value for free IF you set it up correctly. Setting up and then making sure that the right GTM (Google Tag Manager) containers are firing is a sure shot way to keep track of both progress and decline. In addition to connecting with the booking engine to track activity and revenue, you also need to identify and configure secondary targets to measure the performance of your landing pages, videos and website forms. 

Democratize all information sharing by using Looker Studio reports. Stop wasting time mailing reports to people who will almost never open email attachments and read them. Even better, waste less time in meetings. You know how I feel about meetings, right? 

Refresh Content & Photos

I have been a WordPress fan forever. Digital asset ownership and independence aside, hotels should be able to change their content and photos anytime they want, and preferably without the need for any expertise.  An easy CMS (Content Management System) is key for success in keeping your content and images fresh. Your website is not a shrine to your branding greatness that you refresh every 4-5 years. The content needs to update often to stay relevant over the seasons. 

Note: Relevancy is not adding a website Pop-Up announcing the latest seasonal discount deal. Don’t just do that. Instead, add content and information that humans need (and search engines and AI models are looking for) in order to help plan travel to your hotel location.

Mobile First 

Need a strong “Heard!” response to this one. Responsive design is more relevant than ever, but the experience cannot just drop off once a guest leaves the website. We are entering the peak of “if I can’t book on the phone, I’m not coming” generation. Looking beyond browsers is key. It all about individual devices and your mobile phone “bookability” factor. I recently transitioned eight hotels away from a “perfectly good desktop but sloppy on mobile” booking engine just last year! You should do it too, as soon as you can! In my specific case, the conversion and revenue improvements in the first three months post upgrade were 100% worth the pain. A successful transition to a mobile-friendly booking engine and CRS (central reservations system) will pay dividends quickly, and for a long time afterwards.

Keep It Legal, Please!

Laws can be a bother sometimes, but there is almost always a thought behind them. Always strive to keep things legal on your hotel website. Accessibility and Tracking are the two areas where you should never let your hotel website trip you into legal trouble. All websites should comply with WCAG Level AA accessibility standards. They help make sure you are being kind and welcoming to all types of hotel guests on your website. It’s the right thing to do, and also happens to be the legal thing to do. 

You should also refrain from annoying potential guests whenever possible Most people hate getting tracked after visiting your website. It’s not you: it’s the advertisers chasing them with ads across the internet. Make sure your website has a cookie consent widget that is properly connected to your Content Management System and Google Tag Manager account. It is your legal responsibility to show privacy policy notices, so this is, legally speaking, as ‘non-negotiable’ as it gets. 

Conclusion

Your website is your hotel’s digital storefront, the place where you share information, showcase your product, and sell rooms. Something that is working for you 24/7/365 deserves continual updating and improvement. If you are not hitting all the points above, it’s always a good time to get to work! Websites don’t have to be perfect, but they always have to be welcoming, easy to find, and easy to use. Make decisions and implement changes quickly and efficiently, as often as you can. Remember:  Every Second Counts.

Why Are Hotel Property Management Companies Struggling?

Hotel Property Management Groups (PMGs) have been a pillar of the hospitality business for decades. They bring expertise, operational efficiencies, and the greatest gift of all — taking on the day-to-day operational challenges of running a hotel.

However, if you have been reading the headlines, you can sense that trouble is brewing in the PMG world. Some of the largest hotel management firms are struggling to stay afloat and cannot seem to hold on to the assets in their portfolio. There are internal and external conflicts, and even lawsuits being filed over things like intellectual property. These issues highlight how fragile the hotel-PMG relationship has become.

Disappointed owners and investment groups are firing and replacing PMGs at a pace we have never seen before. What’s going on here? Let’s start by looking where trouble usually starts: poor decisions coming from the top. The consequences of decisions made by PMG execs trickle all the way down to the frontline staff of a hotel and end up reflecting in the guest experience. 

Specifically, PMGs are failing to meet expectations on two fronts:

Guests: Service and Experience
Owners: Revenue and Profits

A perfect storm has been brewing for a while, making it harder for PMGs to be effective and profitable. The key components of this storm are:

  • The Modern Traveler
  • Economic Pressures
  • Commercial Optimization Challenges


The Modern Traveler

Post pandemic, we saw a big shift in how people travel and how they use their discretionary income. The loyalty point chasers are still out there, but most people are looking for a seamless digital experience, a local connection and a memorable stay. Hotels that integrate local/neighborhood activities and culture into their marketing and operations are doing very well. The traditional PMG model of standardizing services and rolling them out across a diverse hotel portfolio is not working as well. This disconnect is hitting PMGs the hardest. The practice of “boutique washing” a hotel is not connecting with guests. Industry legend Bashar Wali’s article about “Faux Tique” hotels is a must-read.  

Today’s guests want:

  1. Personalization: They want to be recognized as individuals. Personalization requires sophisticated guest data management and tailored service delivery, which (to further complicate things) varies by location and guest type. This kind of approach is very resource-intensive and hard to implement on a large scale, especially if you are managing hotels in different locations.
  2. Digital Experiences: Guests expect seamless integration of technology, from the beginning of their booking process to the end of their hotel stay. They want to use smart devices and phones to book online, manage their reservations, check-in/out, manage their smart room controls, etc. They feel the need…the need for speed. However, unlike Tom Cruise in Top Gun, their need for speed is all about their WiFi connection.
  3. Unique Experiences: The rise of lifestyle/boutique hotels and alternative accommodations has shifted consumer preferences toward unique, localized experiences. PMGs will have to innovate and diversify their offerings to compete, making their standardized service models obsolete.

Economic Pressures

Economic factors also threaten the profitability of PMGs and their managed hotel assets. Here are the top three external elements affecting PMGs.

  1. Global Economic Fluctuations: The hospitality industry is highly sensitive to economic cycles, and there have been some big ones: the global pandemic shutdown, global reopening, revenge travel, election year, armed conflicts, and now the current softness. This has all happened in just five years! PMGs are facing these challenges across a collection of hotels in multiple geo locations, and sometime even in international markets.
  2. Rising Operational Costs: The costs of labor, utilities, and supplies are rapidly increasing. In addition, the need to invest in new technologies and upgrade facilities to meet modern standards is further adding to the financial burden.
  3. Increasing Competition: The proliferation of alternative accommodation options, such as vacation rentals, soft brands and home-sharing platforms, has intensified competition in the hospitality industry. Professionally self-managed hotels are providing value and experiences at a much lower cost and stealing market share from mass-managed assets. There was a time when a PMG offered cost advantages. Today, with all the new affordable technology, an independent hotel can run circles around a hotel management company in terms of cost by using tools that don’t have participation hurdles. Service levels may be lower, but a P&L with reduced cost is always a thing of beauty.

