How hotels turn data overload into profit growth

The data is there now, and AI is going to help us harness that data and become better at personalizing and personalizing at a bigger scale so we can target every single individual that we know is looking at the hotel or considering booking. Welcome to the Hotel Moment podcast presented by Revinate. I'm Karen Stevens, Chief Marketing Officer, joining you from sunny San Francisco, California. And I'm Dylan Cole, Managing Director of Revinate Europe, calling in from Amsterdam. This is the podcast where we explore how technology shapes every moment of the hotelier's experience, and more importantly, how the right technology delivers real outcomes for hotel teams and guests alike. From revenue strategy and guest communication to operations and marketing, we sit down with the people transforming hospitality around the world. Depending on the conversation, sometimes it'll just be me behind the mic, and sometimes it'll be me bringing a European perspective and stories from across the global hospitality industry. Whether you're a hotelier, a tech enthusiast, or just curious about where hospitality is headed, you're in the right place. Get into it. Hello and welcome to the Hotel Moment podcast. I'm your host, Karen Stevens, the Chief Marketing Officer of Revinate. And today we're excited to welcome Jeff Michael, area Director of Revenue Management at Sage Hospitality Group. Jeff is an experienced voice in revenue strategy and commercial leadership. With more than 25 years of experience, Jeff has seen firsthand how data and commercial strategy have transformed the hospitality industry. Today he joins us to talk about the evolution of revenue strategy, the growing importance of data and commercial intelligence, and what separates high performing commercial teams from the rest. So without further ado, here's Jeff. Jeff Michael, welcome to the podcast. Thank you. Happy to be here today. Yeah. So, Jeff, you've worked through multiple eras of hospitality, from traditional revenue management to today's more data driven commercial environment. So I'm really curious, what first drew you into the commercial side of hospitality and what has surprised you the most on how that role has evolved over the years? Yeah, so thank you for reminding me of my storied career. Makes me feel old, but. So really the path of how I got into the commercial side was through operations. I always grew up wanting to be an operator in the hospitality industry. So I spent roughly the first half of my career in various operations roles. And really when I kind of evolved and got into the general manager roles, I realized that I had a real knack for the revenue management side of it, the top line side of it. And I also knew as a general manager that if I could get the top line revenue to come in for the hotel, like running the Hotel was easy. It was really needing to have the revenue coming in, which just makes it all work. And so I always had this, this knack or real passion for making sure that the revenue side of the business came in. And that's how I ended up in commercial. So after various general manager roles, when I was asked by the company I was working for at the time if I wanted to jump into a revenue management role, I'm like, huh, I hadn't really thought of that. But when you look at it, it's like, this is what I really love about what I'm doing. So that's how I ended up getting into commercial and just really kind of evolved from there. And I've been in commercial ever since. So really the second half of my career has been in various commercial roles. And really how it's changed from when I initially got back into commercial a dozen or so years ago is that really. It was. I don't want to oversimplify it, but it was a much simpler process at the time because you didn't have all the data that we have now or all the technology that we have now. I mean, it was truly working with, in hotel and extranets and, you know, manual changing prices, and you just didn't have the benefit of a lot of data. So you went off limited data points, you made decisions, and you also were really just dealing predominantly with pricing. And that's just not how it is these days. These days you're more of a commercial strategist. You need to know revenue management, you need to know marketing, you need to know sales, and you need to be able to look at the big picture and be able to pull all this data available to us now together to make decisions. Yeah, you know, you hit on a really interesting point. Well, you called it out. There's access to more data today than ever before, so that has grown exponentially. But I think a lot of folks still struggle to make better decisions. So what is the difference between simply reporting on data and creating true revenue intelligence? What's your view there? Yeah, it's tough. I think this is one of the true challenges. It's like back in the day, we used to always said we need more data to make good decisions. And now we have this overload of data and we're almost in paralysis because it's like, well, we need to look at all the data before we make a decision. And you end up being almost unable to make a decision because you're bogged down really in the data of the whole thing. And really that is the challenge today. And what we have to make sure we're doing is really looking at the data points we need and then making decisions based off that. So we don't want to be reporting out all the time, which is a constant challenge. It really needs to be. Look, let's do the reporting we