HotStats is helping hotel leaders shift beyond single metrics toward operating models built for profitability and efficiency. Through its Revenue & Profit Operating System and enhanced data tools, HotStats helps enable smarter decision-making and stronger commercial performance. As the industry evolves, so too must how success is defined.
We recently caught up with Michael Grove, CEO of HotStats at Duetto to discuss the latest trends in the industry.
Hospitality Investor: What are you most focused on building right now as a leadership team?
Michael Grove: The central product focus right now for Duetto and HotStats is the Revenue & Profit Operating system (RP-OS). A suite of tools that not only optimise for profit, but make a hotelier's daily tasks and decision making easier. Starting with looking at the right information, levers that action and the right level of automation layered over the top to drive efficiency and sophistication to operating a hotel, which optimises productivity, commercial strategy and ultimately profitability and real estate value.
We also continue to develop our data products, improving forecast capability and benchmarking capabilities to support owners and operators as well as investors, banks and the other stakeholders.
Hospitality Investor: What are some of the biggest challenges when it comes to cost management and how are they impacting profitability?
Michael Grove: This is a wide-ranging topic for hotels, in particular, varies by region. The hotel operating structures have changed a lot over the last 20 years, often now running on minimal staffing and an ongoing review of the cost lines. With the introduction of AI, we anticipate the ability to drive further productivity and cost control, but there is a reality that we have headwinds from a cost perspective that we are navigating as an industry. Higher fuel prices for instance. Impacting the cost of energy in general, but also supply costs, transportation, laundry, all are impacted by this. Labor has also continued to be a challenge with the emergence of remote working in competitive roles in other industries as well as cost inflation in salaries and wages. Guests are also booking online, using credit and loyalty cards, all of which come at a cost to a hotel.
All of this said, cost management is only one side of the coin for impact on profits. Guests are spending more and driving top line growth. This is often the best option for offsetting these headwinds.
Hospitality Investor: How are F&B and ancillary revenues contributing to total profitability versus pre-pandemic levels?
Michael Grove: This very much varies by region, but in general guest ancillary spend has continued to grow faster than room rates, helping to drive total revenue growth above and beyond the room rate growth that has slowed globally over recent years. This has also contributed positively to offset some of the cost inflation and expense headwinds the industry has experienced since the pandemic. That said, there is no doubt that the industry can do a lot more to drive ancillary spend through personalisation, technology and creativity.
Hospitality Investor: What’s the single biggest misconception about hotel performance data among investors?
Michael Grove: Probably the reliance on RevPAR as the sole indicator. It is understandable, hotels’ main revenue stream is room sales, the metric is simple and consistent and globally available. However, due to the ever growing complexity of hotel models, the ability to drive value has changed. The incremental cost of revenue varies by revenue stream and guest habits have changed. To measure opportunities and success, the whole business model can and should be assessed, RevPAR simply does not give the full picture.