Commercial Optimization Challenges

This is the area where I have personally seen the biggest change in the past few years. Revenue Management and Digital Marketing have been democratized. They no longer belong to the elite and well-connected. Any independent hotel in the world can now gain access to information, tools and talent that replace what a PMG can offer. It’s amazing how quickly a hotel asset can take off once dedicated revenue management and digital marketing support are provided.

There are still some big challenges to consider. These are the top items that will damage your hotel’s commercial strategy when you scale but forget to innovate:

  1. The Silo Problem: The silos of Revenue, Sales, and Marketing not only exist, but are in fact getting taller in some hotel management companies. I started talking about breaking the hotel silos at industry events back in 2016. That was over seven years ago! It is a little depressing to see so many PMGs still running their commercial teams in silos. Big brands were never expected to change, but it’s surprising to see that some of the the younger PMGs are still not embracing integrated commercial operations.
  2. The RMS Problem: Brand hotels don’t have Revenue Management Software (RMS) options; they are trapped in long-term contracts with preferred vendors. However, an independent hotel sticking with outdated revenue systems is like a tourist going to Spain and exclusively dining at McDonald’s. There are some fantastic companies out there selling revenue and marketing software that was not designed in the early 90s. It’s worth taking the time to find out which system is the best match for your property and location.
  3. The Digital Problem: Same as above: you cannot optimize your digital experience using an outdated tech stack. If your booking engine has not upgraded its mobile booking experience in 8+ years, you should not be using it. Likewise, your online marketing budgets, spending strategy and goals need to be customized for your location and not limited to an MSA you have signed with an agency to save costs. The ROI-obsessed PMG models are tanking hotels located in super-competitive markets. Owners are cheating themselves out of market share because nobody has taken the time to evaluate their digital marketing needs. Add to this a one size fits all vendor to cut costs, and the result is nothing short of a disaster. It is so much easier to complain about the OTAs… who are actually striving to offer guests a seamless experience across screens and locations.
  4. The Meeting Problem: If you have not read this, then please do! Find out how meetings are ruining the hotel business. I’ve seen hotels managed by PMGs that are dying in the market but still having a daily revenue meeting…it happens more than you think!

In the end, Revenue, Sales, and Marketing all end up doing their thing using their old timey corporate tools. They have endless meetings with zero positive output. When the hotel does not meet its revenue targets, they have another meeting to assign blame. In the end, nothing really changes, and just like that another year starts again.

Owners and investors are starting to realize there are better options out there. Mediocrity can thrive as long as nobody notices. Once you see it, you have to do something about it.

One Metric to Rule Them All

Owners are waking up to a new P&L reality. Even when revenue is up, so is the cost of doing business. You can analyze STR reports all day and night, but at the end of the day, you don’t deposit ADRs and Rev Par’s into the bank. It is all about the Net Operating Income, and that metric is really under pressure these days… you know, the kind of pressure Queen and Bowie would write a song about.

Net Operating Income (NOI) shows the profitability of income-generating real estate investments like hotels:
NOI = Total Revenue – Necessary Operating Expenses

NOI is a before-income-tax figure on a property’s income and cash flow statement that excludes principal and interest payments on loans, capital expenditures, depreciation, and amortization. Hotels are a real estate business. Yes, hospitality involves a lot of passion and creativity; but at the end of the day, you have to generate NOI. This is where owners are catching a lot of PMGs asleep at the wheel. So if I had to pick one thing that is sinking the property management party boat, it has to be failure to generate a suitable NOI for the asset.

Conclusion

Hotel management companies are navigating a complex and rapidly evolving landscape. While the challenges are significant, they also present opportunities for innovation, differentiation, and growth. By embracing technology, creating personalized and unique experiences for guests, and customizing commercial strategy for individual hotels, PMGs can overcome these challenges and begin to thrive again. The future of hotel management will be defined by those companies that can effectively balance these demands. They must continuously evolve to meet the needs of the modern traveler, while providing the necessary income to keep assets profitable.

A Hotel Guide for Avoiding OTA Panic and Rate Parity Games

OTAs are a fact of life in our industry. But there are so many negative feelings about them, constantly being stoked by hotel media, that it becomes difficult for hotels to form calm, cohesive OTA and rate-setting strategies.

OTA-bashing articles surface every few months, no matter what cycle the travel business is in. These articles usually involve screenshots of OTA rates being lower than the hotel’s direct rates, leading to complete disgust and a ton of hate reading. Other times, these feelings of fear and loathing towards OTAs are triggered at conferences by speakers going for some cheap applause.

I would like to ask you to put all that aside, and keep an open mind. Please remember that, as a revenue professional, your goal in life is not to teach the OTAs a lesson. It is to make more revenue! You should try to avoid Maslow’s hammer approach when thinking about your relationship with your distribution partners:

If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.

Your revenue strategy cannot be focused on proving that the OTAs are an evil empire, and that only your rate parity games will topple them. The goal of pricing is to make sure that you convert all of your hotel investments into revenue.

Now, if you’re ready, please read on to learn about some OTA and pricing strategies that have delivered millions in revenue for owners and operators that have embraced it.

The Rate Parity Games

Rate parity surfaces a couple of times a year. Usually, it is:

  • Declared dead
  • Something that is killing your direct revenue

I am posting a third option for you to consider: Don’t play games.

People are posting articles filled with “screenshots of proof,” as if they have finally located the Chupacabra or Bigfoot. A lower rate published on an OTA versus a hotel website is highlighted as a “gotcha moment” and a complete failure of your parity-based pricing strategy. The “game over” vibes are pretty doom and gloom (even for me). They make me think of Bill Paxton.

Rate parity should not be misrepresented as loading the same rates on all channels… and then immediately going to bed, zero follow up. Dynamic pricing requires a little bit more work than that. Once your rates are loaded, you have to keep an eye on the OTA channels, like Booking and Expedia, and monitor what they are doing with the rate you gave them.

Here are reasons/examples of how and why they might be showing lower rates:

  • Are they running opaque promos?
  • Are they running mobile promos?
  • Are they running merchant model promos?

If the answer is yes, then please match these offers on your website. Instead of canceling your entire participation with them, do your best to implement competitive rates on your direct channels.

In other words, once the rates are uploaded to the OTA, don’t assume your revenue manager is then handcuffed and cannot make any edits! When you notice parity issues, do something about it right away. Some examples:

  • Run your own private promos.
  • Run your own mobile promos.
  • Offer direct value that OTAs cannot match.

