Intro- 00:00:04: Welcome to the Lodge Second podcast introduced by Revinate. The podcast the place we talk about how lodge expertise shapes each second of the hotelier’s expertise. This podcast is hosted by Karen Stevens, Chief Advertising Officer of Revinate, and he or she is joined by leaders within the hospitality trade. Tune in as we discover the cutting-edge expertise remodeling the hospitality trade and listen to from specialists and visionaries shaping the way forward for visitor experiences. Whether or not you’re a hotelier or a tech fanatic, you’re in the precise place. Let’s dive in and uncover how we are able to elevate the artwork of hospitality collectively.
Karen Stephens – 00:00:46: Hiya, and welcome to the Lodge Second podcast. I’m your host, Karen Stephens, the Chief Advertising Officer of Revinate. On right now’s episode, we’re thrilled to have Joe Pettigrew, a seasoned industrial chief within the hospitality trade, at present serving because the Chief Business Officer at EOS Hospitality. With over 15 years of expertise, Joe has held key roles at distinguished organizations, together with Starwood Capital, ShoreRock Group, and Principal Inns. His experience spans model administration, asset administration, and income maximization, the place he has pioneered methods to drive operational excellence and profitability throughout various lodge portfolios. Joe is acknowledged for his modern approaches to enhancing income streams, and he’s right here right now to share his priceless insights. Welcome to the present, Joe.
Joe Pettigrew- 00:01:30: Thanks very a lot, Karen. Thanks for having me.
Karen Stephens – 00:01:33: It’s a pleasure. So I wished to start out off. Let’s discuss a bit of bit about EOS Hospitality. I do know you simply came to visit to EOS from Starwood Capital Group, however are you able to give us type of the ten,000 foot view of what’s EOS? What does the portfolio seem like?
Joe Pettigrew- 00:01:47:EOS is definitely most likely one of many quickest rising, if not the quickest rising lodge funding firm within the US right now, within the final 4 or 5 years for certain. And since it has a completely built-in administration platform referred to as EOS Hospitality, And so it’s on a very nice trajectory for supercharged development. Many of the accommodations that we handle right now are distinctive and particular person accommodations with nice character and wonderful areas. So all of them are usually unbiased properties, the overwhelming majority of them, which is absolutely type of what attracted me to affix the corporate as I’m really very, very new right here myself.
Karen Stephens – 00:02:39: That’s wonderful. So that you mentioned one thing there. I imply, I feel all people is aware of what a administration firm is, clearly, however you mentioned an built-in expertise administration platform. Are you able to discuss a bit of bit about that? So are you saying that there’s a tech stack that type of goes all through the accommodations or what did you imply by that one?
Joe Pettigrew- 00:02:55: I meant to say built-in administration platform, which means only a administration firm that manages each lodge that EOS owns.
Karen Stephens – 00:03:04: Received it. So the asset firm and the administration firm are the identical entity.
Joe Pettigrew- 00:03:08: Technically two entities, however actually the identical firm. Yeah, led by the identical founder.
Karen Stephens – 00:03:13: Superior. Okay, that’s nice. Yeah, I’ll say EOS is one in all our prospects, and we’ve labored with you for some time and we completely love the portfolio. I feel what’s attention-grabbing is that when you have got that range and independence, it’s like you possibly can have a typical administration framework, however the entire manufacturers are a bit totally different. In order that’s thrilling, I’m certain.
Joe Pettigrew- 00:03:32: Undoubtedly. And actually probably the most thrilling half about it’s, I imply, as you already know, the lodge trade is so fragmented between possession, model, and administration. And lots of the inefficiencies and difficulties that all of us affiliate with working within the hospitality trade, lots of that form of go away as a result of there’s a full alignment between the possession, model, and administration, particularly while you run lots of unbiased accommodations — we don’t actually have manufacturers to take care of. So that’s the actual bonus when you have got that absolutely built-in construction.
