Sebastien Leitner
Welcome to The Turndown. We often talk about rate changes, dashboards, and distribution strategy. But today, we're cutting through the noise to talk about something more fundamental: relevance. My guest is Ally Northfield, the powerhouse Managing Director of Revenue by Design and the visionary behind the Global Revenue Forum. Ally works with hundreds of properties to sharpen commercial strategy, but she's not here to talk about business as usual. We're tackling the uncomfortable questions. How do you drive profitability? When booking patterns are fractured and guests are more hesitant than ever. As AI reshapes how the world searches for travel, are we prepared? Ally argues that the next generation of revenue requires a radical shift. We need to be more commercial, more communicative, and closer to the guests than ever before. We dive into the future of demand, the real cost of acquisition, and why the hospitality industry must rethink how it sells itself, not just to guests, but to the next generation of talent. This is a masterclass in modern commercial leadership. Let's get into it. Ally, it's a pleasure to have you on The Turndown. Welcome to the program!
Ally Northfield
Thank you. Thank you. I'm delighted to be here.
Sebastien Leitner
My opening question for anyone joining the program is typically what keeps you up at night these days or right now, Ally? What comes to mind?
Ally Northfield
So I think the main thing is just staying relevant in the bigger picture. In the shorter term, it would be remiss not to say that we're we're all dealing with a significant level of uncertainty. So, I think those are the two things right now that are right top of my agenda for three o'clock in the morning.
Sebastien Leitner
And uncertainty, is this travel outlook? Is the oil prices? Like, where is your head going at three o'clock?
Ally Northfield
Yeah, I think, you know, what's different about this level of uncertainty and the fact that it geopolitically motivated is really trying to understand what consumers will do with travel. Do I advise my clients in the UK, that's great, everybody's gonna stay at home. So it's gonna be a fab summer or is everybody gonna stop traveling anyway because nobody's got any money left? You know, these are the kinds of things, there are certain things which feel like they're difficult to interpret right now.
Sebastien Leitner
Okay. So you're in this period of uncertainty because you don't know yet. Like Yeah. We are roughly, you know, spring of 2026. This is peak booking season for the summer right now, it's about to start?
Ally Northfield
Yeah, it is. I mean, depending upon the type of asset that you're talking about, but typically, yes. I mean, people are starting to make holiday plans. And if I was being fair, I'd say that we're looking at a level of kind of like uncertainty in booking patterns as well, that people are slightly hesitant, sort of holding back a little bit just to try and make sure that they make the right decisions about what to do. So, yeah. And I tell you though, there's another thing actually. There's another thing that's for the UK traveler because now Europe has introduced this new fingerprint system. Sorry, this is gonna be really timely, isn't it? Is like really 2026. So now people are already dreading, kind of like the two-hour waits in queues whilst they get their fingerprints taken and they go through this new way of regulating the fact that from the UK, we can only spend ninety days in Europe at any one particular time. So, yeah.
Sebastien Leitner
Interesting. Interesting. The ninety so the I didn't think you were going to mention the ninety days. The fingerprint, etc, I witnessed this myself, I think about a week ago, when I was in Europe. And it was okay. Granted, I connected via Munich on my way to, where did I go, Sofia, Bulgaria. Okay. And it went extremely smoothly there. There was no wait times, but, Yeah. Yeah. For people who don't know Ally, what do you do, Ally?
Ally Northfield
So I am the managing director of Revenue by Design. And Revenue by Design provides hotel clients with fully managed outsourced services as a primary function, so revenue management outsource. And we have two other revenue streams that we work on. One is that we also provide online training in the form of a qualification for anybody who wants to be more relevant within this space and be more confident in communicating their skills in revenue management. And then finally, we also run the London version of the Global Revenue Forum, which is a big conference that's held from our side. It's held in January in London, Milan and Stockholm on the same day. And the aim of the Global Revenue Forum is to bring together the revenue management community. So that's what Revenue by Design does.
Sebastien Leitner
That's amazing. You're wearing so many hats and I could go in so many places right now. Describe your typical customer, if you will. So you're providing revenue management services to hotels that don't have a revenue management team. Is that fair? Is that a decent? What do the hotels look like? Or what's sort of the typical hotel?
