Cornell and SAS Webcast Focuses on Strategies for Lodging and Gaming Industry

Although the hospitality and gaming industries continue to struggle with the effects of recession, the time is now to address strategies for bringing back customers and addressing pricing issues. Panelists focused on the industry's top issues in the newest SAS and Cornell Center for Hospitality Research (CHR) webcast, "The Things that Matter Most: The hottest trends and biggest issues for hospitality and gaming industries".

Although recovery from recession was a hot topic, webcast participants wanted to get past recession concerns and focus on strategies for the next decade. The webcast offered a mixed media approach of prerecorded commentaries and live discussions among the panelists. This is the last webcast in the first series offered jointly by SAS and the CHR. All seven webcasts are available at no charge at http://www.hotelschool.cornell.edu/research/chr/events/webcasts/.

Still feeling the effects of recession, industry practitioners are working on strategies to improve revenues. Much of that recovery will involve efforts to manage price discounting. James Ruttley, VP of client services of IDeaS, pointed out that the issues with discounting involve not only how much discount to offer, but how to discount and who will see a particular discount. Marco Benvenuti, executive director of enterprise strategy, Wynn Las Vegas, agreed: "You have to be strategic about rate."

On balance, discounting didn't help the industry bring in revenue, noted Duane Vinson, VP of STR. "Discounting of transient room rates affects contract and group rates in ways you might not want to see," he explained. "As the economy improves STR is tracking a slow recovery in transient room rates; however, group rates will be slower in coming back and it could potentially take several years. It took the hotel industry about six years for rates to recover from the last recession."

In that regard, Radhika Kulkarni, VP of advanced analysis, SAS, warned of the dangers of untargeted discounting. Instead, she suggested paying attention to the services and features that add value. "Analytics is valuable for this purpose," she added, "because you can collect information about customers and note all sources of revenue." Kulkarni further stressed the need for the revenue management group to work closely with the marketing group to ensure that the right discount is offered to the right client at the right time and place.

Picking up on the theme of adding value and acknowledging that existing customers were affected by the recession, Dave Norton, SVP of Harrah's Entertainment, suggested that his firm is working on attracting a broader set of customers. Resorts and vacation ownership firms are also taking similar value-adding approaches, suggested Mylene Young, corporate director of revenue, Sonesta Hotels. For Wyndham Exchange, Jeremy Ten Bush, VP of global analytics, specified that this means enhancing and extending value through the membership process and improving customer interactions at every possible point.

Although the recent recession cast a long shadow, webcast panelists looked forward as they cited the top issues for the industry. "Even as hotels anticipate a recovery, they must address operating costs," said Cathy Enz, Lewis G. Schaeneman, Jr. Professor of Innovation and Dynamic Management. "We see these human resource issues resurfacing as top concerns: retention, training, and motivation. Immigration laws will come to the fore in many nations. At the same time, a big question is the role of the U.S. government in business."

Looking at human resources issues, Vinson suggested watching employment. "As employment improves, we'll see most of the hiring in the service sector. This will create new opportunities for training. As personal income improves, we'll finally see larger booking windows," he said.

Ruttley suggested that need for proactive revenue management in hotels will remain critical—a fact that now seems to be widely acknowledged in the hotel industry right up to the level of hotel owners. "As in any industry, hotels have to deal with labor turnover," he said. "Whereas in the past a property may have considered it acceptable to go without a revenue manager for a while, this increasing realization that revenue management is a 'mission critical' activity has had an additional impact. Hotels are becoming more amenable to fulfilling their needs with outsourced revenue management, and in an increasing number of cases, this means covering an ongoing longer arrangement for the provision of revenue management services."

Kulkarni pointed to another technical issue, namely, how to use new techniques, such as identifying the key opinion leaders in social networking, and how to find and connect people.

To see this and other webcasts in the SAS and CHR series, visit http://www.hotelschool.cornell.edu/research/chr/events/webcasts/.