Viral Marketing Meets Hospitality Revenue Management in Cornell Roundtable

May 13, 2009

Contact:  Jennifer Macera, 607.255.3101, js372@cornell.edu

FOR IMMEDIATE RELEASE:
Viral Marketing Meets Hospitality Revenue Management in Cornell Roundtable

Key Issue: Can Hotel Revenue Management Maintain Brand Integrity and Also Capture Revenue?

Ithaca, NY, May 13, 2009 – The first ever "integration" of hospitality revenue management and marketing provoked wide-ranging discussions at the  Customer Management - The Integration of Revenue Management & Marketing Roundtable, presented by Cornell's Center for Hospitality Research. Participants agreed that the two disciplines should continue the dialogue to maximize effectiveness and efficiency of both functions. The roundtable, held in April 2009, was co-chaired by Cornell faculty members Chris K. Anderson and Lisa Klein Pearo.  

Although marketing and hospitality revenue management are both aimed at increasing patronage and revenue, the discussions were not without a certain level of tension. According to Pearo: "The issue that drew the most attention was the challenges involved in capturing all available revenue while at the same time possibly compromising brand integrity."

Other discussions focused on the issues relating to the emergence of new media and new media capabilities, including informal promotions through viral marketing. "Accountability is an increasingly important criterion in marketing efforts connected with new media," Pearo pointed out. "Participants agreed that the difficulty of measurement in any new medium should not be an obstacle to experimentation."

As Ashwin Kamlani, CEO of AboutAnywhere.com and a member of the hotel revenue management panel explained, "Social media are the new TV." The group debated the necessity of waiting for "trackability."

Expanding on the theme of what marketers can learn from users' web activities, Anderson explained the evolving roles of hospitality revenue management via online travel agents (OTAs), such as Expedia, Priceline, and Orbitz. "I am studying the value of incremental reservations created by listing on OTAs," Anderson said. "For instance, I have found lifts of 10 to 30 percent in total reservations from listing at Expedia (compared to periods when properties were not listing on Expedia)." Moreover, Tim Gordon, SVP of Hotels at Priceline.com, explained: "We have identified a recent increasing trend that hotels are becoming more favorable towards opaque pricing. We believe that this is driven by the economic situation."

Anderson added that opaque pricing, such as that used by Priceline.com, can be used to segment customers. "This can be done by simultaneously selling services at different prices to distinct customer segments, offering both regular prices and discounted opaque prices." Anderson teamed with Cornell professor and hotel revenue management panelist Rohit Verma to explain how customer value can be assessed using a technique known as discrete choice modeling, in which customers state their preferences for specific bundles of product attributes. "We can gain information on customer preferences by seeing how they react to offers from online travel agents," said Anderson. "Using data from Hotwire.com, for example, we can see how transaction data can be used to understand how customers choose their lodging and travel providers."

For more information about future roundtables at the Cornell School of Hotel Administration, please visit http://hotelschool.cornell.edu/research/chr/events/roundtables/.

About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center's 77 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly. To learn more about the center and its projects, visit www.chr.cornell.edu.

Center Senior Partners: American Airlines Admirals Club, General Growth Properties, Inc., job.travel, McDonald's USA, Philips Hospitality, Southern Wine and Spirits of America, Inc., Taj Hotels Resorts and Palaces, and TIG Global

Center Partners: AIG Global Real Estate Investment, Davis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan Hospitality Group, eCornell & Executive Education, Expedia, Inc., Four Seasons Hotels and Resorts, Fox Rothschild LLP, FX Real Estate and Entertainment, Inc., HVS, InterContinental Hotels Group, Jumeirah Group, LRP Publications, Marriott International, Inc., Marsh's Hospitality Practice, Mobil Travel Guide, Inc., PricewaterhouseCoopers, Proskauer Rose LLP, SAS, Smith Travel Research, SynXis (a Sabre Holdings Corporation), Thayer Lodging Group, Thompson Hotels, Travelport, WATG, and WhiteSand Consulting

Center Friends: 4Hoteliers.com . American Tescor, LLC . Argyle Executive Forum . Caribbean Hotel and Restaurant Buyers Guide . Cody Kramer Imports . Cruise Industry News . DK Shifflet & Associates . ehotelier.com . EyeforTravel . Gerencia de Hoteles & Restaurantes . Global Hospitality Resources . Hospitality Financial and Technology Professionals (HFTP) . hospitalityInside.com . hospitalitynet.org . Hospitality Technology Magazine . Hotel Asia Pacific . Hotel China . HotelExecutive.com . Hotel Interactive . Hotel Resource . HotelWorld Network . International CHRIE . International Hotel Conference . International Society of Hospitality Consultants (ISHC) . iPerceptions . Lodging Hospitality . Lodging Magazine . Milestone Internet Marketing . MindFolio . Parasol . PhoCusWright, Inc. . PKF Hospitality Research . The Resort Trades .  RealShare Hotel Investment & Finance Summit . Resort+Recreation Magazine . RestaurantEdge.com . Shibata Publishing Co. . Synovate . The Lodging Conference . TravelCLICK . UniFocus . WageWatch, Inc. . WIWIH.COM