From Beds to Ballrooms: Total Revenue Performance for Your Total Property

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | March 10, 2019

Get as much heads in beds as possible while optimizing your hotel's profit potential. This straightforward definition of a revenue manager's job-albeit oversimplified-probably rings true for many of us in the industry. However, if a revenue manager is solely focused on guest-room pricing, then who's in charge of enhancing revenue for the rest of your property?

As I discussed in a previous article, non-room revenue generation often gets segmented out across various departments, each overseeing their own efforts in siloed isolation. But, just as guest experience extends beyond the walls of their rooms to incorporate a bigger-picture view, so too should your hotel's concerted effort on improving total revenue performance.

Hotels can generate more than half of their revenue on non-room revenue streams-with meetings & events (M&E) business comprising the largest slice of this pie-yet traditional revenue managers and revenue management systems still take a limited "heads-in-beds" approach. So, how do we best decide what business to accept when faced with the complexities of multiple revenue stream considerations like function-space booking?

The Whole Is Greater Than the Sum

Total revenue performance is defined by IDeaS Revenue Solutions as "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."

Property-wide pricing decisions and revenue streams share an intricate and complex relationship. With each stream impacting different profit margins and booking patterns, it's important that each be considered and weighed against other functions to attain the most profitable business mix. When brought under the umbrella of one revenue manager or revenue team utilizing sophisticated analytics technology to transform disparate data sets from separate functions into actionable intelligence, total revenue performance can be effectively assessed and optimized.

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.