need. Let's use the data we need to make decisions and keep making decisions that help drive revenue for the hotels. Yeah. So what are some of the signs? Because you work across a number of hotels now in your current role, so what are the signs that you've got a hotel that's drowning in reports? Instead of using those insights strategically, like, what kind of tips you off that we're in a data morass instead of being able to see how to execute and make a difference? Yeah, I mean, it's really when I see lack of action. So when you're talking to a revenue manager and they'll tell you about this is happening, this is happening, and really just. They're just kind of regurgitating data. To me, I'm like. Then it's like, well, what are we doing about it? And there's a pause. It's like, well, I don't know. I'm just looking at this data. This is, you know, and so when I see the lack of action, that tells me that we're kind of drowning in the data or drowning in the reporting. And. And also, I mean, it's just a matter of looking at the structure of the revenue manager as well, and making sure that we're not drowning that position in reporting task. You know, I mean, the position is about strategy, not about spending all this time reporting. And if you're reporting, you're not taking action and really performing the core function of your role. Right. And one thing, you know, you. When we talk about commercial strategy, which, I mean, I think has been around for a long time, but really became a buzzword over the last couple years, which is really the alignment between revenue management, sales and marketing. But in practice, that can also break down quickly. So where do you notice commercial teams struggle the most to stay aligned? And how do. How do you make sure that the teams hold each other accountable? So you talked about action, but with action comes accountability and making sure you can rely on those other pillars. So how do you think about that? Yeah, so you're right. You know, commercial strategy and commercial. The term has been around for a long time. I'm not sure we've really gotten it right a lot in many cases. But the key that I found Is that, you know, a lot of times we say we're a commercial team, but then you look at, like, the goals and objectives of each team, and they're completely different, so they're not aligned. And a lot of times that we say it's alignment, we have commercial alignment. Then we look at the incentives and goals of the departments and they're completely misaligned. So really what has to happen first is an alignment of goals and incentives to make sure that the whole team is on the same page. So in my experience, that's where it starts. So you have to bring the entire team together and you have to have the same goals. So in various roles, when I pull these commercial teams together, we sit the team down. Initially, it's like, okay, so what are the commercial goals for sales, marketing and revenue? And they all align. So we walk away and they're all aligned towards the same goal. They're all driving top line or profitability. And we walk away knowing that we're working together to get to these goals as opposed to having goals that are still siloed by department. I think that is really interesting because you're right. Again, going back to the, like, the influx of data, there are so many data points that you have. And so if you're looking as a department to say, well, what do we want to achieve as a KPI, you could pick a number of things that have zero impact to anybody else. So just give me. I mean, you kind of called some of it out there, but what's the simplest example? Is it top line profitability? Is it net operating income? Like, what do you see that you want to do? Like, hey, guys, this is our North Star. What do you typically look to really these days? It has to come down to profitability. And I think that's a change in thought process as well. And, you know, in the past it was. I mean, you're looking at revpar, you're looking at rgi, and again, you're kind of in a silo when you're looking at the entire hotel. And now you've got to tie the goals back to profitability, because at the end of the day, we have the commercial teams that need to be aligned, but the entire hotel has to be aligned. And the whole goal of what we're doing in a hotel for an owner is driving profitability. So you have to have that complete alignment. And that's why it comes down to profitability at the end of the day. So I would love to understand for hotels that have. Are you looking also at Total revpar. Everything that's going on in the outlets, like how much the share of wallet you're getting out of that gas. Like when you talk about profitability, obviously you're talking about all the expenses and revenue, but how do you look at that more broadly? If you're going to motivate the entire team at a hotel, it is total profitability. So you're looking at the outlets, et cetera, what ancillary we're bringing in. And there are also expense considerations that have to be taken into account. Okay, so Jeff, guest acquisition costs continue to rise and loyalty is becoming harder to maintain. So how should hotels think differently about guest lifetime value in today's environment? Yeah, and here's where I think when we look at data, we've got the data around guest lifetime value, it's hard, you know, in many instances we're still struggling to always have that calculation. So this is an area where I think AI is going to help us more and more about helping us hone in on what guest lifetime value is. So I think