Ally Northfield
A typical hotel for us would be sort of eighty to one hundred and twenty rooms, not necessarily super large, that realizes that it's more efficient to outsource the revenue function because you get a fully qualified revenue manager at an efficient pricing point. That said, we do actually operate hotels with more than a thousand rooms at times. It really depends on what the client needs at any one particular time. So we do scan right away across the board, typically the sweet spot would be between eighty and one hundred and twenty rooms.
Sebastien Leitner
That's amazing. It hasn't always been like this. Right? Like, management is still a fairly new, I guess, practice in hotels. Right? You always used to have reservation managers, or you used to have sales teams, etcetera. Did you get started in revenue management, Ally?
Ally Northfield
Was working in distribution and e-commerce before, so this is like a long time ago, I mean, last century, no last century, come on. Yeah. So, working in distribution and sort of like the emergence of the power of online travel agents, it became quite clear that actually, to be able to distribute effectively, there needed to be some level of pricing strategy and some thought process behind that distribution strategy. And revenue management really was just emerging in terms of it being mainstream hotel. And also, it was emerging in terms of the technology supporting that decision-making as well. So that's kind of how I got into it very early days. And with Revenue by Design, I jumped in with a colleague and we just started saying that we did revenue management and then we got some clients. It was great fun. It was a lot of fun, but that's how the company really started.
Sebastien Leitner
For someone who's not familiar with revenue management, how would you describe revenue management? Like, let's say somebody that is new to the industry or wants to get into the industry and is thinking, oh, this could be, you know, something for me. How would you describe revenue management in hotels?
Ally Northfield
For me, it's a series of business processes that you put in place which are related to market segmentation, the ideal customer, demand management and pricing. So, beneath all of those elements, quite a few business processes that when combined, actually work together to optimize the demand for a particular property at a specific price point. So the challenge that I find in terms of people's interpretation of revenue management is that they think it's, Oh heaven forbid, tweaking the pricing, which it's really not what revenue management is about at all. Mean, it is really about getting huge, being extremely efficient about the relevant business process that needs to be in place, which in turn, when done really well, will provide the hotel with a huge opportunity and to avoid leaving money on the table.
Sebastien Leitner
So it's not only setting the prices, it's not going up and down the prices, it's business processes, it is. Yeah, yes it is.
Ally Northfield
So it's, for example, having a hugely efficient reservations department that makes sure that every single reservation is entered into your property management system really cleanly, that customer is segmented. So you have an element of market segmentation. And when you have that, you can then direct pricing, differential pricing towards different market segments. That then starts to segment your market, which allows you to effectively differential pricing is providing a different price parameters for the same product. So selling a room at different prices to different segments at different times. And then understanding the market demand, the booking windows of each of those segments, and then fundamentally then forecasting that demand and ideally then applying a price to that forecast. So the pricing really is almost like the end game once all of the other elements are stacked up.
Sebastien Leitner
Interesting. So the pricing naturally happens from your perspective?
Ally Northfield
There's there's the economics of pricing which indicate that there's going to be a price point at which customers are willing to pay. There's also going to be a requirement of the asset to drive a certain price because they need to make a certain amount of money. And then there's also demand factors. So pricing isn't the last point, but I think it's probably a conclusion based on all of the other elements that you've put together in terms of the initial research, terms of that pricing strategy, which of course is gonna change. The pricing is gonna change. The strategy isn't necessarily need to change that much, but certainly, yeah, you've got to have that ability to understand so much about your market, the type of guests that's gonna book, why, when, and at what point and in which mode that guest is. You know, I can be a different type of guest depending on what my needs are at any one particular time, whether it's for a business trip, a leisure trip, just going out for a party, you know, those kind of things. So, yeah.
Sebastien Leitner
A lot of revenue management systems out there exist, right? I mean, there's probably hundreds of revenue management systems that claim that they can potentially replace the revenue manager on property. What do you say to that claim? Possible? Not possible?
Ally Northfield
I think that we are moving in a direction where revenue management systems can create significant efficiencies in terms of the data analysis that's required. You're seeing now a lot of revenue management systems proposing that agentic AI can produce scenarios whereby you have specific solutions that you can follow based on the data that they have. And I'm seeing as well, demands from owners asset, then the asset management community to drive those efficiencies through technology and automation. So for example, a lot of that community level, you'll have people asking questions like how many hotels can a revenue manager run at any one time? And that has changed like a significant amount in the last five years. So previously it would, I don't know, if you first looked at some of the brands managing revenue management, then it might be like three hotels and then it was five, then it was seven. Now it's not unusual for a revenue manager to be managing like ten hotels, fifteen hotels. Again, whether or not that level of detail that you might want is gonna be there. If you're managing fifteen hotels, it would mean that the technology has to be super efficient to basically help on that level. So I think the efficiencies in data management, but I think also that at the end of the day, you still need a human at the end of that line to effectively analyze what makes sense, redirect that technology. If you know something that technology doesn't, then clearly, you know, you still need that human in the loop.
