- October 29, 2015
- October 29, 2015
- October 26, 2015
“Revenue management conferences can be inherently dull,” said a half-joking Greg Cross during his Hotels, Rock and Roll and Real Estate keynote at the 2013 Apartment Revenue Management Conference. As a 30-year hotel industry veteran, Cross is responsible for maximizing Hyatt's guest room sales strategy for more than 500 hotels, and also boasts experience at Live Nation Entertainment, where he researched & recommended ticket prices for rock concert tours and created the functional requirements for a dynamic ticket pricing strategy. “So everyone thinks that Live Nation is the sexiest part of my career,” Cross continued. “But there’s nothing sexy about revenue management wherever you are. Jay Z and Prince would come into the office and walk right by me.”
And yet Cross wowed conference attendees with a penetrating and often humorous insider’s look into revenue optimization for rock concerts and the re-emergence of the hotel industry from the “lost decade” of occupancy and price erosion following the Great Recession. “You cannot set aside supply and demand no matter what business you are in,” Cross said. “And furthermore you have to establish correct market-based pricing in all environments.”
In particular, Cross detailed how industries often take a brand-centric approach during the absence of demand in order to differentiate their services from consumer-perceived commoditization of a market. “In our business you want to avoid being seen as a commodity, even though most of our customers are brand agnostic,” Cross said. “In the absence of demand, hotel owners look to steal share from competitors, but the truth is we have to appeal to brand loyal and brand agnostic customers and find pricing strategies that appeal to both.”
Those strategies include continuing to embrace the double-edged sword of discounted price and marketing channels in order to dump unsellable inventory. “You can tell a Priceline customer when they walk through the door because they are wearing flip flops and carrying a cooler,” Cross said. “But implementing some disposable inventory channels is likely necessary. It’s marking down tomatoes in the grocery store just to keep them from sitting on the shelf and spoiling.”
Cross also addressed several multifamily pricing challenges—the use of social media and pricing based on emotion—and shared that such challenges are encountered in other industries. On the social media side, his estimation of the number of leads converting into stays because of the use of Facebook was in the single digits, and he detailed a recent tour by Pink Floyd front-man Roger Waters that lost over $10 million in ticket sales due to concerns over fan loyalty and optimized price rejections by Waters himself.
Still, Cross believes in a revenue management future where people and processes trump calculations and computers, and also envisioned markets that are more brand-sensitive and brand loyal than they might be now. “Predictive technology is very much related to the development of the Internet, but you really do want a room full of smartest people controlling things, because the technology itself is directional at best,” Cross said. “Just remember that revenue management itself was originally seen as intrusive, but it was not a challenge, it was a gift.”
This information was presented at the 2013 Apartment Revenue Management Conference.
Learn about the perks and benefits of working in residential property management and some of the reasons the industry provides career growth, stability and endless opportunities.