Karen Stephens – 00:04:04: That may be very thrilling. So I wished to speak about industrial technique right here for a second as a result of I really feel like industrial technique has been round for some time. I simply had a visitor on the podcast, Jennifer Hill from Kalibri Labs, who mentioned it’s an “evolution, not a revolution.” So lots of people have been doing industrial technique for some time, but it surely appears to be getting increasingly more focus. We simply had HSMAI that occurred this week, the place the main target is absolutely on industrial technique. However it’s one thing that you simply’ve been doing, I do know, for a very long time. Your strategy — I’ve seen lots of talks. Are you able to simply give the best stage view of what industrial technique is and the way it impacts hospitality?
Joe Pettigrew- 00:04:45: Yeah, and I feel the best way it occurred, I’m certain all people has their very own definition and model of what they consider once they say industrial technique. For me, it was born out of only a pure necessity that I used to be working in a Starwood Capital Group as one of many largest lodge possession teams on the earth, however not managing any of the accommodations ourselves. That, we had so as to add worth by by working with third-party administration corporations for many of the accommodations that we personal, that I wanted to provide you with what I’d name a industrial technique to basically transfer the parents which might be managing our properties into one route. And that one route being crucial, form of the North Star, if you’ll, to really transfer the needle on the lodge there. And a easy one-liner explains that to ensure that this lodge to really outperform our present anticipated efficiency, the lodge must do X. And that X is broad sufficient the place it touches operations, income administration, gross sales, and advertising. However then if everybody understands the purpose is that this one sentence, clear goal, easy to grasp imaginative and prescient, then it forces everybody to realign what they’re doing and the way they’re excited about their very own pricing methods and even visitor service methods and out-of-order upkeep, the whole lot to be aligned with that North Star. And since it doesn’t have the luxurious of managing particular person industrial leaders on a day-to-day foundation, sitting on the asset administration aspect, that I needed to form of develop the only strategy to ship. Right here is the chance. Our imaginative and prescient must be executing on these items. Now this turns into the imaginative and prescient. Everyone, we have to create our personal sub-strategies and ways as a way to ship on that. And in order that grew to become the industrial technique solely as a result of it needed to be one thing that each division needed to take part in, not simply income.
Karen Stephens – 00:06:52: And I feel that that’s what I like about it a lot, as a result of I feel historically, as you talked about, your gross sales group has sure targets, your income supervisor has sure targets, and f all people will get in line, whether or not it’s transferring the needle on internet working revenue or ensuring you get the precise channel combine while you’re speaking about the way you’re approaching visitor…And I’ve seen you do some talks on that as nicely. So that’s actually attention-grabbing. And I feel for our listeners — lots of our listeners are entrepreneurs inside a lodge, they’re income managers. I feel you carry such a novel perspective because the asset administration firm, because the possession firm. What you’re desirous about is ensuring that the asset itself will increase in worth. And if individuals can begin to perceive what strikes the needle there, it makes it loads simpler to get issues executed on the lodge. What I imply by that’s, if finances season’s coming round, if I can discuss to an proprietor with that lens, I’m going to be extra profitable.
Joe Pettigrew- 00:07:48: 100%. And for many of us who’re working within the lodge, so that’s principally anybody apart from the parents who work on the model aspect. However when you’re working within the lodge or as a part of the administration firm, otherwise you’re working as a part of the possession group, actually the one factor that ever issues in measuring the success of the lodge that you simply’re working in is the NOI. Nothing else issues. Loyalty share doesn’t matter. Direct reserving share doesn’t matter. What number of followers you have got on Instagram doesn’t matter. What number of emails — open fee, however none of that stuff really issues. The one factor that issues is the NOI. Now, as a way to enhance that NOI, all of these KPIs that I simply type of whittled on, all could have some impression in driving that NOI. However the magnitude of what every a type of issues make the largest impression shall be totally different for each lodge in several areas, relying on which model you have got and what sort of services you have got. And so you possibly can’t strategy any one in all these with a quite simple mindset of like, I imply, “Direct reserving share, you’re solely like 20%, I’m 40%.” That comparability just isn’t truthful when the one factor that actually issues is we have to simply maximize on the NOI. I all the time joke that I could make all of the OTAs go away. Like I could make a 100% direct reserving share by simply turning off all my OTAs and the whole lot, however your NOI will go down. And in order that’s a simple factor for me to attain. So when you focus a group on direct reserving share, individuals will do some unusual issues to ship on like KPI on the sacrifice of what the ultimate quantity seems like.