Sebastien Leitner
Yeah. And then there are events, you know, like COVID, where suddenly fifty or sixty or seventy percent of your on the books reservations are canceled. And you don't really have a scenario, or you don't have a historic component to that. You almost need the human person. You almost do.
Ally Northfield
I think one of the things that which is quite interesting that has come out of things like COVID and this rapidly changing marketplaces over quite a sustained period of time. It's quite difficult to remember now, certainly in the UK, we had scenarios where different geographies were able to travel and other ones weren't. So you'd be in one region and you had to stay at home and you could be ten miles down the road and you could travel. And so revenue management systems had to learn to respond to that. And I have to say that there have been some success stories out of that, that relying significantly on past history is not necessarily the holy grail of a revenue management system anymore. Whereas it was previously, there was a lot of business rules and small algorithms that were built into revenue management systems, which very much relied on kind of like how did last Tuesday behave in comparison to a Tuesday of last year, which had similar demand characteristics. So there's significantly less reliance on that kind of data now, because in reality we live in a world that is changing significantly more quickly, irrespective of pandemics. You know, there are other things that happen, which mean that we have to pivot quite frequently on the strategies and the expectations and forecasts that we had.
Sebastien Leitner
So less reliance on historic data, more reliance on what? Like, is replacing the historic data, if you will?
Ally Northfield
The ability to evaluate what's actually happening right now, sort of the pace of demand changes, reservations pick up, that type of thing. So really looking at exactly what's happening within a window and then creating scenarios that makes sense based on the demand patterns that are coming in. So pretty much sort of working at the front of the curve rather than the back end of the curve. So the curve is still there in terms of the reservation space of arrival, demand patterns, maybe looking for similarities in demand patterns that perhaps we couldn't see previously. So just the way customers are behaving, the fact that lead times are changing quite significantly irrespective of the segment you're talking to. So, this type of thing, think systems are better able to manage because they're more powerful. They can chunk a lot more data more quickly than they could before.
Sebastien Leitner
You mentioned lead times, right? So, lead time is the time between booking and arrival, If you will. You've seen significant changes in lead time in all directions, or what do you see happening most of the time? Is it a shortening of lead time? Is it what what's happening? Typically, we are seeing a shortening of lead times definitely. Although you'll always find somebody that can come and give you some data that shows, well, lead times are getting longer and longer. And so there's loads more time to prepare. But in reality, think consumers in general are understanding that perhaps the old rules of deeper discounting towards the day of arrival are not quite so drastic. And so therefore they don't necessarily have to manage when they make a booking, but they can actually manage when they make a booking based on their own requirements rather than being driven by the industry to book early and save or the typical tour operator model, which was very much sort of dumping inventory just as a day of arrival approached. So it was quite confusing for guests at any one particular time. So you kind of like, you couldn't win whichever way you went. I think those kinds of like scenarios are changing, But certainly, and also I think that people are more impulsive than they used to be. And making decisions to last minute decisions to take their travel time. Travel is such an interesting industry because we're all travelers ourselves, right, in a way. We all have an opinion that is both, you know, supplier oriented or the hotelier oriented, but also the traveler oriented. One scenario that I struggle with myself as a traveler is I would book far in advance, meaning I would be happy to pay to book now for my next trip in June, in July, and in September. But oftentimes, I I'm not doing it because I'm not confident whether I'm actually travelling for those specific days, and Cancel policies have become extremely unflexible from a consumer perspective. Right? There's a lot of non refundable products out there, there's a lot of, you know, cancel policies that are, at least in some, you know, destinations, not very consumer friendly. And, you know, we all have limited travel budgets as as well. So I often end up booking two weeks before I I I travel to avoid change fees, cancel fees, etcetera, because they can Yeah. They can they can happen quite often. What do you say to that? Like, have we have we lost a little bit, I guess, the ability to be consumer centric, or do you consult your properties and always having flexibility as well alongside deeper discount and non refundable rates? Like, what what's the best practice here?
