The Total Revenue Performance Journey

Practical Revenue Management Tips

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | August 02, 2015

Total Revenue Performance is the intelligent calibration of demand across all hotel functions to meet overall business objectives. It is the ability to instantly and systematically decide which business to accept across multiple revenue streams at all times, based on greatest overall value to the asset. This kind of holistic approach to revenue management considers not only guest room rates or availability but also a myriad of other sources, including revenue streams across your business and other data, such as social media and sales data. Executed successfully, you can drive your revenue performance to whole new heights across your entire asset as you optimize all levels of your competitive positioning, pricing, and inventory management.

However, the journey toward Total Revenue Performance assumes that you are ready to expand the discipline of revenue management across your organization and use its principles strategically. And your readiness to embark on that journey means you’ve assessed your current revenue management processes and are applying best practices. This article outlines those practical tips for forecasting, pricing, optimizing and managing total hotel revenues, allowing you to determine your readiness for a Total Revenue Performance approach to your business.

Forecasting

  • Do Consider Data Beyond Unqualified Transient Demand

An unconstrained demand forecast is defined as the true demand for a particular product in the absence of any limitations such as when a room or seat is unavailable to purchase. The data and methodologies for unconstraining affect the entire pricing and revenue management process. When it comes to unconstraining the demand forecast, predictive models using only the unqualified transient data are generally considered to be not reliable. Unconstraining requires considering each and all of wholesale, group, corporate negotiated, and unqualified transient demands. This is what we call “holistic unconstraining.”

  • Don't Include Regrets and Denials in Demand Forecasting
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Hotel Spa: Oasis Unplugged

The driving force in current hotel spa trends is the effort to manage unprecedented levels of stress experienced by their clients. Feeling increasingly overwhelmed by demanding careers and technology overload, people are craving places where they can go to momentarily escape the rigors of their daily lives. As a result, spas are positioning themselves as oases of unplugged human connection, where mindfulness and contemplation activities are becoming increasingly important. One leading hotel spa offers their clients the option to experience their treatments in total silence - no music, no talking, and no advice from the therapist - just pure unadulterated silence. Another leading hotel spa is working with a reputable medical clinic to develop a “digital detox” initiative, in which clients will be encouraged to unplug from their devices and engage in mindfulness activities to alleviate the stresses of excessive technology use. Similarly, other spas are counseling clients to resist allowing technology to monopolize their lives, and to engage in meditation and gratitude exercises in its place. The goal is to provide clients with a warm, inviting and tranquil sanctuary from the outside world, in addition to also providing genuine solutions for better sleep, proper nutrition, stress management and natural self-care. To accomplish this, some spas are incorporating a variety of new approaches - cryotherapy, Himalayan salt therapy and ayurveda treatments are becoming increasingly popular. Other spas are growing their own herbs and performing their treatments in lush outdoor gardens. Some spa therapists are being trained to assess a client's individual movement patterns to determine the most beneficial treatment specifically for them. The July issue of the Hotel Business Review will report on these trends and developments and examine how some hotel spas are integrating them into their operations.