Revenue Management
-
Is hospitality a lousy employer?
*Trigger warning - this post contains potentially upsetting content*Is hospitality a lousy employer?A colleague recently lamented that none of Thailand's top 50 employers of choice are in the hotel business (link in the description). This came as a surprise given that hospitality is one of the main industries in this tourism-driven country.There may be bias in the selection of samples, and the ownership and business structure of a hotel corporation may make it difficult to think of it as a single major employer. Still, there are systemic and historical problems with the hospitality industry that may make one hesitant to recommend hotels as good places to work. Here are the key…
-
The top pitfalls that hotels must avoid in 2023
Everyone I speak with is upbeat about the coming year. This year may be the closest to normalcy since the pandemic. It is easy to get carried away or feel laid-back. Here are some things hotels should be aware of:Revenue versus budget: As the year progresses, demand may be higher than anticipated. It may be lower in rare cases. The benchmark should be market performance, not budget. RGI is the best option.Over-reliance on social media: Just because you have complete control over what you post on this channel does not mean it is the most effective. There are ads galore, and their reach is shrinking as personal content is prioritized.…
-
Why do hotels make such a big deal out of one-day festivals and events?
One question I've had is why hotels feel the need to devote so much of their marketing budget, content space, and effort to single-day festivals or events. To be sure, they are a good way to promote yourself and catch the attention of some people. But ignoring all the other guests who need a place to stay for a long time before and after the event seems like a missed opportunity. Consider Loy Kratong or Christmas (or add your own festival here). They get a lot of attention in marketing plans and are promoted weeks or months ahead of time. Packages and offers compete with everything else for promotional space…
-
Top five elements influencing conversion rates on your hotel website or app
There are various outside elements that determine how well your website or booking engine converts visitors into bookings. I'd say that most of the convincing happens before guests even come to your website. However, once they are on the booking engine, the following are the most important considerations:✅ Pricing is by far the most important consideration. You convert more if you have the "best rate guarantee" (BRG) and your rates are better or the same as elsewhere online.✅ Choices: More guests will book when the options for accommodation types, pricing, and packages are balanced.✅ Visuals: It helps if you can include a hero shot as well as links to the…
-
Top ten questions to ask your OTA market manager
Most hotel team members meet or call their OTA market managers on a regular basis. It is important to keep them on their toes in order to maximize the revenue potential for your property.👉🏼 Can you influence my ranking and how much does it matter?👉🏼 Will the promotion or discount generate incremental revenue?👉🏼 How can I raise volume while keeping the average distribution cost per booking stable?👉🏼 How can I increase or maintain my market share?👉🏼 Will the increased advertising add to my existing commission or margin (distribution) costs?👉🏼 What can I do to reduce unilateral discounts, vouchers, and point-of-sale offers?👉🏼 What am I doing wrong in comparison to my…
-
Four unconventional strategies to boost your RevPAR
Some strategies may look like discounts or freebies, but if you use them well, they could help you make more revenue overall. The following recommendations are intended for independent properties and small chains. If you have a high number of loyalty program guests, there may be less room for these tactics.💡 Upsell at a discount: Unless you expect to be completely booked, you can offer some guests the option to upgrade to the next category at a discounted rate. You free up more lead in rooms that may sell well in general and sell higher categories that may remain vacant.💡 Upgrade direct guests: If they paid full price, they will…
-
Five Mistakes Hotels Make with Competitive Set
Competitive benchmarking is an invaluable tool. I've seen it go wrong in a variety of settings. The following are the top five. Anchoring price at a fixed position: Always pricing exactly x amount below or above a competitor. Alternatively, set the price exactly between competitors A and B. Not looking beyond the official comp set: On OTAs and Google/Maps, an entirely different set of competitors may be taking business away from you. Not looking at extranet for who they are or not looking at “Similar hotels nearby” is a mistake. Pressured into picking a wrong competitive set: Owners and top executives may put pressure on hotels to choose a competitive…
-
Digital Marketing Managers are from Venus, and Revenue Managers from Mars
Here is a cheat sheet for digital marketing managers. If you want to know what your revenue manager means, this is it. Rate hurdle Minimum order value Group ceiling Maximum order quantity (specific product) Average daily rate (ADR) Average order value Average length of stay (ALOS) Average quantity Segments Sell channel categories Revenue per available room (RevPAR) Average revenue (per store) Total revenue per available room (TrevPAR) Total revenue per (available store) Gross operating profit per available room (GOP PAR) Gross profit per (available store) Net revenue per available room (NRevPAR) Net profit per (available store) Revenue generation index (RGI) Market (click) share Market penetration index (MPI) Market share ranking …
-
Revenue Managers are from Mars, and Digital Marketing Managers from Venus
Here is a cheat sheet for revenue managers. This is what your digital marketing team or agency means when they talk. Prospecting 🟰 Demand generationImpressions 🟰 InfluencingWebsite visits 🟰 Direct guests (potential)Engagement 🟰 Tentative (guests)Bounce rate 🟰 WashBooking funnel 🟰 Sales process (online)Conversion rate 🟰 Pricing effectivenessConversion window 🟰 Lead timeCPA (Cost per acquisition) 🟰 Distribution costGeotargeting 🟰 POS (Point of Sale)One way to learn something new is to find a way to link it to something you already know.What would you like to add to this list?
-
Five hotel jobs (mostly commercial) that will disappear in the next five years
⭕ (Director/Manager) Sales/Sales & MarketingWhy: Because the majority of business has moved online. Traditional DOS/Ms can only contribute 10-20% of (offline) business.Indicators: Rather than DOS/Ms, more hotels are hiring well-rounded commercial leaders.The way forward is to expand into the dynamic rate world, managing OTAs and bed banks while also bringing revenue management skills to the table. Alternately, specialize in MICE, corporate, series, and group business.⭕ Revenue ManagementWhy: Revenue management systems are becoming more sophisticated and affordable. AI will even be able to address shocks caused by rapid trends or strategy changes.Indicators: Global brands no longer employ this position at the property level. Clusters are also being used by more properties.…
