Mr. Parker

Revenue Management

Short Term Action Plans

By Juston Parker, President & CEO, Parker Hospitality Group, Inc.

Revenue Optimization as most know has drastically changed over the past few years and is still constantly changing. How people shop and where they get their information changes on a day by day basis. The old adage of "right room, right person, right price" is no longer applicable and a successful property has all bases covered from demand and content management.

As the world of Travel 2.0 grows, the traveler is getting smarter and access to more and more tools they may not have had in the past. Sites such as www.gusto.com have made the traveler the one in control. With real time access to like-minded people, the new Web 2.0 allows the potential guest to see what they really want to know about the destination they are going to and this includes value. As the adage goes, price is what you pay for something and value is what you get.

So in this world of the ever changing Revenue Optimization environment how does a property establish short term tactics that can not leave money on the table and truly control the value the guest is looking for? There are 2 key concepts to take into consideration, Demand Management and Content Management.

Demand Management

Managing Revenue is something most properties feel they do pretty well. The truth of the matter is the greatest number of property do Revenue Management as a completed job. Once it's done it's done. In reality, it's never done. Why is that? Optimizing Revenue really is made up of several components, the greatest being Demand Management. In order to move from managing revenue to optimizing revenue, you need to understand your demand and manage it effectively. How is that done? Most properties feel they do a good forecast, well; forecasting is most often used as an end to a means. It actually should be a means to an end. A true demand forecast allows a manger to see what is happening in terms of rate and channel of booking. This then allows tactics to be made to fill in need periods with the best valued guest.

First one must look at where is demand coming from. Demand is much more than just who is booking where. It's what are they booking? What are the patterns? What is the rate they are paying? What do they value? As the answers to these questions are answered, a property is able to then ask, do I value these types of guests or do I need to manage my demand to a higher or better value of guest to me?

With some of the strong demand management applications out there, this task can be easier done in today's world. What we once thought was the holy grail of single vision inventory, is now real and we can manage multiple distribution channels and actually control our rate and our inventory, therefore managing our demand to get eh best guest available for us.

Content Management

The next step in executing strong short term tactics is to be able to closely monitor your content. Now in today's world of blogs, reviews and other sites, this can be challenging. A property should use the tools in the world to their advantage. The best way to control the content is to know what's being said about you! Sites such as Gusto! (see above) have created environments where like minded individuals create content about destinations and properties they have visited. They give reviews as well as personal information about the product that they wouldn't necessarily give the property directly. This can be a benefit or a detriment to the property.

As the saying of one negative word can offset 100 positive, you need to know when bad things are said so they can be corrected. Contact the guest and make amends. If that is not possible, learn from the issue and let it not happen again. On the other hand, if positive things are found to be said, capitalize off that. Learn what this type of guest is like. Learn what they value and then you will know what segments to target more closely to manage your demand. In addition, you will be able to manage your content by knowing what real people are seeing about you. The Conde Nast readers poll is one of the most respected and read travel reports. Why? Because this is real people, this is the words they are looking for and the type or info they see valuable form like minded individuals.

The 10 Minute Action Plan

With the above in mind, a property needs to develop a quick and easily implement able action plan that allows them to optimize revenues in the short term. The following is a suggested checklist of actions:

Follow these steps and in the short term, you will have a successful and profitable short term strategy to gain strong revenues.

Juston Parker is President and CEO of Parker Hospitality Group. He began in reservations, then moved to operations, sales & marketing, food & beverage, and banquet & conference services. Mr. Parker has a passion for creating top revenues and growing innovative revenue strategies. His approach has increased revenues, even in challenging times. As a published author on Revenue Management, Juston has been interviewed and/or quoted on CNN, Yahoo Finance, and Fox News, as well as featured in publications ranging from HSMAI, to Thailand Hospitality, University of Florida, and Event Solutions. Mr. Parker can be contacted at 303-499-2443 or Juston@ParkerHospitality.com Extended Bio...

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