Library Archives

 
Brenda Fields

The concept of revenue management has been around for quite awhile, with the airline industry first formalizing it with its computerized Yield Management system. The hotel industry, although late in the game, has now made a "revenue management" position as part of its standard staffing. This position was primarily developed as a way to capture revenues generated by the increasing demand over the past decade. Now that business is significantly down, many properties are at a loss as to how to generate business and how to ensure that each room is sold at the right rate to the right market. This article will provide some tips on ensuring that you manage your rates from a position of strength for both a short term and long term pay off. Read on...

Joshua Miller

Most hotel management principles focus on enhancing revenue and improving efficiency. An assumption that many hoteliers make inaccurately is that all of the revenue they earn actually makes it to the P&L. Most hotels experience revenue slippage due to problems with error and theft. In the major divisions, revenue control practices are put in place to safeguard against these issues, but these are rarely seen or enforced in the minor operating departments. This article will focus on revenue control in the non-core focus areas of the hotel and what you can do to improve it. Read on...

Juston Parker

Revenue Management continues to change rapidly. The days of "right room, right person, right price at right time" have long disappeared. Keeping up with the latest trends and keeping staff well educated is increasingly expensive and difficult. Outsourcing a property's Revenue Management has become a real and viable solution. Revenue Managers also present challenges for a property. What is their role? What does their job consist of? In the industry, most Revenue Managers really are Reservations Managers handling the duties of both jobs. This, of course, takes away their focus from both managing revenues and managing reservations. Not exactly a win-win situation. Read on...

Juston Parker

Revenue Management continues to change rapidly. The days of "right room, right person, right price at right time" have long disappeared. So how do you really measure success at the property? Now-a-days, the margins are getting ever closer and with more and more rooms being sold at net or wholesale rates, it's ever so important that properties look beyond the top line and see how their bottom line is effected by the decisions they make. GOPPAR, or Gross Operating Profit Per Available Room solves that need and gives a valuable look at how a property is truly performing. Read on...

Juston Parker

As we go through the throws of the budget and planning season, people consistently wonder how does one look into the future to get more accurate budgetary planning and get good data for revenue strategies. Now, is always a good time to start planning. There is one fundamental difference between Revenue Management and Revenue Optimization, the former is passive and the latter is active. More than that, it's proactive. Revenue Optimization looks into the future and builds a plan to effectively create revenue and harness demand to fully return the best revenues possible. This is the goal of all who do Revenue Management (Optimization). So, what are the keys to proactive Revenue Management? What can move a property from Revenue Management to Revenue Optimization? Let's look at the process and learn how to maximize our return. Read on...

Stowe Shoemaker

Hospitality managers have paid much attention to the practice of both revenue management and customer loyalty over the last few years. Unfortunately, these managers often come from different departments; and as a result, they often have different goals and different financial targets. For instance, those in marketing are measured by increases in repeat purchase, word of mouth, and satisfaction, while those in revenue management are measured by REVPAR index and yield index. While in an ideal world these goals would be complimentary, this is often not the case. Rather than being a zero sum game, it is a winners take all game, where the win is the incentives that come from reaching specified targets. For example, in one of my executive education classes a sales manager of a large international hotel company told me the following story... Read on...

Juston Parker

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. Read on...

Juston Parker

When does a guest book? The answer most give is, "when they want to stay". The truth of the matter is they book when the time is right for them. Traditional marketing gets all the information in front of the guest and hopes that when the gust books they choose you! This shotgun approach leaves many properties unable to track true conversion on their efforts and wasting money on trying to get guests that never stay. By looking at true patterns, one can put the value product in front of the ideal guest at they time they are interested in booking, thereby creating an easy environment for the guest to book. In addition, since this guest is getting what they want, not only is conversion higher, but the ADR is as well. So, how do you know when is the right time to get before your guest? The key is micro-segmentation of the guest profiles and searching out what they value. Read on...

