October FOCUS

Revenue Management: Maximizing Profit

Revenue Management: Maximizing Profit

Hotel Revenue Management continues to evolve at a blistering pace. Driven by technological innovation and new distribution channels, there are some dynamic opportunities for expansion in this fast-growing field. The technology is primarily designed to help revenue managers further refine their operations and pricing models to maximize hotel profit. For example, hotels can't be all things to all people, so a key strategy is to precisely identify their target audience. By employing geo-targeting techniques and analyzing behavior such as previous bookings, on-property purchases and online shopping practices, there is an increased capability to define guest demographics. By segmenting customers in more specific ways, hotels are able to create more personalized experiences which, in turn, allow managers to optimize their room rates. It is also an effective way to fulfill the unique needs and preferences of the individual. Another methodology is to consistently monitor the competition's pricing strategies. There are software tools that analyze a competitor's current rates, and then allow a hotel to make its own pricing adjustments. It is also a useful means to conduct forecasting models. Other technologies that are being integrated into a revenue manager's toolkit include Artificial Intelligence in the form of automated algorithms, and Voice Recognition (VR) for data inquiries, rate changes, and booking behavior. Predictive and analytic software programs are also being leveraged to provide more forward-looking data, instead of the usual reliance on historical performance. These metrics allow managers to be more proactive - rather than reactive - with their revenue strategy. The October issue of the Hotel Business Review will examine these developments and report on how some leading hotels are executing their revenue management strategies.



Library Archives

 

Last month's feature articles...

Sheryl E. Kimes

A few weeks ago, one of my friends asked me why Revenue Management (RM) mattered anymore since there was no revenue to manage. Then, I started noticing that many hotel companies were laying off many of their RM team members. That got me thinking and as an RM person, of course it sort of rankled me. Does RM still have relevance in the post-Covid world? READ MORE

Cassie Bond

There are myriad of uncertainties for revenue managers at hotels worldwide. From managing an internal team, managing ever changing expectations, all while maintaining a sustained level of profitability, there's a lot to consider. Cassie Bond, CHRM, CRME, Vice President of Revenue Strategy at Chesapeake Hospitality discusses what revenue managers should keep top of mind while strategizing a way forward. READ MORE

Yatish Nathraj

Critical changes need to be made in the hotel industry before travel in the United States returns to normal. Property owner's, franchises and vendors need to work together to find scientific solutioned that will ease the fears of traveling guests. Better cleaning policies are only the tip of the iceberg when it comes to guest concern's about getting sick. READ MORE

Bram Gallagher

While the importance of F&B revenue has declined in middle-priced hotels, upper-upscale hotels have retained high levels of F&B revenue. The most important difference may well be meeting space, which acts to secure relatively stable F&B activity even in times of economic distress. Social distancing as a result of COVID-19 may limit the use of meeting space. READ MORE

Bonnie Buckhiester

Today we are witnessing market extremes; those that have very little demand, and those that bizarrely have a ton of demand. With traditional market segments evaporating overnight, hoteliers cannot afford to wait for a third generation revenue manager to take a leadership role in their organizations commercial thinking. This means fully embracing digital marketing and searching out new (or little-used) performance indicators. READ MORE

Trevor Stuart-Hill

Over time, increasing complexity in the areas of revenue management, marketing and distribution has driven the need for specialization, both in terms of technology and human capital. While each discipline can impact property performance independently, superior performance can only be attained through close collaboration and clearly defined common objectives. READ MORE

Renie Cavallari

Frugal Innovation (FI) is the ultimate human-tool to think differently about resources & develop inexpensive solutions to solve dynamic problems. Most of these solutions come out of necessity & adversity vs. pure innovation, stemming from a lack of capital and R&D. FI is an active-thinking-lab that creates solutions through repurposing resources that are likely right in front of you. READ MORE

Kell Sloan

The novel coronavirus (COVID-19) pandemic presents huge financial and operational challenges. With no end in sight, the overriding concern for many properties will be about the long-term survivability of the property. The key to survival will be cash flow. Revenue Management utilized properly can improve operational performance and keep the cash flow coming. READ MORE

