Nine Hotel Revenue Management Trends for the New Year

By Jean Francois Mourier Founder & CEO, RevPar Guru Inc. | January 15, 2010

The hospitality industry's crystal ball is, unfortunately, just as cloudy this year as it was this time last year. Though we can perhaps take comfort in the fact that those clouds are just grey instead of black and stormy, uncertainty is still the only thing that is certain for the hotel and lodging industry in general. Even with positive GDP last quarter (indicating that the recession is technically ending), hotels, resorts and other lodging properties are still experiencing depressed demand, low average daily rates and stagnant occupancy. In other words, low RevPAR. No one can know for certain whether these negative trends will persist through 2010 but following are my thoughts and projections for what 2010 has in store for the hotel industry.

In my opinion, the recovery will not be a dramatic upswell but rather a gradual overall improvement of the travel market that will allow the most astute operators to thrive and where others will fail. Success in 2010, in our opinion, is there for the taking, but it won't be easy.

1. Doing More with Less (Capital, Staff, Guests, etc.)

Despite the recovery, hoteliers should be prepared to do more with less this coming year. Guests will be stubbornly slow to return. Likewise, working capital (both operational cash flow and from borrowing activity) will be constrained, as demand and commercial lending continue to be elusive. Hotels and resorts will have to make the best of what they already have in 2010; in terms of guests, this means squeezing every drop of revenue from existing clientele and in terms of capital and infrastructure, it means squeezing every drop of revenue from every existing square foot.

And even with high unemployment suggesting a strong pool of applicants, hotels should also prepare for staffing levels well below what would have been considered normal just a few years ago. This will put pressure on managers to improve their systems, to relive the operational burden on short staffs and to improve processes all around.

2. Automation

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.