If your current booking engine technology vendor does not permit you to take these actions, then find one who does. The answer is not abandoning parity; it is having the smarts to monitor and enforce it on all channels when possible.

Ah, The Good Ol’ Billboard Effect

A big argument against rate parity in pricing is the idea that there is no billboard effect for an independent hotel that is listed on a global OTA. This study was first published back in 2009 by Cornell University, with another follow up written in 2017.

I am not here to debate the billboard effect. If you feel strongly that this does not have any relevance, then please withdraw from the OTA channels and watch your competition overtake you.

It is very easy for direct revenue fanatics to throw the billboard effect under the bus. Do you know why? Most of them are not personally invested in the asset. And if there is one thing that I have learned from working in revenue optimization for 20+ years, it is this:

It is very easy to be a revolutionary with other people’s money.

I will elaborate more on these revolutionaries below. For now, let’s look at some traffic and revenue stats for the top OTAs in the business:

[table id=10 /]

If you want to opt out of this exposure and revenue stream because a consultant, marketing agency or software provider thinks you can 100% make up for it using their direct revenue software? Then all I can say is… good for you! Abandon all parity and put your lowest rate on your website. Then give it some time and watch your competitors do circles around you. The effect of this strategy is not sudden death but more like diabetes… a slow decline, which means that by the time you discover it, it’s too late.

There Is No Free Lunch!

It’s not just a saying! An actual mathematical theorem highlights a fact that we have all known for a while: There are no shortcuts to success.

Dealing with OTAs may seem painful when you just think of the commissions. However, do we expect them to give us traffic and revenue for free? Commission, while painful, is the cost of doing business. The Princess Bride probably said it best:

OTAs don’t owe you anything. You can try to undercut them and limit your participation to prove a point. But in the end, that decision is going to cost you revenue and loss of market share as an independent hotel. No amount of creative marketing or software can protect you from this outcome.

Guest Ownership Quandary

We can debate all we want, but hotels don’t “own” the guest. Neither do the OTAs or any other form of travel agent. Your hotel guest today is a little smarter than we like to give them credit for.

Since the pandemic, most hotels have seen their direct revenue share grow. In spite of the “death of rate parity,” the overall market share of every hotel that maintains true rate parity has gone up. How is this happening if the guests are mindless, price-driven sheep? This is happening for a simple reason: they are looking for value and not just a few dollars off the rate.

If you want guests to book direct, you have to showcase value in addition to a good rate. Flexible cancellation policies over the past two years drove a huge volume of bookings for direct channels. Hotels answering their phones and actually helping guests also enabled higher rates, plus more direct bookings and increased market share. Have you ever tried to locate someone at an OTA to quickly resolve your booking issues? There is no substitute for direct contact with someone who you are going to be staying with.

Give your guests a little more credit. Instead of “owning” them, offer them value that only you can give them. And please accept that people who are hooked on OTAs will always book there, no matter what. It could be loyalty, points, or just habit. Don’t wage a war to try to convert these guests on your website. It’s the same as trying to get a Marriott loyalist to stay at your independent hotel. Even if you have a superior product, he will pick the breakfast buffet with watered down scrambled eggs every time to maintain his status with the brand.

Playing Revolutionary With Other People’s Money

Direct revenue is a crucial component of your distribution strategy. You have to work to build and grow it whenever possible. Vendors often present direct revenue as a magical, pain-free solution to all your revenue problems. However, there is a limit to your reach and your budget when it comes to marketing your hotel to a global audience. This is particularly relevant to independent hotels that do not have a brand contributing to their revenue base.

I read something ridiculous last year along the lines of “You should withdraw your hotel from all merchant models and promotions.” Someone selling software and services was calling for hotels to withdraw from all the OTAs and then double down on offering mobile discounts on their direct channels.

I have noticed that most of the direct revenue revolutionaries are playing with other people’s money. If they were paying the mortgage, payroll, insurance and fees on a hotel asset from their own bank account, I guarantee you they would be participating in everything 24-7.

You see, I too fancy myself as a hotel revolutionary. However, I am not going to sabotage the asset owners’ finances to prove a point. That is highly unethical and risky behavior with negative consequences.

Your revenue strategy is not a zero-sum game that you play with your distribution partners. Celebrating lack of visibility on OTAs and assuming everything will magically come in “direct” is deeply flawed logic. An independent hotel today cannot afford this level of carelessness when it comes to their distribution strategy.

Conclusion

I wanted to share my thoughts on how your hotel can stop hating and start focusing on improving your revenue and distribution mix. My strategies have delivered millions in top line revenue for assets I have worked with over the years. So please view this article as more than a think piece. This is real cold hard cash we are talking about! And it might even feel good to let go of some of those negative feelings and start viewing the OTAs as partners. Focus on negotiating the best contracts with them, and make them work to your advantage. And take responsibility for maintaining parity by offering rates or added value that make your direct offers more appealing to guests.

Meetings: The Black Hole of Hotel Revenue and Productivity

Meetings are the black hole of productivity. I’m not saying this just to be dramatic. There is plenty of evidence coming your way. Keep reading!

I have been attending corporate meetings since my early days in the industry, so we’re talking about two decades now. However, things have recently gotten worse. During the pandemic, the number of meetings we all had to attend sharply increased. A Microsoft Study highlighted a 250% increase in meetings compared with what employees had to deal with before the pandemic.

Those who know me know exactly how I feel about meetings. When I get stuck on a long call, I catch myself internally chanting “This Meeting Could Have Been an Email” over and over like a monk. Meetings waste valuable time that I could be using to do actual work, like reviewing analytics, rates, content and strategy. You know, the stuff I enjoy and am getting paid to do.

Meetings are endemic to corporate environments. However, a cure is possible. It involves having leadership say no to unnecessary meetings. I think the “Anti-Meeting” movement can gain ground if more owners and senior leaders understand the huge negative impact that meetings can have on their bottom line.

There is also the fact that meetings are making you stupid, which should not come as a surprise to anyone who has been in the corporate workforce. But for now, let’s focus on the dollars.

A Very Expensive Hobby

What if I told you that meetings are really, really expensive? I wish it was mandatory for all meeting hours to be accounted for in the company P&L as a “cost of business” line item. I think if these numbers were released, there would be a quick change in how we manage our collective time.

How can you calculate the real cost of a meeting? Well, there is this simple formula:

Total Cost of Meeting  =  # of People Attending  x  Their Hourly Rate  x  Meeting Duration*

*Trigger warning: The numbers you will arrive at are staggering.

