A commercial system is a new category that collects and stores all information needed for commercial work in a hotel. The commercial team performs their job in the same system to maximize collaboration and optimize revenue. The commercial system is the backbone of hotel management.
The homegrown system
The category might not be so new after all. Every hotel already has a commercial system. It is that homegrown system that consists of several different pieces of software and often Excel in the middle as a tool for analysis and reporting. It works as long as there are no changes or developments of the software, the customized Excel sheets, and the skilled people working in this environment. The cost of operating this homegrown setup is unknown since it is a mix of labor costs, fees, and expenses. If it breaks down, it will cost a fortune to restore. In addition, it is challenging and problematic when skilled people leave and are hard to replace after the pandemic. However, the cost to repair and recruit is a fraction of the loss of revenue when systems do not work correctly or when no one is there to do the job. This patchwork is still preferred in many hotels because hotels are reluctant to change as long as something works and the cost is not transparent.
The new commercial system
Instead of building and maintaining your commercial system in-house, it is time to rethink and buy an easy-to-use commercial system made for hotels with basic functionality for marketing, sales, and revenue. Whether the hotel is part of a mega-chain, affiliation, or independent, every hotel needs its solid base for commercial work that generates revenue.
A new set of functionality
The new commercial systems are cloud-based, with modern development tools, high security, and openness to enable the import and export of information. In addition, the system design guarantees continuous future development and functions as a hub for all data needed in a hotel. By combining marketing, sales, and revenue data, the commercial team can get better insights and make better decisions than when each role works in a silo. A commercial system has broad and essential functions such as BI tools, sales CRM, forecasting, benchmarking, rate shopping, reporting, and other vital tasks for commercial work. However, a commercial system does not have as deep functionality as specialist systems., but a well-designed commercial system can easily integrate the more advanced systems for hotels that are very complex to operate.
A new business model
Total revenue will be significant if the hotel correctly manages the commercial team and system. The system is the oil in the machinery and enables revenue growth and optimization. The old business models do not work anymore, such as paying per user or a fixed monthly fee. Instead, the new business models are revenue-share-based or performance-based. The vendor makes money when the system delivers and as long as the hotel is happy. During crises, like the pandemic, closures, or low season the fees are lower, and when the hotel is successful, the fees are slightly higher. The new business model is a win-win for both parties. The total cost of ownership is lower than the cost of a homegrown system developed in-house.
Hotels are late adopters
Research by McKinsey of digitalization in different industries a couple of years ago places hotels third from the bottom. The study proves that hotels and also vendors to the hotel industry are late adopters. One example from the day-to-day life in hotels is that the check-in procedure and the design of the guest folio are the same today as it was 40 years ago. If the pressure for change is low, hotels will not change. In the aftermath of the pandemic, hotels will have difficulties finding skilled people for commercial roles, so there is an immediate need to compensate for the lack of available manpower with easy-to-use systems. A younger smartphone generation will not accept to work in old proprietary complex systems that take a lifetime to master. The only way forward to regain profitability is to redesign and follow updated processes, work in teams instead of silos and invest in systems that maximize productivity in a less educated and skilled newly recruited workforce.