Ally Northfield
I'm reminded of a situation that we have at the moment in terms of current sort of client base. One client is servicing what we would call the uber high net worth individual. So very, very, very high end product. And on that basis, and it's also a quite a unique experience. And on that basis, people are prepared to pay upfront. And also it protects from the client perspective, it does protect the revenue that there's certainly a significant percentage of that stay is paid for upfront. For other hotels and other clients of ours that participate in a more competitive environment, then it is more competitive to offer more flexibility to the guests and to follow certainly from an OTA perspective to follow their directives, which is typically if you have flexible cancellation policies, then algorithms are more positively orientated towards those particular properties. So it's very much horses for courses, I think at the moment. And the strategy has to reflect that. We have one client that sits in the middle at the moment and they have a fully prepaid strategy and it's very challenging. It acts as a restriction. That is a restriction we use in revenue management. If you really want to, if you want to calm down a booking curve, like the rates of reservations arrival, because it's going too hot, Then you put in a restriction, which is like, okay, prepay bookings only, or length of stay restrictions, you know. And that would, that'll shut it down for you. You know, that will put the water on the fire. So it's, and it becomes very complex when if you get those wires crossed and don't understand exactly what you're doing and what that pricing strategy is doing in terms of how it's impacting customer behavior and customer decision making. It's also you have to think about the customer, you know, they if they're putting that money down upfront, they have to find that money before they travel. And often in our head psychologically, we're going to get the money when we travel, not before. So, you know, unless unless you're really good at budgeting, which I'm not. So, you know, I never have the money. So, yeah, yeah, yeah, yeah.
Sebastien Leitner
Interesting, interesting. What's the biggest I mean, you talk to hoteliers all day long. What's the biggest pressure hitting hotel margins right now?
Ally Northfield
I think the one that is pretty common across the entire industry is cost of employment, the cost of people. And certainly I'm talking to the UK market, which is where I'm at mainly, We have cost of employment as an issue and we have, so then that's reflected in increased taxes and an increase in the lowest wage that, or the lower wage brackets. So it is very challenging. And also we have cost of energy and cost of food. So actually everywhere it's just hitting the middle of the P&L. So that's not just people, it's very much just the operating environment as well, which is quite challenging. I'm seeing, for example, the first time rather than revenue directors and commercial directors being charged with KPI driven targets, monetary or numerically driven targets like RevPAR or average daily rate, they're now being driven by targets such as how do I, well, not how do I, but you must keep down the cost of recruitment or you must keep down, you must keep your team stable. These are some of the KPIs that they've now got, which is stability of teams growing from within, reducing the cost of employment. So those are huge changes, sea changes in the targets for the commercial entities within hospitality at the moment.
Sebastien Leitner
You mentioned commercial roles, which I find fascinating because I do see that popping up much more frequently. I mean, we started the conversation talking about revenue management, but what we are also seeing in hospitality is the sort of onset of, you know, I'm a commercial leader, I'm a chief commercial officer, or of sorts encompassing the disciplines of revenue management, sales and marketing, you know, reservation management distribution into a single, I guess, discipline, if you will. Is that the future of revenue management that it's becoming a commercial role that encompasses more than just revenue management?
Ally Northfield
I think so. Yeah. I think certainly for hotels to benefit from the level of understanding that the revenue function has, then driving that role into a commercial direction makes sense. I think also you need to, we need to consider the efficiencies that an asset can bring when removing the silos of marketing and sales and distribution and the commercial function and a commercial leader will bring that all together. And I see that happening more and more. And certainly from, I see it practically with Global Revenue Forum where we had people that were speaking as revenue managers like four years ago, and they're now commercial directors. This is, it's a very common route for them to go, which is great. I'm very pleased and proud of all of them that have gone that far, which is great.
Sebastien Leitner
So what competencies do they need? Like, if you're a revenue manager today, you want to become a commercial director or a commercial leader of sorts. What, what's the area that they lack most? Sorry, that sounds terrible. You know, what, where is the opportunity for No, I'm not the answer to that one. Where is the opportunity for growth? Right. Much nicer.