Let’s run a scenario for a small group of company managers. If five people in your organization with annual salaries of $100,000 per person spend 15 hours per week in meetings (three hours a day)… those meetings are costing you $3,846 per week. Keep up this pace, and these meetings end up costing your organization $200,000 per year! Here is a 2 min 35s montage of Owen Wilson saying “wow” to help you cope with this shocking reality.

What about larger/branded hotels? Larger organizations take this bad habit to a whole new level. Just peek into any big brand’s “FDD” (Franchise Disclosure Agreement). Every major hotel brand uses it to define services they will offer to their franchisees. You can access these hotel FDDs on the internets. Guess what item is included as a “service” that hotels must pay the brand for for? Answer: “Revenue Meetings.”

Your average revenue department managing several branded hotels likely spends a whopping 56+ “person-hours” per week on meetings alone! That’s approximately 2,912 hours per year of hours that ultimately get billed to hotel franchise owners as part of their fees. Even at a base rate of $50/hour, hotels are seeing $145,600 worth of time wasted on meetings. This time should have been spent on making your hotel more money.

Senior management is very likely spending up to 80% of their time on meetings. This is corporate sanctioned madness.

The reality is that meetings are a cost item which is entirely ours in the making. Meeting lovers are causing significant financial damage to your organization.

A (Long) Wrinkle in Time

Meetings do not only kill productivity. They also add another blow to everyone’s mental focus and health. If you have successfully stopped everyone from doing their day-to-day work, then you’d better wrap up quickly!

How long should a meeting be? My magic number: 30 Minutes Max. Going over 30 minutes indicates that either one or more of the following has happened:

  • Meeting agenda was not planned.
  • Pre-meeting prep was skipped.
  • Longer meeting time is being mistaken for “collaboration.”
  • Longer meeting time is being mistaken for “brainstorming.”
  • Someone really likes the sound of their voice and won’t stop talking.

Rarely, a slightly longer meeting is needed. However, the default one-hour meeting invite, that some folks just love to send out for every meeting, is not helping. First step toward change: email back requesting a shorter meeting. Offer to review items in advance… unless they were going to reveal the location of the Holy Grail to you… which we all know has to be done face to face with no advance notice or reading materials to prep.

Second step: encourage colleagues to change their default meeting invite setting to 30 minutes. It only takes a few seconds to save hundreds of future meeting hours.

A New Approach to Brainstorming

Just like meditation, clear thinking requires alone time. New ideas come from within and they can happen anywhere. Ideas cannot be scheduled and magically appear in a meeting room setting under florescent lights (or in front of a fake Zoom background).

Next time the senior managers get the “brainstorming” itch, try this instead:

  1. Share the topic/problem with the team via email in advance.
  2. Ask everyone on the team to email back their individual/independent ideas.
  3. Post all ideas in one place.
  4. Have attendees vote on the best ones.
  5.  Schedule the meeting.

Ok, you now have 30 mins to discuss and finalize best ideas. Good luck, we are all counting on you!

Stop Trying to Be “Synchronous” in a Remote Work Economy

Remote work is here to stay. Expecting everyone on your team to stop doing everything else to be “present together” at a designated time will keep getting harder. Meetings throw a massive wrench in the way we work asynchronously in real life. Teams work on different schedules across various time zones, reviewing files, data and statistics, and performing daily tasks that need to be done. Bringing everyone’s productivity to a grinding halt is a colossal waste of time and money. If you are calling an all hands on deck meeting, you’d better have something really important to share. Something that has to be shared synchronously…you know…like the exact location of the Holy Grail.

Don’t Confuse Meetings With Work

The theme from Severance starts playing in my head when I think of the massive number of hours I have spent in meetings (that could have been an email).  Meetings are corporate approved black holes of productivity that hide in plain sight, because they get absorbed as “work” hours.

True collaboration and brainstorming will never be confined to meetings. Employees or contractors whose calendars are filled with meetings are not really working for you; they are working for their calendar and running on a hamster wheel to nowhere. Real work happens when you stop talking and focus on the task at hand. Emails, Slack, G-chat, texts, and short 1:1 calls can resolve most of the issues in your day-to-day work life. We can collaborate without interrupting everyone’s workday to herd them into a meeting room.

Steven Rogelberg (Professor of Organizational Science, Management and Psychology at UNC Charlotte) conducted research on meetings and their impact on work. Here is a snapshot of the results:

“We surveyed 182 senior managers in a range of industries:

  • 65% said meetings keep them from completing their own work.
  • 71% said meetings are unproductive and inefficient.
  • 64% said meetings come at the expense of deep thinking.
  • 62% said meetings miss opportunities to bring the team closer together.”

These are striking numbers, yet they should not come a surprise to anyone working in our industry. We are simply meeting ourselves to death.

A Few Good Meetings

If you can handle the truth…then yes, it is actually possible to have good meetings. This is my secret formula for how to make good meetings happen at your organization:

  • Limit meeting time to 30 mins, no exceptions.
  • No sitting whenever possible.
  • No news, weather or sports-related talk.
  • No tea, coffee (not even for the closers), or food. Only water.
  • No open laptops. Notebooks only.
  • Phones face down, on silent.
  • Email in advance: agenda, reports, videos, slides, etc.
  • Observe meeting free days of the week (eg, Monday, Wednesday, Friday).
  • Slide reading is always strictly prohibited. Summaries and discussions only.
  • Have attendees anonymously rate every meeting on a scale of 1-10, and share results with the team.

Conclusion

I am not saying all meetings must die. However, most meetings can and should be avoided or shortened. Be the leader in your company who starts declining useless meetings. I’m not saying you can decline all invites from your boss; this trend must start from the top. (I’m talking to you, leaders and managers.)

Instead of reading cliche management books, advance your management career by boosting your team’s productivity and your company’s revenue. Useless meetings are crushing your team’s morale, making them dumber and less productive. Give the people what they want, and get better results from them in return. You can be a hero!

Despite your best efforts, if you still find yourself in a terrible meeting, do not lose heart. Find a meditative chant that works for you, or borrow mine: “This meeting could have been an email.”

Hotels Must Embrace Remote Work

Remote Work

After my last pandemic-focused article, my inbox was flooded with queries about remote work. I had urged hotels to embrace remote work and stop putting geographical restrictions on hiring the best talent. Most of the emails I received questioned the long-term feasibility of remote work, especially for a hotel organization.

I want to address some of these concerns and share some further thoughts on how work/office culture is already changing. Obviously, some jobs can never be performed remotely (front desk, housekeeping, etc). However, remote work is already having a direct impact on the hotel and travel industry, and this trend will continue. I recommend trying to embrace it. Not because it is trendy, but because it will increase your bottom line.

