When Imtiaz Ali began his successful career in hospitality at a luxury hotel in midtown Manhattan, his primary objective, customer satisfaction, was simple to achieve. Go above and beyond guest expectations, anticipate guest needs and deliver before being asked, and genuinely care to make them happy.
Though these basics remain centered in the spirit of hospitality, the competition to attract guests to your hotel has changed significantly since then. Ali knows it all too well from his 20+ year career in the industry. At his current position as Regional Director of Revenue & Distribution at Highgate Hotels, Ali is among few professionals to have mastered the game of digital marketing to benefit his hotels best way he knows how—by maximizing revenue.
We spoke with Ali, who oversees some of the largest New York City properties in Highgate’s portfolio, to discuss some of the substantial changes hospitality industry has witnessed in the last decade thanks to technology and how they altered consumer mindset. The veteran revenue manager also shared with us what he thinks the future holds for digital marketing in hospitality and what hoteliers must do to adapt and remain relevant.
Travel Tripper: Thank you for joining us today.
Imtiaz Ali: Absolutely! It’s my pleasure.
TT: You have been in the business for a long time. What do you see are the biggest changes in revenue management in the last ten and five years?
IA: Within the last ten years, I would say the biggest change has been the way guests book their hotel stays. Ten years ago, they would walk into a travel agency and the agent would be the one influencing their decision-making process, while today guests are completely independant and very well-informed in choosing a hotel. Publicly available reviews are everywhere, from major travel websites to hotels’ own websites. Everything is transparent: the good, the bad and the ugly.
Guests can filter the hotels they are interested in by ratings and reviews and instantly shortlist only the ones above a certain level. Thanks to complete transparency, only hotels that deliver excellent customer service and amazing product will continue to enjoy more and more transient bookings that come in as a result of reviews.
And guests do take leaving a review seriously, they spend time on this. One of the big changes in the last few years is how reviewers are also ranked on travel websites. When you go to TripAdvisor for instance, you see that reviewers’ trustworthiness is displayed openly. Someone with many reviews is labeled an expert traveler so their opinions and experiences will surely be taken seriously by travelers during the decision-making process. It is very important for a hotelier to understand this space and continuously work to improve their ratings and reviews.
TT: In your opinion, what are the biggest challenges of digital hotel distribution today? What advice would you give to other hoteliers to approach these challenges?
IA: There is definitely so much data and information available to hoteliers that it can become confusing at times, not to mention all the new booking channels that didn’t exist only few years ago. Not a day goes by without hoteliers being approached by a new startup or a new technology that promises to be the next best thing in travel, which is a very fast-paced industry in terms of technological improvements.
As a hotelier, you have adapt to fast changes and in fact stay on top of them. When a new player in online booking game or a new startup knocks on your door, you must be able to evaluate the benefits and quickly re-engineer your strategy if you see value in partnering with them.
Another challenge is managing your PPC budget. It is no secret that big players in the OTA world can afford to spend a lot of marketing dollars on certain keywords, which leaves out some hotels without a chance to efficiently maximize value of their PPC investments. You just have to stay focused on your organic sources of business and finetune OTA contribution in your distribution mix.
Lastly, some of us in the hospitality industry are known to be stubborn and not so apt to change. It is human nature to not like change, especially when it happens as fast as it does in our industry, but we must do everything we can to accept change and evolve with it.
TT: Absolutely! You mentioned a little bit about distribution mix. What does a healthy mix look like for you?
IA: Every hotel is different, of course. They each have different needs based on location, supply and demand, etc. But as a general rule of thumb, I could say that your website is your most important part of the mix. At least 30-40% of your bookings should come from your own website and for that to happen, you must make it absolutely very easy and simple for guests to book your hotel. There are mountains of data available to you to make that happen, so use them and make the booking experience as seamless as possible with little to no friction.
Another important aspect is your call center, which should contribute around 15-20% to your distribution mix. By the time guests call your hotel to make a reservation, their research is likely to be finished; their decision is almost made. With an excellent call center service, you can really influence their decision and possibly increase revenue right there by upselling.
And no distribution mix would be complete without OTA contribution. It’s just the way guests book their hotel stays has evolved. You should try to work with it instead of against. By keeping this channel ideally around 10-15%, you will not have missed out on opportunities that might not have come your way otherwise, and you still maintain a healthy, profitable mix.
