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European Hotels Engender Loyalty with Better Revenue Management, Marketing

by Sarah McCay Tams, Contributing Editor, EMEA |

In June 2015, citizenM Hotels’ Commercial Director Lennert De Jong was elected to succeed Christian Boerger as chair of the HSMAI Region Europe Revenue Management Board.

De Jong has been working in hotels for more than a decade. He is currently responsible for citizenM’s commercial strategy and transformational topics. He is passionate about developing the hotel distribution landscape and fine-tuning hotel online marketing, demand management and sales. He believes hotels need to work together to create a fair price for the guest and a fair price for themselves.

Since taking on the chair of the HSMAI Region Europe Revenue Management Board he has been involved in two Think Tank conferences, leading discussion and change in the revenue management field.

“The Think Tank conference that we organise each year follows the same pattern,” De Jong said. “The people working in the industry on a daily basis organise the conference. We are not paying for speakers. We are asking for people to come up with a good story and tell it.

“It is hoteliers with the microphone, and it all makes sense. There’s no vendor pitches, no sponsor pitches — it is pure. This is such a fantastic group of people, and to take a more leading role in this, I really feel energised by it.”

A year into his chairmanship, we caught up with De Jong to find out more.

Lennert De Jong

Lennert De Jong

What have been the most notable points of your HSMAI chair so far?

I’ve learnt that we all have the same issues. Everybody has their own country and culture. We have European groups — Accor is French, IHG is from the U.K., but each hotel has its own country. Despite this, all of our issues are pan-European. The HSMAI has regional meetings, and our aim is to show the independent hotelier you should not focus just on your own country. People go on mobile, people are turning more towards the OTAs, Google, Trip Advisor — it affects us all. I hope that, with the right energy, we can continue to play a bigger role for these people in their countries. If there is one industry that really benefits from a focus at a European level, it is the hotel industry.

What do you hope to achieve during your tenure with HSMAI?

I hope to achieve even better visitor numbers at our events and more increased intensity in the times that we get together. I really hope that we get more independent hotels to come to the meetings. We need more new hotels and new faces.

During the last Think Tank, I watched an independent hotelier sit next to a chain hotelier, and these guys were able to have a discussion on distribution and revenue management. That was interesting to see. We are all talking the same subject. We might think we know a little bit more at the corporate level, but that fragmented nature of the industry means that individual hotels are dealing with the same issues. Independent hoteliers really know their stuff. What’s more, they say what they think.

Europe’s hotels market is characterised by independent properties and small chains, making it very different to the big-chain dominated U.S. What are the key differences in hotel revenue management in Europe compared to the U.S. and other regions in the world?

The level of sophistication when it comes to revenue management is lower in Europe. In the U.S., people take the subject seriously. They invest in revenue management systems and get better at it. In Europe, it is more fragmented. There are still hoteliers who love working in Excel. Do they have a forecasting procedure? I don’t think so. Do they have a pricing mechanism? I don’t think so.

However, it doesn’t make the U.S. better. If I look at what I’ve seen the big hotels in New York do — hotels going from $400 to $200 a night, undercutting their competitors — they’ve not learnt anything about revenue management.

European hotels are more committed to the guest when it comes to setting a price.

Director of @citizenM: European #hotels need to defragment industry. Click To Tweet

What do you think are going to be the main challenges faced by revenue managers in the future? How can the industry prepare or adapt?

The main problem for revenue managers is that there’s more and more of their inventory going on the platforms, such as the OTAs. Even if everything is hunky dory it’s difficult already, but if we are going into a recession then what is going to happen? It’s going to get more intense. Big platforms are becoming more and more important, but the likes of Expedia do not make the prices. The problem is that there are pool sharks circling, and if hotels drop their prices for a quick gain it is bad news for everyone.

That is the main challenge going forward. We’ve had seven good years, and now there are signs that the next few years are not going to be as good. The institutional investors are already protecting their interests. They are looking at the curve and the curve has to go down at some point.

What can we learn from industry innovators such as Airbnb? How should hotels now manage their relationships with OTAs?

The main thing I’ve learnt is that it is competition on the left field from Airbnb and competition from the right field from your distributors.

Booking.com has now launched a guest messaging system.

Similarly, Airbnb offers direct interaction with a guest and it is something that the guest likes. The guest doesn’t want one-to-many communications; he likes one-to-one. We have to learn it is H2H (human to human) and not B2B or B2C that drives our business. That’s why these guys are highly successful.

Hotels have tried to automate things where they don’t want to contact the guest one-to-one. But today’s travellers want to be able to chat on their smartphones. They use the Airbnb app and expect an answer within minutes, not days.

You are commercial director of CitizenM hotels. What is your own approach to revenue management?

We are really data-driven and are always interested in more data points that will make us smarter. We are curious by nature. We have a certain level of sophistication in a relatively young company. We are sophisticated when it comes to revenue management. What we do that not a lot of other hotels do is we keep the long-term relations with the customer more in mind that the short-term gains. Even if we could price ourselves at three times the price when the cardiologists are in town, we don’t do that. That’s because our aim is not to be full every day; our aim is to get the right people in and get them to come back, the people that come back are less expensive traffic than one-time customers.

If the doctors are in town, and the customer that stays with you once a week or once a month has to pay double to what he normally pays, guess what? He is going to try something else. You risk losing a loyal customer.

We don’t like the price discounting closer to the arrival date either, and we are doing every thing we can to price fairly.

We believe in a long-term relationship with our customer. We look at customer lifetime value.

What future innovations would you like to see in hotel sales, marketing and revenue management?

I would love to see the platformisation of data. We need hotels eager to provide basic data, so that companies like Duetto, who are interested in making the industry work smarter, can help the industry defragment. Look at booking.com: It has 900,000 properties. Imagine a data platform with that number. We need to understand a completely defragmented industry.

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Sarah McCay Tams, Contributing Editor, EMEA

Sarah McCay Tams, Contributing Editor, EMEA

Sarah is contributing editor covering Europe, Middle East & Africa (EMEA) for Duetto. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.
Sarah McCay Tams, Contributing Editor, EMEA

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Sarah McCay Tams, Contributing Editor, EMEA

Sarah is contributing editor covering Europe, Middle East & Africa (EMEA) for Duetto. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.