Ally Northfield
I think, I think, I think the opportunity to grow for revenue managers is really moving beyond understanding the numbers, which, you know, a revenue manager typically is really familiar with the numbers. It's then repurposing those numbers in a way that services the language that's used by an asset manager or the language that's used by a marketing director or the language that's used by a reservations manager. And I think it's having that confidence in the numbers means that a revenue manager specifically can grow their, what do you call it? Emotional intelligence. I don't know their ability to reinterpret those numbers in a way that satisfies these different target audiences. And that's a real skill to be able to communicate something meaningful at those different levels. So working up and down, if you wanna put it that way or across the organization. And I think that's an area where a revenue manager can really focus on their skills. Some revenue managers, they're just happy where they are. You know, it's not, you don't have to go in that direction. And there's some people that absolutely love just being with the numbers and understanding how an asset performs and just really getting out the best of the best out of it. You want, but if you want to grow, then I think that having those skills is super helpful. Strategic skills as well. That kind of like goes hand in hand.
Sebastien Leitner
Interesting. Interesting. So be the analyst, but be an extremely good communicator because you have to convince a lot more teams about your strategy, about what's happening, and where you're going with it. Is that a fair?
Ally Northfield
Yeah. I think that's a fair assumption, yeah. Absolutely. Yeah.
Sebastien Leitner
I want to talk some more about sort of the future of travel search, you know, you're organizing the Global Revenue Forum. I'm sure you talk a lot of agentic AI, but before we go there, quick, rapid, quick fire questions, right? So say anything that comes to mind, and then we talk about agentic AI. What's one metric you think is being overvalued right now?
Ally Northfield
I would say RevPAR. It just makes me uncomfortable. Feel like I'm eighty. I feel really old when I even say it.
Sebastien Leitner
Gut instinct or AI recommendation? Who gets the final say in pricing?
Ally Northfield
Right now, with the quality of AI analysis, I'd say gut instinct. But ask me again in a year's time.
Sebastien Leitner
A modern revenue manager is more strategist or analyst, which matters more right now?
Ally Northfield
Strategist.
Sebastien Leitner
Perfect distribution mix or maximum direct bookings? What's the real goal?
Ally Northfield
Perfect distribution mix.
Sebastien Leitner
Okay. And I have to go back to RevPAR. What's the most important metric?
Ally Northfield
I would say understanding cost of acquisition.
Sebastien Leitner
Okay. Okay. For every reservation, I assume, of the cost of acquisition of a guest?
Ally Northfield
Yes. Yeah. Yeah. For every segment, certainly. Yeah.
Sebastien Leitner
At your recent global revenue forum, you had a significant discussion about AI search tools, and how they're shifting consumer habits away from, you know, the typical transactional queries. With this shift in mind, how crucial is it for hotels to develop context relevant content? I guess, because now you're answering a bot, a large language model, right? Yeah. What what do you recommend your hotels or your customers to to do right now?
Ally Northfield
I reckon I hotels really need to have an understanding of of why a customer might book and under what circumstances, and create content that's likely to effectively create the largest FAQ that you've ever seen. Because it's kind of like, what would I do under these circumstances? And the answers have to be somewhere in your content. So if it's somebody asking about how long they can stay, can they bring the dog? Do they have height? Do you have a high chair for my two year old? All of that data needs to be then an AI bot needs to be able to simulate that data from a specific property and feed it back to you. That's a very simple example, but typically the extremely long search terms are being used by guests nowadays and put into AI large language models and expecting a result. And it does offer hotels an opportunity to really sell themselves based on the level of service and experience that a guest is looking for. And I think the concept of experiences now is huge and delivering on guest experiences is something that you can only really do if you have the right level of content there. So hugely important. So concretely, you're asking hoteliers to publish a thousand FAQs on their website, right? Like, come up with any possible questions your guests may have, because they will ask the AI agent, the large language model, whether they can have a soft boiled egg inside the hotel room. Yes. Obviously, it wouldn't doesn't have to be an FAQ.
Sebastien Leitner
Okay. But that's the question that needs answering, I guess.
Ally Northfield
Yeah. No. It I mean, it's it's also providing information on the experiences that you can have locally. It's having really nice like blogs or use cases of kind of like what customers have experienced at your property. So it's really repackaging content in different ways as well. Although actually a straightforward, can I do this at your property is, and answering that question is also gonna solve a lot of the But I've seen, I there are lots of different ways that hotels can solve those things? The content challenge in nice ways, really nice designer led ways, which helps solve the AI bot question.
