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