Dislike remote work? Ok, Boomer.

Much of the feedback I received about the idea of remote work was negative. Some people don’t see how it could possibly work. What if I told you that the majority of them are old? (Disclaimer: I am old too!) Sadly, the most apt response to a lot of these emails is captured by these two words: “Ok, Boomer.”

Memes and jokes aside, even some of the young(er) (40s-50s) hotel company CEOs are passionate about having their employees return to office-based work. Why the reluctance to embrace remote work? The answer lies in our past. If you do the math, you know that many of us did not grow up during the internet age. Bare bones commercial broadband really hit the market in 1998-99. That means that even geriatric millennials did not have access to internet in the early part of their lives.

Being older doesn’t mean you have to be stuck in the past. As a senior person in the industry and as a parent, I never pass up an opportunity to check in with the youth on the latest trends. This is important, as they are the future, etc.  I always try and avoid the “how do you do, fellow kids” situations. Please take the time to talk to someone whose first ultrasound was posted on Facebook. Ask them how integral internet has been to their life, and how quickly the way they use it continues to evolve. Then imagine them commuting for hours to go to a specific room to do something that they can do from their home. Imagine relocating them to an expensive city so they can be in that room from 9 to 5, leaving behind everything they love and the lifestyle their preferred location offers. I know: we all used to do that. (Cue the stories about walking 10 miles to school in the snow.) But times have changed.

Being a laggard is not tied to age, but to a mindset. The youth are speaking. Are you listening? People in departments like marketing, analytics, revenue management, content, and digital have no business being tied to a cubicle. Your middle-aged VP/CEO might not agree, but the writing is on the wall.

Where did all the good people go?

Fellow Hawaii resident Jack Johnson asked this question back in 2005. Employees are on the move, and good ones are getting harder to find. There has been a shift in the way people approach their careers. I’m sure you have heard of the “Great Resignation” looming over the workforce. Here are some sobering reads on where the job market is headed.

  1. Employees are leaving the workforce or switching jobs in droves. For many, employers’ behavior during the pandemic has played a big part in why they’re walking away.
  2. The US Bureau of Labor Statistics saw four million people quit their jobs in September, which is the highest spike on record.
  3. An HR Company called Porsinio (UK and Ireland) conducted a study in which 38% of people surveyed planned to quit their jobs within 6 to 12 months.
  4. In a Microsoft survey of more than 30,000 global workers, 41% were considering quitting or changing professions. 

The hotel and travel business is not exempt from this trend. Being forced to work from home at the beginning of the pandemic exposed a new life/work model to many people who had been practically living at work. The realization that you are working on a laptop and doing exactly same thing you did from the office is life-changing, as we can see from the millions of people looking to change their work environment.

We know how much time, effort, and carbon emissions go into commuting! And how much more you have to pay for an expensive place that’s near the fancy office building! Free office lunch is great, but no perk can match the comfort of cold hard cash being saved on housing, gas, dry cleaning, etc.

By the way, this re-examination of how and where you want to spend your time was not limited to the job. The pandemic saw an increase in separations among married and live-in couples. People started questioning who they were living with, once they started spending more time together.

The Jerk 

Let’s talk about the office jerks. The pandemic took away much of their power to harass fellow co-workers. When working from home, the jerk doesn’t sit behind you anymore. He has to log off when the mandatory Zoom call is done. This is a true galaxy brain moment: What if I did not have to work with jerks anymore? Not even on Zoom/Slack!

RIP “The Office”

People still want to work, but they do not want to join a cult.

I was amused by the texts and emails I got in response to my personal anecdote about manufactured company culture (last month’s article). It’s always great to connect with colleagues from time spent in the church of the office.

The old formula of: “Big Team + Big Office Space = How Successful You Are” no longer works.

Both companies and employees can see that people working on laptops at home are still producing the same results – or sometimes better results – in terms of overall productivity and mental health. Cutting down the commute and “office culture” time has boosted workers’ productivity. This phenomenon was outlined in several studies way before 2020. But it took a pandemic to force companies to really test out the WFH (work from home) system.

Result: A global WFH shift has shown that, even over an extended period of time, you don’t need an office for the majority of your departments. There is a reason why almost 20% of all NYC office space is empty. 

Offices have long been the extension of CEOs’ egos, with their higher floors, corporate logo on the building, lavish spreads, fancy digs. I get it, people like bling. But here is a not so novel idea: Why not use that wealth to create a happier workforce? Instead of paying rent, give employees bonuses instead. There will still be enough money for several team gatherings throughout the year.

Rethinking Middle Management

As soon as “the office is essential” façade was lifted from the corporate world, a crucial issue was exposed in the hotel corporate structure: middle management, aka The Workforce Police.

Some CEOs have the mindset that they essentially “own” the their workers during certain hours of the week, and need to corral them into an office during those hours. This desire has added a whole layer of middle managers to watch over them and whip them into shape. This is not how the youth want to live their lives. Why are we surprised that they don’t want to work in an outdated system?

Remote work eliminates much of the need to have middle management on your payroll. Most hotel management companies have a team of people employed just to make sure other people are physically present and doing their jobs. Middle management becomes redundant with remote work, as you start attracting and hiring people who are already doing the work on their own. What a concept.

Hotel and travel companies have always struggled to find people who actually do the work instead of managing the work. That’s why we have a parade of Vice Presidents and middle managers towering over lower waged, younger employees who actually can do the work they have been hired to do.

Leaders and middle managers fighting against remote work are afraid that their job is being rendered obsolete by remote work (which it is). But I don’t know how you justify paying for offices and managers when those funds can be given to your best performing employees, the ones who do the work that drives more profit.

Remote Work Culture Wars

For any good idea, there is always pushback from the establishment. It is not just hotel brands, but also global powerhouses like Apple and Chase, who are throwing shade on remote. Ironically, one of them makes phones and laptops that enable you to work well from anywhere in the world! To quote Alanis Morrissette “Isn’t it ironic? Don’t you think?”

It’s important that you read and memorize this: Remote does not mean that we never meet anyone in person ever again. It is not a prison sentence! People will still travel and meet up with their co-workers. It is not all or nothing. Teams will need to get together every now and then.

I see a lot of leaders posting about the “power of in person” on LinkedIn. It only takes about five minutes on their company’s Glassdoor page to learn about the bullying, back-biting, favoritism, or borderline illegal “happy hour” experiences that are taking place in their organizations.

Not all office culture is toxic. But idolizing in person as a singular/magical way to connect is overplayed. Remote work saves organizations tons of time! It is time that workers can use to… do actual work! Another plus is that people don’t have to focus so much on appearances. (I mean, do you even care about your company if you are not wearing Salvatore Ferragamo shoes to the next meeting?) Women are affected by this issue the most, and I’m guessing many of them would rather put more focus on their work and less on how they look.

