Tourism | Hotel operators need revenue management strategy

Drew Rosser

Despite the steady growth of the region’s hotel occupancy rates, an expert has highlighted that local gaming operators and hotels still need to learn strategies to manage and maximize revenue.

Speaking at the Pata Asia Travel Association Travel Mart (PTM) Talks last week, Drew Rosser, vice president of Sales at SHR, said that the casino revenue model has changed, with  younger “experience-centric” travelers playing a significant part in fueling this global trend.

While the shift has been seen already in the US gambling meccas, Rosser said that it has yet to be seen in Macau, highlighting that the city needs to maximize hotel revenues throughout an entire year.

Although the room-centric casino revenue model is here to stay, the expert noted that the region needs “new thinking,” pointing out new solutions such as the use of the latest hotel distribution and booking technology.

Rosser also noticed local hotels’ internet booking systems are “fairly simple” in terms of what they offer to consumers, compared to Las Vegas.

“If you look at hotel websites of hotels in Las Vegas, not just the website but internet booking engine, it’s more complex in terms of rates [and services],” Rosser said, adding that it is a strategy Las Vegas has adopted for several years.

Meanwhile, the expert suggested that hotel operators have a different mindset when it comes to managing their revenues and rates, implying that these operators are even giving rooms as rewards.

“It’s something that traditionally has not been done. Since they were effectively giving rooms away and not charging for the rooms, to have a revenue management strategy is a different way of running a hotel,” he explained.

According to Rosser, they had meetings with hotel operators and only a few admitted that they are starting to think about revenue management strategy, as some still do not have revenue managers or staff.

The speaker proposed that hotel booking websites should provide add-on services for a small fee, which range from airport pick-up services to accepting commodity requests.

In Las Vegas’ hotels, additional fees such as checking in and out late are also added, which according to the expert are the two biggest revenue generators.

Rosser also highlighted that Macau should mark itself as a destination for entertainment, rather than just gaming.

“From what we’re seeing as we’re talking to hotels, that is exactly what they’re starting to do; trying to establish themselves as a destination for entertainment and not just for gaming,” he said.

“In Vegas, the entertainment side is much more in-your-face, there are huge signs, lights, advertisements, [and] they bring in very large entertainment,” said Rosser.

Questioned whether the city still attracts Chinese gamblers, the speaker said that they have seen a decline not just in the flow of Chinese tourists but also their spending – which he supposed was due to the restrictions on money outflows.

PATA’s forum and talks have stressed the importance of data collection and analysis to provide ‘savvy travelers’ more personalized offerings.

In targeting millennial travelers, Rosser stressed that they are much more interested in experiences, concentrating on the city’s entertainment scene rather than participating in gambling activities. 

Although efforts still have to be made, hotels should also focus on data and business intelligence to collect information based on customer activity in hotels.

In a separate talk, PATA’s CEO Mario Hardy noted that businesses are experiencing shifting trends in a much faster way, stressing that service operators also have to adapt accordingly.

“It is changing and what [Macau] can do and is doing to a certain degree, and probably will do more in some areas, is that it’s got all the facilities for organizing concerts and live shows,” he said.

“The physical capacity here is much greater. If you look at Vegas, they constantly bring big celebrities and shows,” Hardy added.

He also commented that Macau still has room for growth and can diversify its entertainment products and offerings, which would attract people to come for specific shows.