The rest should all be in-house business in my opinion. And by that, I mean your groups, the GDS and even some FIT depending on your hotel’s needs. In fact, it is often forgotten how much travel agencies improved globally and even increased in numbers in some places. So they are a great source of business still.
TT: What new technologies, platforms, and/or distribution channels seem promising to you? What do you think will be the big distribution trend of the next few years?
IA: I think that retargeting technologies are very important. They help change an undecided guest’s mind. When used efficiently, retargeting prevents a guest from leaving your website or helps finalize their decision when they’re just lingering around pages. Pop-ups that display value-adds, for instance, help guests get more value for the money they spend and hotels end up getting direct bookings. It’s a clear win-win.
In terms of trends, we all know that booking windows have shrunk so much and I actually think that we, hoteliers, made it so by offering too many discounts too fast at last minute. What typically used to be a 14-day booking window for certain segments has shrunk as low as 48/24-hour windows. That’s too much risk placed on your perishable inventory to leave rooms sitting empty up until last two days or one day even.
We need to readjust this trend by not going over the top with last-minute discounting. The only sound way to do that is to strategize far in advance and constantly reevaluate what works for your hotel and what doesn’t. I find value-adds to be a key in layering bookings in advance but something else might work for your hotel. You have to test different ideas when you have time to do so.
Additionally, I must mention rise of the mobile platforms because they have absolutely been very popular. This trend has been strong in the past few years and looks like it will continue to be in the coming years. More and more people use their smartphones for literally everything including searching for and booking their hotel stays.
It is critical for a hotel company to have a well-functioning mobile version of their website that is very simple to use and looks clean. There is no need for fancy bells and whistles on a mobile booking engine that you might have on your regular website. Just keep it as simple and quick to load as possible to facilitate bookings.
TT: What are your most important metrics for ROI?
IA: Length of stay is an important metric that we keep track of because it is key in keeping cost factor low. The more you manage to increase your average length of stay, the lower your costs will be, which directly improves your bottom line. A five-night stay, for instance, means you will need less resources to manage guest experience and it just reduces the stress on your overall operation. Not to mention that the longer guests stay, the more they help to even out your demand patterns between days in high demand and shoulder nights.
Another metric we look at is the overall revenue made from additional outlets such as spa, restaurants, gift shops, rental space etc. This is important especially from an owner’s point of view, who most definitely desire to see positive numbers from all aspects of their investment. Rooms are a big portion of it, but not the only portion. For example, if you can maximize your spa revenue, whether it is for guests only or open to locals as well (thanks to a special marketing strategy you put in place) it would be eye-opening to closely monitor the results of your campaign and be able to measure its success.
TT: Yes! Measurable strategies are very important. On that note, would you say that social media campaigns have a big impact on revenue?
IA: I can’t quite say that social media efforts directly turn into increased revenue. I think social media presence equals PR more than revenue. There is no doubt that the budget you allocate for social media campaigning will bring increased exposure and it will put your hotel on the map for some guests who might not have otherwise heard of your hotel. But will such exposure to new guests immediately turn into revenue? I can’t say yes but it will definitely have a positive impact in the long run.
Consistent newsletters and an active blog for your hotel are just some of ways you can keep your guests engaged, whether they are loyal fans or new followers who just started to show an interest in your brand identity. Ultimately these efforts will pay and turn into revenue.
Key takeaways from Imtiaz Ali on revenue management
1. The way guests book their hotel stays have changed drastically in the last ten years and it will continue to change. Hoteliers must be able to adapt to these changes if they want to remain relevant.
2. Online reviews are taken very seriously by travelers and they play a crucial role in decision-making process. Hoteliers must give their best effort to accumulate strong, positive reviews and always respond to guest comments/questions.
3. For revenue maximization to work, digital marketing must be incorporated into the strategy far in advance instead of last minute. Hotels that test new digital marketing approaches in advance succeed and avoid deep last minute discounts, which shift consumer mindset in the wrong direction.
4. Rising trend of mobile plays a key role in how guests make their hotel arrangements. A hotel’s mobile booking engine must be at impeccable shape at all times with a simple, user-friendly interface that minimizes friction and facilitates quick bookings.
5. An important metric in measuring ROI is length of stay, which can help hotels lower costs and reduce operational stress when increased. It also helps create balance between days in high demand and shoulder nights.
We want to extend a special thanks to Imtiaz Ali for his valuable insights and experiences. To learn even more, watch this webinar on digital marketing, where Imtiaz is featured as a panelist.
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