When it comes to taking sides on the remote culture wars: Don’t pick the shiny embossed office mug, as it is not the holy grail. I recommend doing humble work while drinking from your well-worn cup at home to prevent your face from melting off.

More Flexibility, More Profits

Finally, let’s discuss the feature of remote culture that I think we can all get behind: the financial windfall!

Working in revenue optimization, I am not shy about admitting that I am all about the profits. It’s the reason people hire me! So, let’s talk about how remote work can help you cut costs and boost revenue in three easy steps.

  1. Save Office Rent: How much can you save by reducing or eliminating rent costs? If you’re not ready to completely let go, keep enough conference rooms to host teams when they need to meet in person. Twice yearly, you can book extra workspace and hotel rooms for larger groups. **Since you are in hotels, plan it during the slow season and get the best rates (tip of the hat to revenue managers).
  2. Hire Globally: I am not saying that you need to have your entire team based in another country, but how about people from another state? A state with lower taxes, for example? Or a lower cost of living? The possibilities are endless, so please Google “cost of living calculators by state and country” for a shock.
  3. Trim the Fat: People working remotely need less management. Eliminate management positions and spend the money on better talent.

Your profits were always there, my dear Watson. You were just spending them in the wrong places.

Conclusion

The office has long been the gym membership of the corporate world. It’s a place where your team is expected to show up, interact with each other, and keep up the appearance of working, even when they are not working. Commute, look busy, repeat. Look at any historical e-commerce stats: the majority of online research and shopping is happening Monday to Friday, 9am to 5pm. Yes, during office hours! This was a fact way before the whole work from home thing hit the scene.

The pandemic revealed that office-based work can often be an excuse to spend time away from home and family. For many of us, 100% of our work can be done from literally anywhere in the world. And a lot of us would like to do it from the comfort of our own home, or even on the road. Anywhere we are happy and have WiFi, we can thrive.

As for the younger generation, they are deciding that the human cost of constructing your life around a physical office is too high. People who are good at what they do – the ones who don’t need excessive amounts of meetings or supervision – are flocking to flexibility. The A Team is working from home and running circles around people still trapped in the office. As we enter this new era of work, during a pandemic that refuses to go away, just remember one very important thing:

That meeting could have been an email.

The Post Pandemic Hard Reset

I wrote two articles during the pandemic, one around the beginning and one in the middle. It’s time to complete the trilogy.

Our industry has been given a once-in-a-lifetime chance to fundamentally change itself. How we market, price and operate hotel assets needs to evolve to meet the changing market landscape. Here are my thoughts on how to make real changes in order to embrace the tremendous opportunities that lie ahead.

Embrace the Hard Reset

The hotel and travel industry was ground zero for the impact of global lockdowns: the hard reset button on the entire industry was pressed. A hard reset on an electronic device returns it to blank factory settings. It wipes out all your history but then gives you a chance to start over. A chance to build things the right way. Imagine recovering from this hard reset without making fundamental changes to the way we run our businesses. If we fail to change and decide to embrace the “old status quo,” then we are leaving a legacy of mediocrity. Being of “mediocre talent” is one of the greatest insults, coined by Bill Murray during his SNL days. Can you really imagine coming out of this global pandemic and not changing anything?

Change has to come from the top. Do you want to be known the “Status Quo CEO”? A leader who did not make improvements, even when an unprecedented opportunity for change was handed to you? Swift recovery for leisure travel will protect the laggards…but not for very long. Those choosing not to evolve will encounter more and more problems. What happens to problems in any industry? Simple: your competition solves them and moves ahead. That’s how business evolution has worked time after time after disaster struck.

I can see the dinosaurs in the hotel business currently grazing in the fields of returning leisure travel demand, ignoring the giant meteor that has crashed in their backyard. The pandemic has changed all the rules. Let’s embrace the hard reset and do things that were previously considered impossible.

Please Let My People Book

In the spirit of the Bernie meme: “I am once again asking you to please let your guests book a room on your website.” Many hotels jumped to put up the Covid-19 super mega pop-up banner during the pandemic. Now, even as we move into recovery, many continue to flash Covid-19 warnings on their website. A hotel website is not CNN.com or The New York Times, where your guests are coming for the latest updates on the virus. Your focus needs to be on providing a clean and safe space for guests, and letting them book a room without jumping over usability hurdles.

Flashing a full screen pop-up/promo on the home page was tacky long before the pandemic. Pop-ups are not content. (Wait, didn’t someone write about usability mistakes to avoid back in 2016?) A brave friend of mine who traveled in the middle of the pandemic told me she had to close three Covid-19 pop-ups and warnings in order to see a hotel’s booking link on her phone.

I’m sure that a lot of changes have happened at your hotel since the pandemic began. That’s ok, your guests know that. Please neatly organize your content on a separate page that is easy for guests to find. With demand returning, people are once again looking for experiences, stories and engagement. But the first step to profitability is letting them book a room.

Keep It Clean

Cleaning has become front and center on a lot of hotel websites. However, please try not to sound like you never cleaned your hotel before the pandemic. This is an opportunity to share the fact that you have always always been cleaning to a higher standard than random people renting their condos/homes on the side.

This is a big marketing opportunity that big brands leave on the table. There has never been a better time to celebrate your most important and often ignored hotel department: Housekeeping. Brand or independent, you have always had this huge advantage over casual short-term rentals. A whole department that you hired with the sole purpose of cleaning and keeping your guests healthy.

I > AI

Almost all hotels have been sold on the idea of an AI-powered, supercomputer revenue management system, property management system, etc. A system so powerful that, when it is not calculating the width of newly discovered galaxies, it is keeping a keen eye on your rates, revenue, rooms and profitability. Unfortunately, as a general rule, hotel software companies tend to massively oversell and underdeliver when it comes to real world results.

Why is there so much hype in hotel software marketing? The answer is quite simple: The vendors know that hotels will not leave once they implement something. Remember the “Status Quo CEO” I mentioned earlier? Those guys never want to change anything, no matter how outdated it gets. There are connectivity fees, operations hassles, fears about downtime, and the time it always takes for the staff to learn something new. Most “mediocre talent” will stick with their usual vendors, even when they are fully aware that the product is not working very well. Therefore, all software vendors have to do is generate hype and close the deal. Then they can sit back and collect fees.

