Hotel ICON Raises the Bar by Eliminating the BAR: Exploring Contextualized Open Pricing
At the Hotel Chisinau in the capital of Moldova, the room rate is painted boldly on the wall behind the receptionist. Not exactly set in stone, but enough to deter discount-seekers. In Moldova, revenue management starts and ends with the cashier. Then at the other end of the scale there is the Hotel ICON in Hong Kong.
“The hotel market in Asia has continued becoming more competitive, with a crowded field of international brands and pricing pressures from outside the industry. As a teaching hotel, Hotel ICON is very excited to partner with Duetto to experiment with open and contextual pricing.”
“We experiment and use Hotel ICON as a laboratory around the discipline of Revenue Strategy. We share our findings to help hoteliers enhance profits and performance and, ultimately, improve our guests’ hotel experience; as a research hotel we have the unique advantage of being able to experiment with different strategies.”
Right now, revenue strategy is one of the areas where Hotel ICON is experimenting, having implemented the Duetto Revenue Management System to work with the hotel’s own booking engine to offer personalized pricing.
“Our platform is experimenting with Duetto RMS to allow us to offer personalized experiences and bespoke contextual pricing that increases the conversion rates for direct bookings,” said Richard. “With Duetto’s open pricing application we hope to provide the unprecedented ability to match the traveler’s needs in context, and to provide the right price and content to the right guest at the right time, as a completely personalized offer that increases conversion and revenue.”
“When I opened Hotel ICON six years ago, it provided the Revenue Department and the Sales and Marketing team with an opportunity to experiment with our own business and learn how to optimize the decision-making process around pricing and distribution strategies. Today, we are looking closely at the idea of contextual personalization and providing smart ways to drive greater guest loyalty, yield, and profitability,” he added.
This is certainly an important area to investigate, given the industry development trends such as the consolidation of OTAs and the blurring of lines between online distributors and metasearch players which have made it increasingly difficult for hoteliers to tackle distribution complexities.
“First, I believe in a holistic or more integrated revenue strategy, converging marketing and technology in order to maximize profit,” said Richard. “This approach needs to bring together sales, marketing, revenue management, and all other revenue-generating functions to drive net RevPAR growth and improve profitability.”
“As new data become available and integrated into revenue management technology, marketers should explore strategically targeting guests with personalized pricing and customer experiences. Guest acquisition costs keep rising, so driving direct bookings and personalizing guest experiences is becoming a bigger priority.”
The shift towards increased data usage in revenue management is something common to many industries today, but it is essential for hoteliers to get the personalization element right, as Richard points out.
“The idea is that search, planning and discovery are NOT the hassles before the experience, but are actually integral to the experience,” he explained. “That’s why I implemented ‘ICON ENGAGE’ – the interplay between technology and highly trained humans.”
“We communicate bespoke rewards and pricing for ‘book direct’. It’s integrated with our revenue management technology, enabling GRO and the Revenue/Marketing teams to strategize and target travelers with personalized messaging and personalized experiences – providing value from interacting with the hotel directly, and increasing their engagement and loyalty.”
Whether contextualized open pricing can bring significant improvements for hoteliers is something Hotel ICON will be in a position to report back on in the future, but Richard was confident that there are some immediate advantages which definitely offer an improvement over the old ways. “Travelers want real rewards for their loyalty; gimmicks and unusable points will only breed resentment and disloyalty,” he stated. Perhaps open pricing can help give both travelers and hoteliers what they really want.