HOTEL BUSINESS REVIEW

October FOCUS: Revenue Management

 
October, 2020

Revenue Management: Maximizing Profit

Hotel Revenue Management continues to evolve at a blistering pace. Driven by technological innovation and new distribution channels, there are some dynamic opportunities for expansion in this fast-growing field. The technology is primarily designed to help revenue managers further refine their operations and pricing models to maximize hotel profit. For example, hotels can't be all things to all people, so a key strategy is to precisely identify their target audience. By employing geo-targeting techniques and analyzing behavior such as previous bookings, on-property purchases and online shopping practices, there is an increased capability to define guest demographics. By segmenting customers in more specific ways, hotels are able to create more personalized experiences which, in turn, allow managers to optimize their room rates. It is also an effective way to fulfill the unique needs and preferences of the individual. Another methodology is to consistently monitor the competition's pricing strategies. There are software tools that analyze a competitor's current rates, and then allow a hotel to make its own pricing adjustments. It is also a useful means to conduct forecasting models. Other technologies that are being integrated into a revenue manager's toolkit include Artificial Intelligence in the form of automated algorithms, and Voice Recognition (VR) for data inquiries, rate changes, and booking behavior. Predictive and analytic software programs are also being leveraged to provide more forward-looking data, instead of the usual reliance on historical performance. These metrics allow managers to be more proactive - rather than reactive - with their revenue strategy. The October issue of the Hotel Business Review will examine these developments and report on how some leading hotels are executing their revenue management strategies.



This month's feature articles...

Cassie Bond

There are myriad of uncertainties for revenue managers at hotels worldwide. From managing an internal team, managing ever changing expectations, all while maintaining a sustained level of profitability, there's a lot to consider. Cassie Bond, CHRM, CRME, Vice President of Revenue Strategy at Chesapeake Hospitality discusses what revenue managers should keep top of mind while strategizing a way forward. READ MORE

Yatish Nathraj

Critical changes need to be made in the hotel industry before travel in the United States returns to normal. Property owner's, franchises and vendors need to work together to find scientific solutioned that will ease the fears of traveling guests. Better cleaning policies are only the tip of the iceberg when it comes to guest concern's about getting sick. READ MORE

Renie  Cavallari

Frugal Innovation (FI) is the ultimate human-tool to think differently about resources & develop inexpensive solutions to solve dynamic problems. Most of these solutions come out of necessity & adversity vs. pure innovation, stemming from a lack of capital and R&D. FI is an active-thinking-lab that creates solutions through repurposing resources that are likely right in front of you. READ MORE

Bram Gallagher

While the importance of F&B revenue has declined in middle-priced hotels, upper-upscale hotels have retained high levels of F&B revenue. The most important difference may well be meeting space, which acts to secure relatively stable F&B activity even in times of economic distress. Social distancing as a result of COVID-19 may limit the use of meeting space. READ MORE

Mario Candeias

In a world where science took over daily pricing decisions, costs and ease of operating sophisticated software, the longtime it needs to be updated with reliable databases that allow exact and meaningful forecasting and decision-making, became an obstacle to optimize pricing decisions and profitability as a whole. An endogenously developed and tailor-made Excel model & dashboard is a reliable and cost-effective answer to the above. It's cooler, too. READ MORE

Sheryl E. Kimes

A few weeks ago, one of my friends asked me why Revenue Management (RM) mattered anymore since there was no revenue to manage. Then, I started noticing that many hotel companies were laying off many of their RM team members. That got me thinking and as an RM person, of course it sort of rankled me. Does RM still have relevance in the post-Covid world? READ MORE

Trevor Stuart-Hill

Over time, increasing complexity in the areas of revenue management, marketing and distribution has driven the need for specialization, both in terms of technology and human capital. While each discipline can impact property performance independently, superior performance can only be attained through close collaboration and clearly defined common objectives. READ MORE

Theresa Hajko

With the onset of the Covid 19 Pandemic and the catastrophic impact it has had on the Hotel industry Revenue Managers have had to sharply adjust their strategies to the changes and become even more resourceful in their approach. Read how Spire Hospitality continues to adapt their game plan to the constantly changing playing field during these critical times. READ MORE

Bonnie Buckhiester

Today we are witnessing market extremes; those that have very little demand, and those that bizarrely have a ton of demand. With traditional market segments evaporating overnight, hoteliers cannot afford to wait for a third generation revenue manager to take a leadership role in their organizations commercial thinking. This means fully embracing digital marketing and searching out new (or little-used) performance indicators. READ MORE

Todd Szymczak

The global pandemic has been catastrophic for hotel business. Economic costs and consequences have been most severe. More than just a disruption, these staggering numbers reveal an industry in deep distress. How much of that distress will lead to lasting damage? What will be the short-, mid- and long-term impact of the pandemic? And what liabilities and opportunities exist for hotel owners and investors? READ MORE

Doll Rice

Hotel management professionals can learn valuable lessons about their teams, their properties, their priorities and their processes in a crisis, and one of the richest areas for new insights is in revenue optimization. This article discusses some of the revenue optimization lessons being discovered in a pandemic-altered industry landscape. There are plenty of reasons to believe that pandemic-driven revenue optimization lessons will leave the industry stronger and better than ever. READ MORE

Kell Sloan

The novel coronavirus (COVID-19) pandemic presents huge financial and operational challenges. With no end in sight, the overriding concern for many properties will be about the long-term survivability of the property. The key to survival will be cash flow. Revenue Management utilized properly can improve operational performance and keep the cash flow coming. READ MORE