this is going to be a more important key metric going forward. But basically the need to understand guests lifetime value is going to become more and more important because it's going to help us improve the channel mix. It's going to help us focus on retention as opposed to just that single time booking and really help us with personalization and targeting as well. I think right now we do it, it's not amazing, you know, but when we can get true metrics and information around guest lifetime data, we can identify the type of guests that we're targeting or the segment and really go after that segment. And at the end of the day we want the guest that's going to continue to come back years and years and years as opposed to the one time guest coming through the hotel. And so those are the guests we need. The retention is what we need to be focusing our efforts on. Yeah, I hear you kind of hit on two levels there, like the macro level of identifying segments and channel mix and how do these guests respond to certain activities, promotions, offers. And then there's also the very one to one marketing of understanding who your best guests are and making sure that they keep coming so that you know that business traveler that always likes the concierge floor, that values the continental breakfast more than the free parking, whatever it might be. So I think that's a really interesting take is trying to figure out how to kind of hit both sides of that. Yeah, and you do have to hit both sides of that to make it all work. Absolutely. So you've led both operational teams, as you mentioned, and revenue management teams. So what truly separates high performing hotel commercial organizations from average ones is it talent, structure, leadership, communication. Like, what do you see that secret sauce being? It is a collaboration of all of it. So you do have to have the right talent at the hotel. Now, it doesn't mean you need to have the most experienced person. You need to have the right talent that you can develop. That's a good fit for the team and that's really where you start. You got to start with the people and then from there it really is, it comes down to the leadership and the leadership style. When I've been a part of these high functioning teams, it comes down to the team being one. There's open communication. Everyone clearly understands what the goals are and they clearly understand that each member of that team will do whatever it takes, regardless of what their title is, to help that hotel be successful. And when you're able to develop a team like that, I mean, you're unstoppable. You know, you're going to be the market leader. It's just like you're on a whole other level. And I've had the privilege of being a part of a few of those teams and, you know, it takes time to bring all of that together to build that trust level, open the communication, making sure that everyone holds each other accountable. You have to have that relationship amongst the whole team. And that's the key. Once you have that, that's the secret sauce and you're unstoppable. Yeah. And it's so fun, right? I mean, that's what, even hearing you talk about it, I'm like, oh, yeah. To be on teams like that, you know, it's like we used to say here, the people are the product, you know, because we really believe when you have great people, then you're going to have great output. And yeah, even hearing you talk about that kind of a team feels inspiring to me. It's fun. It's fun to go to work, right? It is. And it should be fun to go to work. Yes, that's right. So we talked a little bit about data. So it's all over the place for every commercial decision inside a hotel. But looking ahead, how do you see data and technology continuing to reshape hotel commercial strategy over the next five years? And I mean, things are moving so fast. We could probably talk about the next five months, but you hit on some of it. What are you seeing if you could crystal ball it? Yeah, I think what I would say, you know, I mean, yeah, five months, five years and we're already headed down that path is a couple of things, is that really will use AI to get out from under the reporting and kind of the analyst tasks that revenue managers have now. And I think that's a change that I'm already seeing and it's only going to get better. And so when we talk about this data paralysis and all these reporting, that's the stuff that AI is going to take off all of our tables. So now we can be true commercial strategists and we're all time starved. So that's, I think is going to be probably the biggest evolution we'll see well before the five year mark because it's already happening. But it's exciting to me because I talk to revenue managers all the time and it's like I don't have time to do this because I'm doing these reports or I've got to do all these manual tasks that that AI can do for us. So that's going to be the biggest. And then I think we can get into some of the things that we've talked about as an industry for many, many years. So like we've talked about personalization for many, many years. Like, are we great at it? I don't think we're great at it, but the data is there now and AI is going to help us harness that data better at personalizing and personalizing at a bigger scale. So we can target every single individual that we know is looking at the hotel or considering booking. And AI can automate that and use that data that we have that we haven't been able to use great yet and help really fine tune that marketing task. And it's also the total revenue optimization or total