Company profile: COVID was the turnover of the hotel…


The COVID pandemic has been a “watershed moment” for the hospitality industry, according to iDeaS, a U.S. revenue management software specialist.

Mike Chuma, vice president of global marketing, said the company had achieved levels of growth since the pandemic surpassing anything it had ever seen.

This has been pushed by operators ranging from multinationals like Accor and Hyatt to small independents battling staff shortages by embracing technology to automate and improve efficiency.

Chuma said, “Necessity is the mother of all rationalization and innovation. Hotels have found out who their best friend is during COVID, and it’s revenue management.

IDeaS has acquired 13,000 properties in the last two years, doubling the total from the pre-pandemic period, and is now well established in major countries in North America and Northern Europe.

The still highly fragmented Southern European markets such as Spain, Italy and Portugal are seen as an opportunity for future growth.

Chuma said: “COVID was a watershed moment for the hospitality industry as a whole. Once the initial shock of the pandemic passed, we grew faster than ever.

“The pandemic has dramatically increased awareness and demand for not only revenue management systems, but also the ability to have insight and automation into a hotel’s business operations.

“We still have labor shortages in hotels – that’s the number one problem operators are trying to deal with.”

Chuma said focusing on revenue management and profit optimization helps hotels operate “in a more meaningful way” while pushing traditional performance metrics such as average daily rates (ADRs) and occupancy.

IDeaS has seen growing demand for its “non-flagship” products, Chuma says, which provide users with the ability for greater operational efficiencies, such as staffing and housekeeping.

RevPlan, a budgeting tool that forecasts demand in areas such as food and drink and other ancillary revenue to help hotel operators increase profitability, has “taken off in Europe”.

Chuma said meetings and events is another area that has seen a strong comeback, particularly for small groups booking function rooms, which has rebounded faster than business travel.

This reflects changing patterns of work with teams of colleagues traveling to meet colleagues instead of traveling in large groups to major city centers. “Business travel has almost become group travel, in a way,” Chuma said.

Mastering this and other information helps the industry be more profitable, a trend that was happening before COVID but has been accelerated by the crisis.

“The industry was going to get there anyway, COVID just accelerated it. What he did was create the accelerator to steer people away from traditional excuses for why they couldn’t do it.

“It took away the reasons for not doing it and forced them to do things that they were talking about but were hesitant to do.

“You can’t get out of there with humans. You need to have systems and tools because you have fewer people making more decisions

“In the spring and summer of 2020 hotels learned to operate in a simpler way, now they bring people back but do it in a much smarter way. Hotel operations are now much more strategic.

The resumption of travel has seen many people new to hospitality entering the industry who need to react to market conditions and not be crippled by the old silos that existed before the pandemic.

Chuma said this greater cooperation between functions such as commerce, marketing and IT has given people a “different lens” through which to run their businesses.

IDeaS moved to cloud and software as a service in 2002 after the 9/11 attacks, allowing it to respond to the pandemic crisis by “completely reformatting” its 112 separate algorithms, which Chuma said it continues to do. approximately every six weeks.

This has helped the company to be more “responsive” and “agile” and to reduce its dependence on historical data, which is still considered an indicator of human behavior, but among a mixture of factors that are continually updated to ” the good moment”. optimization”.

“In the past, the revenue management industry relied heavily on historical data. We’ve removed this dependency by going “memoryless” in some cases.

“It allows us to react to situations and we are already seeing it at the moment with the economic situation and the cost of living crisis. We are already in the next crisis.

“We need to react to the right parameters and have just rolled out a series of algorithmic tweaks to be able to react. Real time is acceptable, but this data becomes very verbose. It can be misleading.

“We basically run hundreds of tests behind the scenes with machine learning and artificial intelligence to give the best predictions. It is a decision system.

“If we have a data anomaly or a changing event, we can re-forecast that at very short notice so hoteliers can respond appropriately.”

The pandemic prompted iDeaS to accelerate its collaboration with hotel customers such as Choice Hotels and Wyndham to develop and deploy a white-label mobile version of its system.

ChoiceMax offers revenue management in a more flexible, user-friendly format that adapts to a client’s unique business strategies, Chuma said.

“We were able to launch 5,000 properties in less than a year,” he said. “It’s a rapid shift in the evolution of how you can consume revenue management technology.”

While this new platform is currently being offered to major players, iDeaS says revenue management must be embraced by hotels of all sizes if they want to maintain a competitive edge and respond quickly to market conditions.

“It’s about being smarter about how you use your most valuable asset: the coin. If you’re consistently booking at 100%, you’re probably leaving a lot of money on the table. »

Chuma estimates that iDeaS is capable of realizing a 15% increase in revenue for its customers and adds $225 million to its system operators in a single quarter.

But he says it combines with support to help organizations save time managing revenue and become more strategic in the way they operate.

And an important aspect of this is combining distribution channels and understanding the value of indirect partners and OTAs versus direct ones.

“It’s a bold statement to say that everything has to go straight,” Chuma said. “It’s not reasonable for all hotels. Third party business is extremely important. OTAs provide a service that in some cases goes well beyond what is assigned to them.

“If you go direct, you have to incur your own marketing costs and your own acquisition costs, your own data, your loyalty and customer retention programs. OTAs are a necessary part of the ecosystem.

“It’s not us versus them from a direct booking perspective. Hotels must make a decision on the right mix for their needs. The way we work is that we give them the ability to have more intelligence about what their optimal channel mix is. »

Ultimately, while iDeaS promotes the benefits of automation, human operators are still able to step in and override machines if they disagree with a recommendation.

And for Chuma, it not only ensures that the right decisions are made, but that the technology continually learns and improves its decision-making.

“We talk about automation, but really the biggest benefit of what we’re doing is that the system relies on the intelligence of the person,” he said.

“It’s when people interact with the system appropriately that you see a massively higher amount of performance and revenue. It is the balance between man and machine.

“If the past few years have taught us anything, it’s that uncertainty is not diminishing. The algorithm helps navigate through uncertainty.


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