Mike  Chuma

When a ship encounters a storm, do crew members abandon ship? Not if they want to survive. Instead, they batten down the hatches and use know-how and navigational tools to steer the vessel to calmer waters. The same is true of hotel revenue management. To navigate this year's perfect storm of mass cancellations, record-low demand and downward pressure on rates, hoteliers must draw on their experience, fortitude and technology tools of the trade. READ MORE

Mark Heymann

In today's world, nearly everything can be done through our phones. In that sense, hospitality companies need to understand how to leverage mobile technology. For hotels, the use of mobile tech can exponentially increase the efficiency and effectiveness of day-to-day operations. At one point, hospitality solely relied on human-to-human interaction. However, those days are long gone. READ MORE

Eric Price

The COVID-19 pandemic has businesses considering large-scale reconstruction and redesign to help combat the spread of the virus and protect against future health crises. Destination hot-spots are considering how best to protect their future customers. What might the hotel redesign process look like? How much could it cost, and how long might it take? How can hotels best utilize open space and fresh air going forward? READ MORE

Mostafa Sayyadi

The true basis of leadership was built upon a model that generated two sides of an X and Y axis. On one side is the concept of leadership that creates change through taking a process-oriented and the other as more of a relationship-oriented approach. Based upon the management versus leadership idea, a manager always has to be a leader but a leader does not always have to be a manager. READ MORE

Brenda Fields

The top performing hotel Sales Department will look very different than the model over the past 20 years. With the abrupt loss of demand and loss of traditional markets, it is critical to maximize the role of Direct Sales. Growing market share will be the focus to generate revenues and the successful hotelier in a competitive marketplace will quickly evaluate to devise and execute plans to impact market share. READ MORE

Randy Shelly

The hospitality industry took one of the biggest financial hits during the pandemic, but it's in the position to make one of the biggest comebacks, including winning back market share from homestay offerings. Customer confidence will drive repeat, continuous traffic, and as leisure travel begins to pick up, hotels are in a competition for cleanliness to earn the trust of their guests through thoughtful upgrades and renovations. READ MORE

John Welty

For some guests, the presence of a valet at the front door of a hotel is as expected as a bed in a guest room. And for hoteliers, implementing such a program may not seem to require much investment or planning. What they must keep in mind, however, is that valet programs don't come without risks, particularly in the wake of COVID-19. READ MORE

Bruce Wright

Will hotels of the future be operated by a robotic workforce? New doesn't automatically mean futuristic and hi-tech doesn't necessarily translate to visionary. People have an innate need for human touch and community especially in times of crisis when physical connection is off-limits. A completely contactless hospitality experience isn't a long-term solution, but how do we find the proverbial 'sweet spot' between high-tech and human touch? READ MORE

Christine Samsel

Should employers do drug tests, and what are the implications of a positive test? Is it preferable to implement a single, blanket policy, or vary the policy depending on employees' roles within the organization? Are employers required to accommodate an employee's use of medical marijuana? Attorneys at Brownstein Hyatt Farber Schreck discuss the employment implications of cannabis/marijuana for leaders in the hospitality industry. READ MORE

Maryann Prestia

Even in the United States, human trafficking is a widespread problem that often goes unnoticed. Due to its illicit nature, many businesses fail to realize sex trafficking and labor trafficking, the two most common forms of the crime, may actually be happening right under their noses. For hoteliers, this poses a unique risk that requires vigilance, a keen eye and training to recognize. READ MORE

Brian McCallen

When Greg Norman established his golf design firm in 1987, he did it with a mandate to preserve landscapes, respect Mother Nature and create enjoyable golf courses. The Greg Norman Signature golf course at Rancho San Lucas opened in February 2020, and is a multi-themed design that explores coastal and desert environments and offers a thrilling challenge from each set of tees. READ MORE

Mark Ricketts

Outstanding communications has always been an essential hallmark of a successful hospitality organization - from property level and the host community to the C-Suite. The global pandemic, with its many disruptions, has further challenged us to maintain positive connections within the organization and to our many audiences. Done properly, when we sustain connections at such a stressful time, knowledge takes the place of uncertainty and realistic hope displaces fear. READ MORE

Glenn Jones

When the COVID-19 pandemic struck this spring, Bermuda officials knew shutting down the tiny British Overseas Territory's borders was necessary to protect the well-being of island residents. But they also knew the impact on local businesses - both big and small - could be devastating. In response, the Bermuda Tourism Authority (BTA) launched a series of initiatives to support Bermudians in the here and now, as well as inspire future travelers. READ MORE

Kristi  Dickinson

The spa and wellness industry has changed forever. In the most dramatic way possible, recent events have proven that our Western medical system cannot save us. The businesses that will thrive in the wake of this tragedy are those that perform science-based therapies with proven efficacy. In this article we examine time-tested traditional spa therapies and how they can be adapted to modern applications. READ MORE

Coming up in November 2021...

Architecture & Design: Wellness is Key


Like every other facet of hotel operations, architecture and design firms are adapting their work to ensure the safety and well-being of both guests and staff. New ways to bring Wellness into hotel spaces are being explored and these solutions are taking on many forms. Hotel designs are incorporating more open floor plans, open air spaces, high ceilings, outdoor areas and operable walls into their spaces. Guests no longer want to be packed into tight areas. More "biophilic" elements are also being incorporated, offering guests the sense of being outdoors. Another trend is the reimagining of guest rooms to support remote work capabilities. Some hotels are converting empty guest rooms into office spaces, complete with effective lighting and suitable backgrounds for video conferencing. Dedicated Zoom Rooms are also becoming increasingly popular. The main goal is to provide guests with a positive experience in a space that feels safe and comfortable. These are some of the architecture and design subjects that will be covered in the November issue of the Hotel Business Review.