Hotel Revenue Management Trends That Increase Total Profits in High Times

By Lily Mockerman Founder, Total Customized Revenue Management | July 01, 2018

Driving profitability during high seasons has to be one of the most enjoyable tasks for a seasoned and analytical revenue manager, but it can also be one of the most challenging. In many cases, when starting in a new position, a revenue manager may be able to find low-hanging fruit and capitalize on some of the basics like establishing group thresholds, raising rates to be more competitive to the market, and reviewing transient offers.

However, with occupancies at record levels and ADR's continually growing across the market, some properties which quickly action these basics may find themselves in a bit of a stagnant period. Perhaps certain patterns or seasons are consistently running greater than 95% occupancy, or there has been backlash in guest reviews when attempting to raise BAR more than in the past. Hoteliers may also find that they are raising their sell rates but struggling to fill, leading to the need to use promotions that the competitive set might not be offering just to reach market levels of occupancy over compressed patterns.

In scenarios such as these, the revenue manager must then take on the role of diagnostician, delving deep into the property's strategies and the resulting business to truly understand the best way to increase overall profits. Hoteliers nearing high season should consider new approaches to their demand in order to maximize profitability. This begins with a strong understanding of unconstrained demand by day of week and segment in order to best select an optimal mix. Additionally, reviewing length of stay and ancillary spend by segment can offer further insight into the best channels and segments to select.

Armed with this information, hoteliers can identify those times that have significantly higher unconstrained demand and begin to limit some of the less profitable channels and segments, whether through length of stay restrictions, group spend minimums, room type restrictions or others, depending on the unique situation of the hotel and market.

5 Top High-Demand Strategies

1. Review BAR performance vs. other rate offers

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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.