Sebastien Leitner
But the risk is, as a hotelier, is that if I don't have the answer prepared, I won't show up to the, you know, guest. Right? I just will disappear from their perspective of you. Right? Like, and while previously, I may have gotten a phone call from a guest, hey. Do you accept dogs? That phone call no longer happens. Right? That's that's you're not getting that interaction with that prospect guest. What happens is that prospect guest uses ChatGPT or, you know, replace it by any large language model. Ask the question, and if the property hasn't provided, to your point, that content in their website somewhere, the hotel won't show up in this in the search result. Is that fair?
Ally Northfield
Yes and no. I mean, certainly, it's not as black and white as that. So certainly, if you had if you had eighty percent of what what a customer is looking for, you would still show. It. Okay. But it would be, they would be, there would be a rider on that result saying, I've managed to find you this, you can't get that, you know, you can't get the last two items on your shopping list. So, but it wouldn't be a straight never to be shown. Okay. Yep.
Sebastien Leitner
Are pictures becoming less important in this context?
Ally Northfield
Perhaps in the short term, but not in the long term. No, I think lots of it'll be multimedia searches will become the norm, but right now, perhaps not so much. A lot of it is sort of like text led, but still in the future, definitely.
Sebastien Leitner
In your quick fire answer, we talked about direct bookings versus perfect distribution, Max. We have to talk about OTAs a little bit. Right? What's your fundamental approach to using OTAs for distribution? Friend or foe?
Ally Northfield
Both. I think. Okay. Yeah. Let's go. Yeah. You can I think okay? So if you if you if you were to look at your property and you always had a percentage of occupancy that consistently year round was not being used. So you had like a gap between one hundred percent and eighty, let's say. And if you weren't using OTAs, then you should because they will fill that gap. And if you are a property that you are not very well known, then I think you should look at OTAs for just general breadth of distribution and promotion. Because they do reach like customers that you just won't. So it says really solid marketing tool to use. However, if you then get very lazy and you basically only use online travel agents, then I think then you will become trapped in that OTA environment and you will be susceptible to the algorithms that are being used to present your property. And sometimes they don't work for you. And that becomes then all of your eggs are in one basket and that becomes a very dangerous place to be in. So it is really like using, it isn't necessarily walking the middle road because that sounds like a bit of a sort of like a bit of a kind of situation, but, and nobody wants me. But I think definitely you still want to have that direct connection with the customer. So there is a direct strategy that should be taken definitely. But I think we need to be realistic in terms of the breadth of awareness that online travel agents can generate. And in that case, supply you with bookings ideally that you would not have otherwise got.
Sebastien Leitner
Yeah. You said something very interesting that made me pause and I was like, okay, I need to double click on that. When you start being lazy as a hotelier, is what you said, right? And being lazy typically means you stop doing something. Right? Like, what do you stop doing in order to that leads to that reliance on OTAs? What is that what do hoteliers stop doing when they rely too much on, you know, the OTAs?
Ally Northfield
I can I can only give examples of where where I've seen that, and it's where it's where hotels have decided that it's too difficult, too uncomfortable, and perhaps too expensive to try and work the direct channel harder? And typically that's when they are not very confident about what they're doing or they're not doing things particularly well. Or perhaps the underlying pricing strategy doesn't serve that they're using for the direct channel doesn't serve the customer very well. So often it's when there's a lot of things that are wrong, but typically it then leads the hotel to rely on the marketing and the distribution capabilities of online travel agents primarily because they do it really well. And so that's why I sort of mentioned the word lazy because it's effectively, it's a bit harsh to be fair, but it is effectively, it's selling out and giving over the entire inventory to a channel that is the owner of the guest at the end of the day.
Sebastien Leitner
I often have sort of very heated debates with hoteliers around marketing spend versus OTA commissions, right? Yeah. Especially with hoteliers that may spend five times more on OTA commissions than what they have as a marketing budget. And the argument that they make is, like, where there's uncertainty with the marketing budget. Right? It's just I don't know necessarily whether it is going to convert into, you know, accommodations or, you know, bookings or which, you know, you could argue that's wrong and here's the proof, etc. What do you say to a hotelier that, you know, you're challenged and say, Hey, you should spend more on marketing, but there is a reluctance or there is, you know helped me, in my next conversation with hoteliers selfishly?
