October FOCUS: Revenue Management

October, 2021

Revenue Management: Monetizing All Offerings

Of all the departments within hotel operations, Revenue Management may have been the hardest hit, due to the pandemic. The logic goes - no revenue, no need for revenue managers - so many industry professionals were furloughed. If business rebounds in 2021, as expected, then hotel management will have to determine when prevailing occupancy levels justify bringing back their revenue management team. Also, the pandemic seems to have exposed some weaknesses in the traditional RevPAR models. There is a growing understanding that it is no longer sufficient to use a "revenue per available room" model; instead, hotels are adopting a TRevPAR model (total revenue per available room). This model recognizes that revenue streams from other departments are just as important as the revenue gained from rooms. As a result, hotels are looking at ways to monetize any and all hotel offerings - from dining outlets and spas to outdoor function spaces and local partnerships. 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...

Karla Brooklyn

The pandemic has served as a reminder about many aspects of our business and certainly, for hotels, one constant reminder has been that additional revenue must be generated in more ways than simply raising room prices. In the past 18 months, when every extra dollar has counted, the ability to drive fresh ancillary revenue streams has been vital, and has inspired a completely new level of innovation and creativity from many within the sector. READ MORE

Michael Sherwood

Are you prepared for the upcoming turbulent demand? It is not a question of if hotels have been impacted by Covid-19, it is a question of how they have been impacted. And perhaps more importantly, it is also question of how they manage throughout the recovery period. Gain insight into how retail pricing impacts your overall pricing strategy, consumer perception, business mix, and hotel profitability. READ MORE

Karen  Cooksey

A winning team needs not just a great defense, but, also, a point-scoring offense. For many hospitality organizations, the first understandable response to the pandemic was cutting expenses as much as possible. In the process, we have learned ways to be more cost-effective going forward. However, recovery really entails a focus on revenue generation, in particular adopting a vibrant sales culture that welcomes and takes advantage of the ideas and skills of the entire hospitality team. READ MORE

Ermin Jusufovic

Like almost everything in the hotel industry, revenue management changed dramatically during the last year. The pandemic conditions challenged all established processes and best practices as demand dried up, and historical data was rendered powerless in predicting future performance. Organizations with strong revenue culture were able to adapt and weather the storm, but with the Delta Variant raging through the country and as group and business travel segments lag in recovery, it is time to re-invent once again. READ MORE

Bram Gallagher

Past hotel downturns followed a similar pattern where occupancy recovered prior to ADR. In the current crisis, this dynamic has been reversed as the fear of travel and social distancing are the prime determinants of hotels performance, and missing demand segments account for the pattern of ADR recovery rather than recovering economic fundamentals. Historical data and a simulation exercise illustrate the strategies of revenue managers. READ MORE

Scott Dahl

Scott Dahl is a higher education Lecturer with over 30 years of senior-level industry experience. He offers insights from the pandemic period and illustrates a few of the many resulting opportunities. In particular, he highlights the impact of advances in technology and a shift in marketing dynamics towards social channels as opportunities for the industry. READ MORE

Jenna Fishel

The voice and influence of the hotel revenue management profession has evolved over the last 10-15 years. In the wake of the pandemic, revenue managers have quickly become one of the most important resources informing hotel profit strategies, but they need buy-in from leadership and adequate resources in order to succeed. READ MORE

Anil Bilgihan

The underlying principles of revenue management indicate that historical demand patterns and trends, as well as the number of reservations on hand, should be used to optimize prices. Nevertheless, due to the pandemic, historical patterns are no longer relevant and revenue management system algorithms cannot be trusted to produce meaningful demand forecasts and price recommendations. Incorporating big data may help revenue managers to improve the accuracy of their forecasting. READ MORE

William Perry

As the world comes out of the COVID-19 pandemic industry leaders will start to rehire revenue management leaders. Over the past two years, many of the foundational principles of hotel operations have changed, including the industry's approach to revenue management itself. Revenue strategists need to evolve, and senior leaders must think deeply about what attributes they are looking for in revenue managers. READ MORE

Brian Athas

It's widely known that hotels have been upended by COVID-19. With light now at the end of the tunnel we are asked the question of "What is coming next?" Revenue Management is reliant on data and market understanding, but after an entire outlier of a year we are leaning on all strategies and aspects of operations to meet owner expectations. READ MORE

David Vigil

Safety is the new luxury-it's of the utmost importance to consumers in today's health climate. To provide an excellent guest experience, staff must provide consistent health and safety standards at every touch point. The world has changed and it's up to hotel leaders to evolve and create a safe, welcoming environment for guests and employees. READ MORE

Florian Kittler

When was the last time you lost a top performing employee to a key competitor? This fixable problem costs businesses trillions of dollars every year. Businesses in hospitality and leisure find it increasingly challenging to retain and recruit the skilled talent required. Here we provide an overview of the state of the industry and some key differentiators to set your business apart. READ MORE

Jochen Ehrhardt

Have you ever noticed that Marrakech boasts such a large number of excellent luxury hotels and resorts, despite the fact that there are no obvious reasons for international business travelers to spend time, except for, perhaps, retreating for team building exercises? Please join me in my quest for excellence in the westernmost Arab country, the Maghreb - the "Arab West", and its most famous city. READ MORE

David Ashen

Shorter trips for leisure travel have caused the resurgence of the mom-and-pop independent hotel. Now being scooped up by larger hotel groups, how has this landscape changed? Areas like the Catskills are seeing leisure travel growth, as urbanites look for safe travel alternatives that don't rely on air-travel. Pre-1950s resort towns are seeing new life and hoteliers are finding opportunities in sopping up small resorts all over the country. READ MORE

John Welty

Many guests will remember the start of hotel sustainability programs as the little placards in hotel rooms asking guests to reuse towels if possible, to help conserve water. In many cases investments in more environmentally friendly operations have gone well beyond the impact of laundry on the hotel's carbon footprint. However, like all good deeds, there can be unintended consequences. READ MORE

Mark Hemmer

"Food, Glorious Food" famously exclaims the opening chorus of the musical Oliver! We know that feeling well, from the ever-present morning breakfast at our hotels to full-service bars and restaurants. Enter the pandemic on this stage, impacting most every phase of hospitality operations, including food and beverage. This article discusses how agile hotel operators have overcome these challenges, keeping F&B integral to the guest experience. READ MORE

Alexander Mirza

The focus of this piece is about how to implement diversity at the CEO level when owning a hotel and whether a CEO's diversity agenda should include the Board and Human Resources leader, and how to build a strong diversity department in the corporate office. With diversity data, sharing employee-volunteered data with all levels of the organization and franchised properties is the best way to go. 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.