Theresa Hajko

With the onset of the Covid 19 Pandemic and the catastrophic impact it has had on the Hotel industry Revenue Managers have had to sharply adjust their strategies to the changes and become even more resourceful in their approach. Read how Spire Hospitality continues to adapt their game plan to the constantly changing playing field during these critical times. READ MORE

Rob Adams

The global economy collapsed and the meetings industry along with it. Neither economists nor event professionals could have predicted the devastation to our industry. Nonetheless, there is growing optimism for 2021 and beyond. Through hybrid events and restoring confidence in the in-person meeting, event professionals reinvent the industry so we can return to human interaction, connected by a shared purpose. READ MORE

John Washko

Meetings Professionals are still adapting and evolving in these uncharted waters presented by the global pandemic and the MICE industry requires comprehensive health & safety planning, strategies and execution. This article discusses the crucial elements of a COVID-19 Resource Center, with the goal of ensuring safe & successful events for group planners of all types in the midst of such unique and unprecedented challenges. READ MORE

Todd Szymczak

The global pandemic has been catastrophic for hotel business. Economic costs and consequences have been most severe. More than just a disruption, these staggering numbers reveal an industry in deep distress. How much of that distress will lead to lasting damage? What will be the short-, mid- and long-term impact of the pandemic? And what liabilities and opportunities exist for hotel owners and investors? READ MORE

Chris McAndrews

In this piece about recovery from pandemic setbacks, Chris McAndrews, Vice President of Marketing – Hospitality Cloud, discusses the importance of digital. He notes that it is easy to see the case for technology in the immediate term with the predominance of virtual events, but that the case is equally strong as the meetings, events and hospitality industries return to in-person events. READ MORE

Allison Kinsley

We are taking time to optimistically and critically rethink our meetings, including challenging their essential components, what may be dispensable, and what we've been missing. A meeting planner and small business owner shares her experience on COVID's effects on the planning community, why government needs to pay attention to letting meetings take place, how to get people back to in-person events, and why the pandemic is good for the planning industry. READ MORE

Mario Candeias

In a world where science took over daily pricing decisions, costs and ease of operating sophisticated software, the longtime it needs to be updated with reliable databases that allow exact and meaningful forecasting and decision-making, became an obstacle to optimize pricing decisions and profitability as a whole. An endogenously developed and tailor-made Excel model & dashboard is a reliable and cost-effective answer to the above. It's cooler, too. READ MORE

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Coming up in November 2020...

Hotel Design: Home Away From Home

With the rise of the sharing economy and the peer-to-peer marketplace for lodging options, hoteliers are re-thinking the look, feel and appeal of their locations. There is an emphasis on re-creating a feeling of homeyness - a comfortable, cozy and inviting space that feels like home. 'This is accomplished through the careful selection of furniture design, paint colors, lighting design, artwork, bathroom fixtures and textile accessories. In addition, some hotels are providing their guests with upscale amenities, such as a book and movie library, home-style kitchenettes, a coffee machine with locally-sourced beans and tea, or even a batch of fresh-baked cookies. Similarly, there is a growing design trend based on the concept of place-making. Travelers are searching for experiences that are unique and authentic to the locale in which they find themselves, and so hotel designers are integrating a sense of place into their work. This is partially achieved by incorporating traditional artisanal crafts and other local artwork into hotel rooms and communal spaces. Another design trend includes the creation of full-service, co-working environments within the hotel. Guests don't like to stay alone in their room when they need to work, so now they can go downstairs to the lobby-or up to the roof-to work among others. These areas encourage guests - and non-guests alike - to stay as long as they like and to partake of hotel amenities. Finally, recognizing the importance of the Wellness Movement, some designers are exploring how room design can increase the likelihood of deep and restorative sleep. Creating dark and quiet spaces, blocking excessive light, providing guests with a selection of different kinds of pillows, and the ability to control room temperature, are a few of the best practices in this area. These are some of the architecture and design topics that will be covered in the November issue of the Hotel Business Review.