Connie Rheams

It may seem counter-intuitive, but just because hotel occupancy rates are up, does not necessarily mean that profits are. Increasing the bottom line may require a new way of thinking. Many hospitality industry executives instinctively feel that technology is both a blessing and a curse. Yes, technology increases productivity and enables new ways of communicating with customers, but it also creates new challenges as distribution channels emerge, and new headaches when the technology doesn't work the way it's supposed to - which seems to happen all too frequently. Read on...

Connie Rheams

Recent "commoditization" of the hospitality industry has encouraged companies to compete on price, and achieving differentiation through service has required higher investment (higher quality, shorter operation cycles), reducing overall profitability. Every year, surveys are conducted that clearly outline companies' need to reduce costs and increase operational efficiencies. Many companies have already made great headway in accomplishing this goal by reducing complexity, implementing best practices and leveraging best-of-breed technologies. While the hotel industry has experienced strong revenue growth over the past few years, however, bottom-line performance has eroded since 2000, due to escalating expenses, including "non-controllable" costs such as utilities, insurance and government regulation. These costs - along with "controllable" costs such as payroll, staffing and marketing - are expected to only increase in the years to come. Read on...

Juston Parker

The hospitality industry has been affected by many devastating events in recent years. The attacks of September 11, 2001 struck fear in travelers, and the airlines and hotels responded in unprecedented ways that completely changed the way we traveled. SARS fears reached to multiple continents as people feared the spreading epidemic. The war in Iraq and the increasing terror threats reduced attendance at the Olympics in Athens to unheard of low levels. Hotel occupancy and Revenue per Available Room or RevPAR (a key indicator in the hospitality industry) were expected to be at record highs but dropped to record lows. Read on...

Juston Parker

To group, or not to group, that is the question. It doesn't take William Shakespeare to pose the quandary facing many hotels of how much group business is good business and when does a group pose a risk to maximizing revenues at a property. To begin to answer this, we must first uncover the principles that hospitality pricing has always been under. Hotel Revenue Management has been and many times, still is, under the "department" of sales and marketing and the Director of Revenue, most of the time still reports to the Director of Sales. The Director of Sales has a mandate to fill the house and most sales managers focus on group business, so therefore the thought is "if we want a sales team, we want them to sell and they need to sell group". This then leads to the thought of "take group business and then if we get the transient to fill in the holes". These thoughts are fundamentally unsound and cost many properties hundreds of thousands of dollars. Read on...

Juston Parker

Is it possible for a hotel to "create" demand? Is this just a myth used by Directors of Sales to try and stimulate the troops? When it appears that there is just no one wanting to visit your property, can you really "flip a switch" to drive people to your product? It is possible to create demand where there is none. First we need to uncover what is demand and how can it be managed and even stimulated. Read on...

Jean Francois Mourier

Historical pricing, excessive reliance on comp set analysis, 'push' marketing tactics and a reluctance to embrace new media, are all part of the outdated business model still being clung to by many hoteliers across the globe. If anything positive has come out of the current economy, it has been to show the lodging industry how ineffective these strategies are compared to more forward-thinking, efficient models being used by leading properties worldwide. These initiatives are available and ready for your hotel to implement - all that's needed is a willingness to look beyond the tried and easy methods and to embrace the newest tools available. Read on...

Tina Stehle

Competing in the hospitality environment has never been more challenging. The number of vendors and products is overwhelming. Competitors are constantly looking for a marketing advantage. And hotels within your competitive set are likely to be utilizing business intelligence more than ever before. In this environment, hotels that succeed must do more than merely 'keep up' with the competition. They must be able to identify guest trends, recognize problem areas and develop strategies that increase profitability. They also must be able to react to market changes quickly and efficiently. Sounds good, but how do you make it happen? With 'data analytics,' which uses guest and operational information to predict future trends and stay a step ahead of the competition. Read on...

Show Per Page
Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.