Ally Northfield
There's the mathematics of it now. If you look at the level of investment that hoteliers put into commission payments, and if you then took a percentage of that and put that into the direct channel and grew that direct channel, then that would be a self serving continuity in investment. The mass of that is relatively straightforward. It's not sell, but I think what is happening now is that there are better technologies in terms of tracking guest behavior. There's better opportunities in terms of digital marketing to really understand exactly what guests are likely to do. And therefore I think you can get some more efficient results from the digital marketing space than you were able to before. So it's also having the right tech and I won't be able to kind of like offer you any examples of this because I'm really not in that space. But I do know that working with some of the digital marketing agencies that we work alongside with a client, from a client perspective, there's some extremely good technology nowadays that's able to create lookalike type clients and go after where those, sorry, guests. So lookalike guests and go after those guests that behave similarly and therefore actually, you can actually then start to farm or nurture, you know, a new guest segment. So all of these things nowadays are areas in which hoteliers can explore to really leverage that digital marketing budget and not cap it. It doesn't make sense. If a digital marketing budget is working, then you are getting more direct guests, then why cap that budget? It doesn't make sense. And I think that's, it's one of those, it's where the structure of budgeting and the P&L don't stand up and it don't work in the favor of the digital marketing side of the business. Because if you've got a budget and it says that this is what you spend in digital marketing, then irrespective of how popular that or how successful that budget is, it's challenging to then get more because budgets are typically set in stone and you don't, I've never had a conversation with a financial controller that says, this is really successful, can I have some more? There's the Oliver Twist element to this isn't there?
Sebastien Leitner
What do you mean more? Ally, are you making the revolutionary demand that we change how hotels manage their P&L?
Ally Northfield
In a way Yeah. In a way. Yeah, I am. No, I think that we need to get to a point where we pivot if we need to. And I think markets demand that, you know, if we're being successful, then why wouldn't you? And that's not to say that given a solid commercial reasoning, a financial entity would not change their mind. Of course they would, I'm sure. But I do think that budget structures and some of the rules around that are really prohibitive in terms of changing strategy. The clients that are open to change are the ones that are the most exciting and the ones that are okay, they're able to accept failure as well as success. Test and learn being like a real maxim. And those are the ones that typically in the long run are more successful as well.
Sebastien Leitner
Interesting. What's one channel that everyone should be participating in, but is currently not on everyone's radar?
Ally Northfield
If I was looking at distribution overall, I think distribution is becoming significantly more important again, and certainly from the direct channel. If you just combine some of the things we've spoken about, like the improved capabilities of digital marketing, AI search channels, changing guests behavior patterns, it's all of this will serve you really well in terms of still remaining able to capture the guest at the point of sale.
Sebastien Leitner
You're making a case for being in every channel, is I guess what you're saying, right? Like, if there is a channel you're not currently present in, get on it. Is that fair?
Ally Northfield
I would say so, and I can only say from my own experience, but in my experience, the hotel companies I've worked with who are able to remain consistently out of online travel agencies are those that spend an inordinate amount of money and time and specialist capabilities on the direct channel, like significant amounts of time and energy and expertise, or they have such a unique product that people want to stay with them. And therefore they don't need to be on online travel agents. And in fact, if anything will then also claim that it's not necessarily aligned with the brand. So if you look at some of the ultra high net worth individual brands, which is something I've mentioned before, not necessarily actually ultra high net worth, but just unique and experience that I like that in now because I think experience led opportunities and hotel offerings are really something that people are looking for right now.
Sebastien Leitner
Interesting. Before we wrap up, I'm curious if there is something in a hotel room today that you think will disappear in the future.
Ally Northfield
Oh, crikey. I was gonna say telephones, but mostly they have. Although they are reappearing. Would you believe They're reappearing. You've seen them reappear? Yeah. Yeah. Was in one and it had, the other day and it had one of those old Bakelite telephones, you know, the really old ones. Okay. That's fun. With the round thing, you know, that people don't know what you do with them, with the round dial. So yeah, that was interesting. That was a blast from the past. I'm not sure anything about anything else. Dustbins are just so horrible aren't they? But that's all I can think of, what's wrong with me?
