For almost seven years, I have tracked the hotels space very closely.
While everyone wants to jump on the 'unlock trade' bandwagon, I do not feel it's a great idea because the business model in itself is a little flawed.
Here's a thread 👇 (1/n)
Let's first start with the industry overview.
The whole industry works on one and one thing only. Revenues. (Let's call this A)
Are you capable of charging higher Revenues from your customers on a regular basis?
Are you able to maintain your Revenues if not increase them? (2/n)
Why is this relevant?
Well, think of a regular business selling goods / services.
Typically, when you're not able to sell something, you keep it for the next day or hold it in your 'inventory'.
Typically you have a certain level of demand estimation before you manufacture(3/n)
Whether you manufacture a product or sell a service, you do a certain degree of demand planning.
In the context of hotels, this would be based on the location, the demand of tourist arrivals and accordingly the number of keys (hotel rooms).
(4/n)
The only catch here is the fact that you only have a 24 hour window to sell a day's inventory.
Taj Mahal Palace in Mumbai only has a 24 hour window on a daily basis to sell 560 room nights.
Once the day gets expired, the inventory is gone. (5/n)
