Next Gen in Lodging guest shares key strategies
Hotels continue to fight shrinking profit margins, but one hotelier is applying his own tried-and-true methods to help hotel owners grow revenue while cutting costs.
On the recent episode of the “Next Gen in Lodging” podcast, Bruce Jordan joined host Davonne Reaves to discuss some of his recent work growing margins for hoteliers. Jordan, who calls himself “the Michael Jordan of hotels,” is the managing partner of Hotel Guest Management, an Orlando-based hotel consultancy firm.
On the show, Jordan gave the example of how he was able to help a property in the Virgin Islands save $500,000 a year.
“I was looking through the expenses. I’m like, ‘You don’t need this, you don’t need this. … I was able to get their marketing structure where they were saving $80,000 in [online travel agency] fees,” he said. “So, once I took over their marketing, I took over their ads, I took over their social media, and I took over their revenue management. Everything just came together. They received about a 20% increase in revenue.”
Cutting costs is not the only way to go about growing margins for hotels, and Jordan made the comparison to someone who lost their job — they wouldn’t immediately cut every single expense. Instead, they would focus on getting a new job as their top priority.
“When your business is losing revenue, you need to address that issue first, not cut everything down. So, when the revenue comes back, [and] you cut everything down, you can’t service the client,” he said. “Focus on replacing the business that you lost first before you do anything.”
As artificial intelligence tools continue to rise in popularity amid hoteliers who want to cut costs, Jordan reminded listeners that AI is not a revenue manager — it’s a tool to help facilitate revenue management.
“There are a lot of tools out here that can help you manage revenue management for your hotel,” he said. “Manage — not do it for you, but manage it so you make decisions faster. But never trust AI 100% completely because it just doesn’t understand the demand the way you’re going to.”
However, the hotel industry has plenty of opportunity to improve its technology and marketing, or else hotels are going to continue to lose market share to companies such as Airbnb and Expedia, which are actively spending on these things, Jordan said.
“Airbnb — they don’t beat us on service. They beat us on technology,” he said. “They’re not using 40-year-old systems talking about, ‘Hey, we’re gonna make it work.’ It’s a little different. That’s how they beat us. They they out-market us.”
By: Natalie Harms / CoStar News
News | Hotel expert emphasizes importance of tech, marketing while growing profit margins