Karen Stephens – 00:09:25: So when you’re dumping your fee, so that you flip off the whole lot, you dump your fee to the ground so that you could get all of the enterprise immediately, that may not be the perfect technique.
Joe Pettigrew- 00:09:33: 100%. And/or simply flip off the entire OTAs. The one channel you possibly can ever ebook in your lodge is your personal web site, then I’ve the perfect direct reserving share on the earth, however that’s no —- that is probably not the precise factor or the perfect factor for the lodge’s total revenue.
Karen Stephens – 00:09:47: Proper. Effectively, let’s discuss a bit of bit about OTAs as a result of I noticed that you simply spent a while at Expedia. I spent a while at Travelocity. I’ll say for our listeners, each of these occasions had been fairly restricted and early in our careers. However bear in mind, I used to be there, really moved round loads. However anyway, backside line, when you concentrate on OTAs and the place that they’ve inside a lodge ebook of enterprise, how do you concentrate on the OTA? When is it good? When is it dangerous? And the way do you shift the share? As a result of we positively need to drive immediately. We’re not saying that. However what do you concentrate on it?
Joe Pettigrew- 00:10:16: So I positively assume that they’re a helpful accomplice in nearly each state of affairs. And the largest purpose why I feel that they’re a great accomplice most often is as a result of when you actually do a deep dive examine of the overlap of shoppers between who books immediately on their web site versus the purchasers which might be reserving on the OTAs. That overlap isn’t that sturdy. Like there’s not an amazing overlap there. And so the purchasers which might be reserving on the OTAs for you’re greater than doubtless not going to be diluting the bookings that you simply’re going to get immediately in your web site or in your voice. And so you need to deal with that as one other pool of a supply of demand that you already know exists that you know the way to make the most of finest relying on what you’re wanted. And so, for instance, I’m generalizing right here, however one of many nice issues about working at Starwood in my final position was that I started working with so many various manufacturers and so many various administration corporations — plenty of totally different asset courses. However typically talking, the OTAs all the time had a really quick reserving window, nearly throughout the board. So if you already know that that’s true and you already know what your profitability margin is for a short-term reserving versus a long-term reserving, then you possibly can actually leverage the OTAs to drive your NOI. And what I imply by that’s if I had been to promote a room at 100 {dollars} and I’ve a hundred-room lodge, the very first visitor that I ebook at 100 {dollars} has a unfavorable NOI as a result of I’ve a hard and fast value of the entrance desk workers and all of the admin basically and gross sales and advertising. I’ve all of the mounted value bases which might be inbuilt to service the primary visitor that books. The final visitor that books the one hundredth reserving that I get for 100 {dollars}, that one has nearly 60% circulate by as a result of all my mounted charges have already been paid for by the primary 50 bookings that I ebook. And so if the OTAs is the one that’s delivering me that final reserving at $100, then really the revenue margin on that’s a lot better than the direct reserving that I acquired for the very first reserving that I booked in. And so if you know the way you’re using the OTAs to come back in at what reserving window and what lead time and so forth, you may make it extremely worthwhile. And it doesn’t need to be the costly channel that everyone is so anxious about on a regular basis. Controversial assertion, I acknowledge.