profitability of the hotel. Again, another thing that we've talked about for years, probably since I moved over to the commercial side, but we haven't had the data, the bandwidth to do it. So now AI is going to be able to help us look at these new metrics like we just talked about lifetime value or guest spend acquisition costs, which we can kind of calculate, but it's always a difficult calculation. AI is going to help us with this and help us make better overall optimization decisions in the future. So I'm curious, how are you thinking about training your team to use AI effectively? Because I think it's coming down for me. I know having been obviously in the workplace for a while, that a lot of what I'm trying to work through is how I get the prompts right, you know, like I know what I'm looking for. But training a machine to then give me the output quickly. So is that something that you're working on with your teens or how are you thinking about it? Yeah. So in my current organization we are looking at, it's like just a base level AI competency. And so there is training that we have that roll out just to get you kind of base level comfortable with it. But from my perspective and what I can do, it's like, look, just get in there and play around with it, you know, and you'll be amazed at, you know, what you learn just by asking AI a question. Or even just one of the tasks was recently was like, hey, just ask it to look at your calendar for next week and tell me how I can optimize my week. And everyone came back blown away because it's crazy. I mean, it says, hey, look, this is, you know, you're going to get call fatigue because you've got calls lined up for three hours in a row. You need to separate that. This sounds like a low priority task. This is a high priority task and it's amazing. So I think it's really just getting the team over the fear of AI and any fear. It's like, look, as long as you're willing to evolve, AI is not taking your job as a revenue strategist. It's going to take the things that you don't need to be doing and make you a better revenue strategist at the end of the day. So please get in and play with the AI and start to use it in your day to day life, in your day to day functions. And you'll just get better at it as you play around with it. That's really what I've done. I mean, I've taken some training, but I'm the most effective I am. And kind of picking up new skills is like, is playing around with the prompts until I get it right. And they go, oh, there we go. That's exactly what I was looking for. I love it. And you realize how much time you save. It's so funny. I'll block out hours to do work on something and then I'll pop it through AI And I'm like, actually it's pretty good. I just need to tweak this a little bit. So this is crazy. Just save me two hours. Yeah, it's like, and now I can go do things I want to do. Thinking, you know, using my brain. As you mentioned a Commercial strategist is. That is a skill set that you develop over time. And it requires intuition and inquires knowing the market and inquires way more beyond AI so marrying those two together can get really interesting. So my final question for you. If you could give one piece of advice to a young revenue leader entering hospitality today, what would it be? Yes, I'll probably bend the rule a little bit here on just one, but, you know, I think first off, I'd say if you want to enter the hospitality industry today, no matter what your role, have a true passion for being in the industry, because you love hospitality, you love and you have a passion and career for creating experiences. Because no matter what our title is or role is in the industry, hospitality of the day is about creating experiences. And that's whether it's in a booking process or while they're at the hotel. But that's what we're all about. So make sure you love what you do and kind of start out keeping a high level, work with good people and have fun. I see more and more, I think we get away from what the core of the hospitality industry is, and it's about people. It's about creating experience for people. So you want to be a part of that. So as a revenue leader, make sure you embrace that before you do anything else. And then once you decide the hospitality industry is for you, you have to understand this industry is going to take you in a lot of different directions. So enjoy the ride, learn as much as you can in your current roles, and don't be in a hurry to jump to that next role and get your next promotion. It's all going to happen for you, but you really want to stay in the moment. Learn what you can in those moments, and that kind of experience will be priceless moving forward in your career. And you're going to look back and say, you know, I'm really glad I stayed with that one. It was a great experience, great time, I learned so much, and, you know, just make sure you enjoy the whole thing as you're working through it. That's great, Jeff. Thank you so much. Jeff, it's been a real pleasure. Thank you for joining me today. Thank you. Thank you for joining us on this episode of Hotel Moment. By Revinate. Our community of hoteliers is growing every week, and each guest we speak to is tackling industry challenges with the innovation and flexibility that our industry demands. If you enjoyed today's episode, don't forget to subscribe, rate and leave a review. And if you're listening on YouTube. Please like the video and subscribe for more content. For more information, head to Revinate.com HotelMomentPodcast until next time, keep innovating.