Sebastien Leitner
Yeah, no, that's a good one. I recently came across a hotelier who said the key will not disappear, you know, like the physical key? Oh yeah, yeah. For all the sort of hype around mobile phones and having a digital wall app on your phone, it's like the key is critical and I hope they, you know, I will always be key being the key card, right? Not the physical, necessarily key, the lock key, but the key card is something that I think most hoteliers will probably stick with for some time.
Ally Northfield
I think so too. Think, I mean, when I'm working in a hotel with a mobile lock, the level of anxiety that I get, it's just mad just walking off the door. Is it gonna work? I mean, this is ridiculous. And I could do without that. Anxiety I have that my phone runs out of battery is Yeah. Yeah.
Sebastien Leitner
Look, the future looking question that I have for you is, when you think of agents making reservations, how soon until an agent will actually replace an OTA, in your point of view? Because it's not yet there, right?
Ally Northfield
Mean, is some version No, it's not, no. And some agent responses are just, oh, they're comical, aren't they? They're just like, no, mean, say that's not gonna work. But I think probably sooner than later. And I think as with anything, it's gonna be the first to market type consumers that will drive that and be willing to accommodate the downsides of the novelty and the innovation that they actually contribute to. So I think it's one of those tech questions, isn't it? Sort of like longer than you think, but sooner than you thought kind of thing.
Sebastien Leitner
So And who will win the race from your perspective? An OTA or
Ally Northfield
You know, travel booking is so complicated that at the moment, at the moment, I think even even a lot of AIs have kind of given up on the actual transactional side of So I think that in the midterm, the OTAs will win, you know, because they do it really efficiently. So unfortunately, not I don't mean that obviously. Sorry, should I say that?
Sebastien Leitner
That's okay. That's okay. You can say fortunately, unfortunately, this is a safe space, Ali. Only you and me, of course.
Ally Northfield
Exactly, exactly.
Sebastien Leitner
No, but in all seriousness, I think you have a really valid point, which is travel is not straightforward. It's sometimes complicated, especially cross border. You know, payment facilitation is difficult at times. Yes, Validating that the right customer is actually the person paying, you know, there's an identity validation. So, it's not straightforward. It's not you're not ordering a pizza. You're doing a bit more than that.
Ally Northfield
Yeah. Yeah.
Sebastien Leitner
So, you're cautious on who is winning that agentic race at this point. Is that fair?
Ally Northfield
I am. I think there's probably going to be other players that come in. I think, like, I think the fintech sector has got a lot of positive plays in this whole environment. And they may well kind of make things much easier, and therefore destabilise the race at the moment.
Sebastien Leitner
There is a question on my list here that I haven't asked you yet, which I really like, and I'd love to close with that, which is, you know, about the younger generation, and especially making hospitality attractive, again, for the next generation. From your perspective, what needs to change for hospitality to be feel relevant again for a younger, I guess, generation and a younger talent?
Ally Northfield
I think we need to really revisit the brand identity of hospitality. If you look at any of the advertisements for hospitality, the likelihood is that you'll see a chef or a housekeeper. And that is not what hospitality is all about. It is a fundamental part of it, obviously, but you don't see a revenue manager. There's probably a good reason for that, but you don't. So I think, and you don't get to understand the level of excitement that hospitality industry brings and the opportunities to grow, which you can grow faster in hospitality than you can in any other industry. I think one of the challenges is also for certainly for Gen Z is that the hours are pretty unsociable if you're actually operational and that it's just not in their nature to do things that are over difficult. Not my words, but certainly one of the characteristics. And I think you also need to remember that Gen Z has grown up in a lot of uncertainty and is anxious as a generation. And sometimes the hospitality environment, it's a twenty four hour show. And that is quite, it can be quite an anxious environment to work in. So there's probably just a sub message of psychological message regarding hospitality that is new. That what they see is people kind of like working very hard, high energy, very a complete often shifting environment within which you work, which maybe, well for me was one of the reasons why I loved getting into hospitality. But for some people it's just not what they want. They want stability. They want something that they know is gonna be the same the next day. So, there's a lot of things that we could do to change what people think of us. But I think the brand of hospitality is something we need to look at quite carefully and how we position all of the different roles.
Sebastien Leitner
Ally, thank you for joining today, this program, and sharing your insights, expertise, and your experience in this matter. This is awesome. Thank you so much for coming today.
Ally Northfield
Thank you for having me, it's wonderful. Absolutely.
Sebastien Leitner
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