Karen Stephens – 00:12:45: It’s. And I need to ensure that we put it in context as a result of I feel each channel has its goal and place. What you’re saying is, “Hey, if it’s essential prime off your lodge to fill these previous few rooms, okay. However the first few rooms, you need to just be sure you’re not paying an enormous fee on that.” And naturally, we all know that there’s reserving home windows far and wide. However I feel the best way that we give it some thought is Revinate is that when you perceive who your finest, most worthwhile friends are and once they ebook, and what they like, and the way you service them, then hopefully you possibly can fill lots of these rooms with repeat friends as a result of you already know their traits or you possibly can share knowledge throughout portfolios and remarket. So if Joe went and stayed on this lodge and likes to golf and eat sushi, that I’m going to market a second lodge within the portfolio that may goal Joe primarily based on that info. And that’s a direct reserving that’s clever. So I feel if I perceive what you’re saying, OTAs ought to be a praise. They need to be incremental friends that you simply wouldn’t in any other case get. After which that is smart. Is {that a} truthful assertion? I would like phrases in your mouth.
Joe Pettigrew- 00:13:48: That’s precisely proper. As a result of like I mentioned, the primary bookings that you simply get, the price of service — then is much more costly. And in order that’s the place you need to deal with ensuring you get these friends on the least expensive value as doable. After which the nearer you get to your lodge getting full, that previous few rooms to prime up, these are your least expensive ones. And so you would be extra liberal about the place you’re getting that reserving from as a result of the revenue margin on that’s a lot larger.
Karen Stephens – 00:14:15: It’s a lot larger. So I feel it’s actually understanding, what are your segments? What are your reserving home windows? How are you advertising to these friends to be sure you get the repeat friends in? And do you have got methods at your lodge while you do have OTA friends that are available to just be sure you get the e-mail or what are your methods or what are your recommendation for individuals on property? To transform that OTA friends, as soon as they get there.
Joe Pettigrew- 00:14:38: I’m certain you’ve heard of each tactic on the earth. You get a card at checkout or come again for 20-30% off or a few of these different issues. The one factor that I’ve discovered fairly efficient and one in all my favourite ways on that’s really discovering out who the repeat prospects are that ebook on the OTAs and discover out who they’re. After which you possibly can strategy these individuals proactively, whether or not that’s on arrival, in-stay, or perhaps even pre-arrival, that you simply attempt to get a few of these as a result of they’re clearly loyal to your lodge. They love the product. They love the service. They love your workers. However in some way, OTA is their most well-liked reserving platform. And so I feel that’s the space the place I’ve seen lots of success in simply making them really feel that further particular and truly making them perceive that, Hey, when you like us, while you ebook by a few of these OTAs, it does value us a bit of extra money. It could really assist us out when you did ebook immediately. And in return, we get much more details about you. And we are able to service you even higher while you come stick with us at this different lodge, which you haven’t stayed with us but. However while you go there, you’ll get the identical stage of service that you simply’re getting.” And I feel simply explaining these advantages and concentrating on those who’re already in love along with your lodge by reserving on OTAs, have been very efficient.
Karen Stephens – 00:16:00: Yeah, we are able to’t assume that our friends are within the lodge trade and perceive the distinction between reserving direct and reserving on an OTA. So that’s critically necessary. We clearly are linked into lots of PMS programs with our platform. And what we see is about 17% of a visitor database on common has visitor profiles with a number of OTA bookings. So we see that always. We have now a benchmark report, the place it seems in any respect of these accommodations, and you’ll see that knowledge. And what we advocate is following up with what we name a “win-back marketing campaign.” So when that visitor checks out, it’s like, “Hey, subsequent time ebook direct, we’ll provide you with a free drink.” You’ll be able to provide this. There’s lots of issues you are able to do there. However that’s completely the place the sneakiness will get in of the place the OTA could also be. You don’t need them coming again on an OTA channel.
Joe Pettigrew- 00:16:47: Yeah. And very often they’re there to do some type of enterprise. So having like a gross sales coordinator or someone reaching out to them to make them really feel much more particular. And you discover out he’s like a window cleaner within the space or one thing, you already know, and then you definately can provide them a negotiated break. Make them really feel much more particular. There’s simply plenty of issues you would do.
