[MUSIC] >> If ever there was a zeitgeist phrase to typify the seismic changes occurring within the hotel industry, demand management is the one that aims to challenge the current status quo. The industry finds itself at a crossroads. With the blur of lines of responsibility, the commercial developments are failing to launch. With new directions and structures, technology and processes, the missing ingredients. As we will discuss, in our first module in asset management, and in fact, throughout all of this MOOC. The financial stakeholders of hotel organizations are demanding increased attention to profit conversion. They attribute this to the dominance of the online travel agents, OTA's and the slipping control of distribution costs. However, the reality is less black and white as popular opinion will have us believe. Although there are multiple definitions to demand management and hotels, I propose that it be viewed as a holistic merger of the disciplines of revenue management, distribution, sales and marketing, and finance. Adopting an integrated approach to organizational structure, standards, and processes. Due to the lead time involved to effectively implement a culture and practice of demand management my belief is that hotel organization should ignore the hypes surrounding the potential of big data and focus now on developing integrated strategy and decision making through intelligent and achievable small data tactics. The challenge the industry faces are the historical structures influencing the current management of demand. As we all discussed in the demand generation module, hotels maintain outdated approaches to segmentation. Where traditional market structures dominates strategy and forecasting environment without sufficient in any cross reference to the channel of demand. In our revenue management module, we'll recognize the importance of revenue management systems. However, also acknowledging that in most cases, they continue to espouse very competent total revenue strategies through price and stay pattern optimization. However, without any direct consideration for the cost of distribution and direct and third party marketing investments. Significantly, the historical dominance of bricks and mortar travel agencies provided stable and regimented business to business demand for hotels. This, however, as we will discuss in the online marketing module, has been replaced in recent years by a resurgent OTA market, who have encouraged a new, highly unstable transient segment of consumers with changing priorities and approaches to travel consumption. The reality in 2015 is that the selling of a hotel room has become so complex that the current organizational structures, operating standards and processes are insufficient to satisfy the new normal. Despite industry wide agreement, the cost of distribution is one of the largest threats to future profit generation. Hotel organizations are slow to adapt. Channel segmentation and cost optimization within their forecasting environments. The reasons for this is clearly attributed to historical approaches to budget, strategy, and forecast management. Compounded by the challenges in the collection, storage, and extraction and analysis of relevant data within hotels' operational databases. Whilst this is one obvious example of the inherent challenges the industry faces, I also see the following points as critical towards the current malaise. Disjointed commercial organizational structures with inconsistent forward planning and reporting tools. The high labor cost and time management associated with channel optimization and inventory management. The reactive and long lead approach to cost of distribution calculations. Inaccurate net contribution calculations due to an inward focus on commission spend, and an absence of knowledge in all relevant investments attributed to the cost of acquisition. A low understanding of the tactics involved and the positive impact gained from position optimization by intermediaries to increase direct conversion and finally the impact of static market and pricing intelligence tools with limited opportunity for dynamic demand-based competitor sets. So this MOOC is designed to help existing and future managers of a hotel's demand to look at a bigger picture. The long term aim, should be to merge key elements of revenue management, distribution, sales and marketing, and finance to implement a cultural, technological and structural approach that we call demand management. The result will lead to a significant harmonization of key responsibilities. Integrated planning and execution of demand management activities. Satisfied on target customers, and a razor sharp focus on profit optimization. In the short term however, there are many small data solutions available to incubate the above opportunities. And by small data I mean the effect of management and analysis of existing indicators of demand in a structured and progressional approach. Over the course of the four modules we have developed for you, we have Asset Management, Demand Generation, Online Marketing, and Revenue Management. We will introduce many ideas and opportunities on how to make these smart decisions, and that by embracing this culture within the hotel. They can keep a permanent focus on profit and increasing the asset's value. The cultural shift towards integrative planning, decision making, and progressional management demand requires significant commitment of any hotel organization to achieve. Along with the collective support of the numerous operational and intelligence technology vendors. What I do however expect is that in the coming years we will start to see the evolution of the first wave of demand managers, educated and supported to achieve the obvious requirements for profit optimization. Perhaps that will be you. So as you progress through the MOOC, do take a step back to consider the current challenges that hotels face in breaking down these commercial silos and that prevent them from implementing an effective culture of demand management. From those organizational structures through to the standards and process that they have in place. Consider how with better knowledge and data combined with there are more collaborative approach to managing its demand. What opportunities will present themselves? I wish you all the best with completion of this MOOC. And I look forward to learning in future about what impact Demand Management has on you and your organization.