The pandemic has highlighted the fact that we still need actual humans to make things happen. Even the best hotel revenue software systems cannot work well without historical data. Remember those “unprecedented times” we just went through? Guess what? Your revenue software will not be solving an equation for a situation that has never come up before. Hey, it was barely keeping up to begin with. Here I would like to give a shout out to the revenue professionals who step in when software fails and boot up their humble Excel spreadsheets to make money for their hotels.

The pandemic is a not-so-gentle reminder that when it comes to long-term profitability and pricing strategy, the right humans (at least for now) are still useful.* When entire markets are restructuring, pre-programmed formulas will not work; the reality of machine learning is not here yet. Everything needs a rethink that goes well beyond a simple algorithm that updates your rates based on occupancy. Loyalty needs to be reimagined, as do business segments. People will have to solve these issues. A balanced investment in software and smart people is crucial to having a successful commercial department at your hotel.

*If the AI machines have taken over and are reading this article in the near future…Please don’t kill me, Hal 9000!

Understand Demand and Pricing

The pandemic gave rise to some enlightened pricing specialists. I wrote about this enlightenment phenomenon in detail in my last article. I respect the power of pricing, but the pandemic reconfirmed a hard fact:

Lower rates do not magically create demand.

Demand exists for a geo location, and you use pricing to capture it. Price alone will never magically create demand out of nothing.

Some folks insisted that a $50/night rate would make someone triple mask up and risk their long-term health to visit an island resort in the middle of the lockdown. In my opinion, people that are lowering rates and then yelling “heads in beds!” on conference calls (like they are pandemic revenue experts) should be referred for mandatory counseling.

Pricing is a powerful tool that can help you capture market share. But it has to work in tandem with your marketing and net operating income goals. There is a cost associated with every distribution channel. Yes, even your most hyped and beloved source (direct revenue) is not giving you free money. Before pricing decisions are made, you must consider the cost of getting every dollar to your bank account.

Short-term thinking makes folks treat pricing like a magical ATM machine that will spit out cash every time you punch a few keys. Using dynamic pricing and just dropping rates are not the same thing. You must protect your asset’s long-term profitability.  I wrote about pricing strategy last year in the middle of the pandemic and am glad to report that most of my predictions and recommendations played out well.

Remote Rules Everything

The pandemic has shattered the myth of mandatory in-house revenue, sales and marketing teams. Outside of Operations, team members don’t need to be on site. Other industries that have embraced remote work and hybrid setups are thriving. Imagine reducing costs, increasing productivity and curtailing employee turnover in a single swoop! The commercial/office space industry is in turmoil as more and more employees and employers realize that commuting for hours to sit in a cubicle is often a huge waste of time and money. Time that can be spent doing actual work instead of commuting. Money that can be going to your bottom line instead of rental space.

Revenue Culture Wars

One terrible excuse used by in-house team advocates is that working from an office helps ‘build a revenue culture.’ I have worked with some of the best people in the hotel revenue and marketing realm for more than two decades. They all have one thing in common: remote location friendliness. They manage or belong to a global team of high performers and deliver stellar results. I have always strongly held this belief:

The revenue culture, my dear Watson, is in the results.

When I hear people tout “revenue culture,” I roll my eyes so hard that they sometimes get stuck in the back of my head. I have personally experienced these pseudo culture types in hotel organizations. It usually starts with the CEO/President reading a Tony Hsieh or Malcom Gladwell book. Next thing you know there is a printed company culture book where employees are required to give yearly quotes next to photos of themselves having the greatest time of their lives at the office. Everyone has to say they love working for the company…surreal. Meanwhile, those same employees usually wouldn’t last long enough to be in the next book because of workplace toxicity, nepotism and misconduct. Seasoned employees jokingly pointed out that those asked to leave quotes in the “culture book” during their first year would be the first to leave. That was often true.

Talent Retirement Centers

Efficiency is higher in remote work, according to experts in every single productivity study. You may be a hotel owner/management company with hotels all over the world. Yet, when it is time to build a world class marketing and revenue team, you relocate them to…Dallas!? (Nothing against Dallas. Some of my best, most talented hotel homies live there.) Why would you limit yourself to “mediocre talent” and build a retirement center for them instead of a growth organization? Mandatory relocation does not build a team …it builds your already inflated ego. Leaders should fight the primal urge to walk around the office as the mighty powerful leader, overlooking the minions in their empire.

How about a hybrid model? Then you still get to do your walk of glory several times a year when the entire team is together. Remember, you’ve still got the corner office, baby! Some of your talent needs an office, while others thrive in their home location. You want to see revenue growth? Spend your relocation budget on performance bonuses and watch your company morale and profits soar.

Industry leaders will have to put their profits ahead of their egos and fish in a larger ocean of brilliant candidates. Why settle for average revenue and profits when (to paraphrase Brando in On the Waterfront):

“You could’ve had class. You could’ve been a contender!”

Don’t be that organization shuffling a team of Grade B and C players in and out of your organization based on whether they are willing to relocate. A happy and motivated team working remotely will run circles around you.

Stop the Entropy

No word captures the despair and hopelessness in an organization like entropy. Defined as a gradual decline into disorder, entropy is easy to spot in both large and small hotel companies. I have done several paid and voluntary audits for hotel companies throughout my career that had one single culprit for their decline: Corporate Entropy!

The pandemic further exposed entropy in many hotel companies and has accelerated their decline. Those who embrace status quo right now are extremely vulnerable. A deep pocket investor can temporarily rescue some of these organizations, but the writing is on the wall.

Ten questions for the CEO of a hotel company:

  1. Have you focused your investment and development efforts on a department other than Operations?
  2. Do you really need that many Vice Presidents?
  3. Are you still running your sales, marketing and revenue departments separately with different leaders?
  4. Are you spending on outdated revenue and marketing software that is not much better than an Excel spreadsheet?
  5. Do you still require your top-performing talent to be based in-house?
  6. Are you still wasting time on mandatory team meetings?
  7. Does your revenue team have to copy several people on an email or hold a meeting in order to make rate updates for your hotels?
  8. Does your marketing team have to copy several people on an email in order to change a website photo, create a promo, or update some content?
  9. Instead of doing actual work, are your departments just managing external vendors and juggling reports?
  10. Are you running a retirement home for corporate employees instead of a growth house for talented individuals?

If you answered yes to these questions, you may be in trouble.

I used to joke that I was the Vice President of Vice Presidents during my time as a corporate employee. I have also worked at organizations where the leadership turned their smartest people into reporting monkeys, focusing on the visual formatting of their reports instead of using their spectacular insights.

Corporate Entropy is like diabetes; it is a silent killer. If you continue to ignore it, you will pay a heavy price. However, if you diagnose it in time and manage it well, it can be reversed. As with diabetes, lifestyle changes are crucial to success. You need to form healthier corporate habits.