Karen Stephens – 00:17:03: You simply acquired to get your arms across the knowledge, which is absolutely necessary. And I’d like to shift gears a bit of bit. Talking about knowledge, you’ve spoken loads concerning the significance of particular person pricing and hyper-personalization that impression complete RevPAR. In order that’s one other new enjoyable factor that we’re speaking about. Not solely the room spend, however the ancillary spend round that. So how do you concentrate on that for accommodations, and the way are you capturing that knowledge to be sure you perceive the true worth of the visitor? What’s the significance there?
Joe Pettigrew- 00:17:30: I’ve to confess that I haven’t actually cracked this but. And I’m wondering if there’s one thing that you simply guys provide or anyone else presents that I’m not conscious of but. Primarily, we now have nice expertise to attribute each single contact level the visitor has ever had earlier than that individual makes a reserving, proper? And I feel the expertise that has developed a lot, and there’s plenty of nice assets on the market that may allow you to perceive what contact factors are driving what interplay and what’s nice for consciousness model and so forth and so forth. However that form of attribution type of stops the second the visitor makes a reserving. After which it doesn’t really comply with that visitor by till checkout after which for your complete life cycle of that visitor. So relying on what has been type of proven to the visitor, how we marketed, how that visitor booked, then what occurs on the spa with the F&B, with the golf and simply form of the whole lot else that you would do at your lodge. And that’s the one which I’d love to determine sooner or later, is how will we really do this higher simply as an trade basically? However actually for our accommodations.
Karen Stephens – 00:18:41: So, Joe, in your profession spanning numerous management roles, you’ve navigated by financial downturns and market shifts. What classes have you ever realized about resilience in income administration? And may you discuss how these classes can information hoteliers? So we got here out of COVID, which was fairly loopy interval. Now we’re all feeling good once more. However what sort of classes had been the teachings realized in navigating by that? How do you assist hoteliers type of shield themselves? Is there a manner to consider it or do you simply keep it up?
Joe Pettigrew- 00:19:09: Personally, for me, I feel the largest lesson was we have to do a much less of trying up to now to information our future reasonably than we have to begin simply taking a look at some extra indicators that may principally assist us look into the longer term with out like trying into the previous. So if you’re a income supervisor or only a hotelier basically, what we do rather well is after we forecast out into the longer term as we go. What did we do? What was our pickup within the final seven days? Or what did we choose up within the month for the month? What was our pickup like final 12 months at the moment? And we maintain trying in our again mirror to try to predict the longer term. However what occurred within the COVID is that issues had been transferring so shortly that when you had been trying within the again mirror to information your future, it was going to be completely incorrect as a result of issues had been going like this, after which issues are going like this once more. And so for about two, three years, when you’re trying within the back-mirror, you had been incorrect the entire two or three years, otherwise you simply don’t know when issues are going up. You assume issues are happening. And when issues are beginning to come down once more, you assume issues are going up since you’re taking a look at three, 4 months in the past when the traits are actually type of curving over. So I feel that’s actually the largest factor. And I do additionally, every time I communicate with expertise distributors, I ask them on a regular basis, notably with the income administration corporations or forecasting or finance-related corporations, that. “There should be some main indicators that we are able to take a look at to see how the demand is shaping out into the longer term?” I imply, the retail or different industries do a a lot better job of taking a look at cellular knowledge, motion, flight, variety of searches happening, occasions which might be occurring, individuals, what the emptiness fee is within the places of work, to what number of vehicles are passing by poles. I don’t know, there’s simply so a lot of these kinds of knowledge on the market that we don’t actually have a tendency to have a look at as a lot. And I can see now some corporations are beginning to develop a few of these applied sciences, and the accommodations are beginning to use them extra. However I’d say that that’s the largest lesson that I’ve realized, and that, curiously, in COVID-19, I really noticed this in actual time the place when the nation began to close down, I noticed this in real-time transferring from east to west. It began from China, then like Singapore, the whole lot shut down. After which it got here out to Italy and Europe. The accommodations had been shutting down and just like the demand was falling aside. And as all of these items are occurring, I’m telling our accommodations within the U.S., “Look, that is coming. Like it’s slowly however certainly transferring. And everybody over right here is in denial. However it hasn’t hit us but. So I don’t need to do something about it till it really hits us.” After which it did hit us — each single one. After which after some time, it went the opposite route. The U.S. began to open up the whole lot, and I might see the demand similar to beginning to come again from west to east. After which nobody in Europe wished to do something about it after seeing what’s happening within the U.S. , all these large booms in home journey and beachy drive-to resort vacation spot holidays. I imply, they had been all actually booming, and nobody was getting ready for that in Europe till you had been type of hit with it. So simply with the ability to put together for trying on the main indicators and looking out into the longer term and truly getting ready forward of time so that you could higher benefit from that when it does lastly arrive.
