Short Term Action Plans
By Juston Parker President & CEO, Parker Hospitality Group, Inc. | June 15, 2010
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 The old adage of "right room, right person, right price" is no longer applicable and a successful property has all bases covered from demand and content management.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.
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?