Discovery of entropy in your organization is not a death sentence. It’s a wake-up call. An excuse to overhaul stagnant corporate practices has literally fallen in every CEO/President/VP’s lap. Good luck. We are all counting on you.

Stop Working With Jerks

Hotels are a capital-intensive business. With high capital comes a high chance of running into jerks. Hotels are definitely a magnet for inflated egos. Jerks are not always high net worth individuals…but we all run into jerks at some point in our careers.

Workplace jerks hurt your health in so many ways. From raising your blood pressure, to weakening your immune system, to making you more susceptible to an array of maladies both physical and mental. Also, the jerk condition is highly contagious and you might unknowingly bring it back to your personal life! Even more scary: dealing with jerks is harming your career by distracting you from doing what you do best. I’m trying hard not to sound like a life wellness coach here, but there is a heavy price to pay when you work with jerks.

Conversely, the benefits of working with good people go beyond anything yoga, Peloton or SoulCycle can do for your overall health. If you are experiencing a career reset during this time: Why not reset your standards on the kind of people you are willing to work with every day?

The pandemic forced many of us to be away from the office. Taking this time to reevaluate your life and work goals is not a bad exercise. If you return to the workplace, make a valiant effort to avoid joining or rejoining toxic environments. Reminder: We have limited time on this planet.

The past 18 months have solidified my relationships with the nice people in the hotel and travel business. I have already lost my tolerance for jerks in the workplace and refuse to work with them. Life is not a romantic comedy where you can convert a brilliant jerk into a loving hero, who was essentially a good guy all along. Jerks don’t change; they are about that jerk life. Don’t believe me? Trust Reed Hastings on this one. You spent a lot of time on his 250+ billion dollar platform during the pandemic:

“Do not tolerate brilliant jerks. The cost to teamwork is too high.”
– Reed Hastings, CEO Netflix

Last year exposed the fragility of life. Don’t waste your time with jerks who are masquerading as brilliant industry saviors. There are so many good good people out of work right now. There has never been a better time to build your nice-people-dream-team hotel company.

Say Goodbye to TripAdvisor Spending

The pandemic accelerated the inevitable decline of one of the most successful travel review websites in the world. I wrote about this massive change coming to the review business back in April of 2019. Businesses built on Google cannot survive once Google decides to do exactly what you do…only better.

TripAdvisor had a chance to be great but, like most corporations, it went for greed. All that easy ad revenue from hotels was too much to pass up. Their basic hotel listing (a simple link to your hotel website) used to cost small hotels $15,000 to $20,000 per year! And hotels were paying this money because they feared that they would lose their rankings. They could see it happening all around them even though it was always blamed on the magical “algorithm.”

Today, TripAdvisor is offering the very same link to small hotels for $350/month. You don’t want contracts? No problem! Pay as you go. The simple directory link from the before-times was marked up 20X for only one reason: to build their cash reserves. Let’s not forget this fact when this same old directory listing starts to go up in price as travel sector recovery solidifies.

As Google My Business continues its march to become the most relevant review website in the world, you should shift your focus to your business listing. That’s where your guests are leaving and reading reviews. Paying $20,000 for a linkback from a review website will soon be looked back on as a silly thing hotels used to do when they didn’t know any better.

Recently TripAdvisor launched “TripAdvisor Plus,” a travel subscription for guests that will cost $99 a year and get people discounts on hotel rooms. It’s another product created to boost their own revenue that does nothing for hotel owners. Remember kids, these guests were already going to come to your hotel. Now they will just come in at a lower rate. So, we are building loyalty for TripAdvisor using our hotel assets.

Right now TripAdvisor sits on a mountain of cash, thanks to the hotel industry. They will be fine and will not be going away anytime soon. Hotels, on the other hand, need to stop spending their money on outdated platforms.

Communicate Better

Most of the big box hotel brands struggled to effectively communicate with guests during the pandemic. Why are brands finding it so hard to to talk to human beings?

Over the last year, Hilton Hotels has sent me an email every month offering me a $119 rate in Orlando. Now that recovery has begun, the rate has gone up to $249, but it’s still the same email. I wonder how I got on the Orlando email train with Hilton! I am not the lead guy in the Book of Mormon musical.

Meanwhile, Marriott’s Bonvoy has been telling me that I must explore the wanderlust they know is, and I quote:

“eating me inside.”

Coming out of the pandemic, do we really have to talk to people like this? A multimillion-dollar marketing budget, thousands of meetings, and this is the best they can come up with?

No conversation about hotel communications and CRM can be complete without referring to my perennial favorite: Melia Hotels. They inspired my hotel CRM guide and also made it into my first pandemic article by sending me a 45% off promo email the week the whole world was shutting down! Guess what? They read my blog, completely transformed their online strategy, and sent me a thank you basket….just kidding! They sent me one or two emails every month offering me the usual 25% to 45% off every single time. What really caught my attention was this:

 

Three hits right out of the park:

  1. Embedded autoplay video
  2. Bad grammar, spelling and content breaks
  3. Amateur photoshopped image of lady walking on water

The pandemic (so far) has killed around 3.93 million people worldwide. How does this line pass any marketing meeting, even in the most entropic organization:

“Your house, so happy that you are not there.”
– Melia Hotels

However, not all is morbid on the communication front. One of the best emails I have seen during the pandemic did not come from a hotel brand, but from one of the fastest-growing OTAs in the world: Airbnb. It is possible to talk to people as if they were people.

In this simple email, Airbnb communicates some important points with finesse and empathy. They have non-sarcastically hit it out of the park in three ways:

  1. Empowering Hosts: Without hosts, there is no revenue. Offering them communication options was a great idea. When was the last time a hotel brand asked you what kind of marketing content you wanted to receive, and how you wanted to receive it?
  2. Providing Useful Content: 40% to 50% off discount emails are not communication. They are hotels shouting on a bullhorn to their entire database. This message is nicely targeted and provides information the hosts need.
  3. Using an Effective Layout: Clear calls to action, clear headline, personal and emphatic tone.

Hotels, please embrace sympathetic marketing. You can be edgy and creative, but you don’t have to be insensitive.

Conclusion

A spectacular recovery is in progress. I am extremely happy to have wasted zero hours on recovery speculation or creation of a pandemic recovery guide. We have a massive challenge ahead of us, no question. The one resource that is going to be more crucial than ever is good people. Your success will depend on who you choose to have on your team as demand fully returns to a hotel market near you.

Finally, one last reminder.

Pandemics come and go. WuTang is forever!