Karen Stephens – 00:22:40: Yeah, I feel that’s an amazing piece of recommendation. And while you had been speaking there, I used to be pondering it’s true that up till COVID, hospitality had been, you already know, we’re all the time a bit of slower than all people else. We’re very set in our methods. We have now our expertise stacks. We take a look at our numbers. We do the whole lot. , I take a look at my star stories. I do all my issues. And that actually type of disrupted the whole lot. And now as we’re transferring into this period, it’s like, “Yeah, go searching. What are different industries doing? What are the opposite methods that you could watch the traits?” And who would have thought that after the largest crash and the whole lot closed, then goes to the best ADRs we’ve ever seen — occupancy ranges by the roof, relying on the place your lodge was. So all bets are off. So I’ve another query so that you can shut out that’s type of alongside these strains. In order you survey the hospitality panorama proper now, the place do you assume accommodations are having their second or spark of innovation, particularly in terms of expertise? You talked about that you simply’re taking a look at totally different distributors, however are you seeing something type of that’s coming on the market that’s actually cool and attention-grabbing at this level?
Joe Pettigrew- 00:23:43: I don’t assume that is technology-related, though I feel it’s technology-enabled. I do see lots of corporations now actually specializing in visitor expertise as advertising. The place pre-COVID, every time we discuss advertising, it’s about consciousness. It’s about consideration. There’s a complete typical basic advertising funnel. And it’s about what we put in entrance of the friends and the way we get transformed higher and speaking about all these totally different theories for enhancing conversion and copywriting and all of these things. Whereas now, I feel lots of corporations are actually taking a look at buyer expertise being the principle differentiator and truly creating visitor advocacy reasonably than simply shopping for their loyalty from factors. I feel these items are the place lots of focus is. And positively, that’s the place our focus is at EOS proper now’s, actually simply specializing in buyer expertise — providing one thing distinctive and totally different stuffed with character and wonderful areas that prompts advocacy from the friends which have stayed with us. And I feel there’s nothing extra highly effective than phrase of mouth. And now that’s amplified by social media channels. And on the identical time, all of those conventional outbound advertising ways are form of changing into much less and fewer efficient. They usually’re actually tougher to deploy as nicely, proper? With all of the modifications occurring and cookies and laws, attempting to reinforce privateness. So I feel that’s one piece of innovation that I see, which is absolutely enhancing buyer expertise to be completely distinctive, memorable, that may immediate individuals to form of advocate in your behalf and unfold the phrase of mouth.
Karen Stephens – 00:25:29: Completely. Plenty of personalization, plenty of deal with the visitor expertise. I really like that. Effectively, thanks, Joe. We’ll go away it there. My visitor has been Joe Pettigrew from EOS Hospitality. Thanks a lot in your time right now.
Joe Pettigrew- 00:25:40: Thanks, Karen.
Outro – 00:25:46: Thanks for becoming a member of us on this episode of Lodge Second by Revinate. Our group of hoteliers is rising each week, and every visitor we communicate to is tackling trade challenges with the innovation and adaptability that our trade calls for. If you happen to loved right now’s episode, don’t neglect to subscribe, fee, and go away a evaluation. And when you’re listening on YouTube, please just like the video and subscribe for extra content material. For extra info, head to revinate.com/hotelmomentpodcast. Till subsequent time, maintain innovating.
