HOTEL BUSINESS REVIEW

October FOCUS: Revenue Management

 
October, 2021

Revenue Management: Monetizing All Offerings


Of all the departments within hotel operations, Revenue Management may have been the hardest hit, due to the pandemic. The logic goes - no revenue, no need for revenue managers - so many industry professionals were furloughed. If business rebounds in 2021, as expected, then hotel management will have to determine when prevailing occupancy levels justify bringing back their revenue management team. Also, the pandemic seems to have exposed some weaknesses in the traditional RevPAR models. There is a growing understanding that it is no longer sufficient to use a "revenue per available room" model; instead, hotels are adopting a TRevPAR model (total revenue per available room). This model recognizes that revenue streams from other departments are just as important as the revenue gained from rooms. As a result, hotels are looking at ways to monetize any and all hotel offerings - from dining outlets and spas to outdoor function spaces and local partnerships. 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.  



This month's feature articles...

Brian Athas

It's widely known that hotels have been upended by COVID-19. With light now at the end of the tunnel we are asked the question of "What is coming next?" Revenue Management is reliant on data and market understanding, but after an entire outlier of a year we are leaning on all strategies and aspects of operations to meet owner expectations. READ MORE

William Perry

As the world comes out of the COVID-19 pandemic industry leaders will start to rehire revenue management leaders. Over the past two years, many of the foundational principles of hotel operations have changed, including the industry's approach to revenue management itself. Revenue strategists need to evolve, and senior leaders must think deeply about what attributes they are looking for in revenue managers. READ MORE

Anil Bilgihan

The underlying principles of revenue management indicate that historical demand patterns and trends, as well as the number of reservations on hand, should be used to optimize prices. Nevertheless, due to the pandemic, historical patterns are no longer relevant and revenue management system algorithms cannot be trusted to produce meaningful demand forecasts and price recommendations. Incorporating big data may help revenue managers to improve the accuracy of their forecasting. READ MORE

Jenna Fishel

The voice and influence of the hotel revenue management profession has evolved over the last 10-15 years. In the wake of the pandemic, revenue managers have quickly become one of the most important resources informing hotel profit strategies, but they need buy-in from leadership and adequate resources in order to succeed. READ MORE

Scott Dahl

Scott Dahl is a higher education Lecturer with over 30 years of senior-level industry experience. He offers insights from the pandemic period and illustrates a few of the many resulting opportunities. In particular, he highlights the impact of advances in technology and a shift in marketing dynamics towards social channels as opportunities for the industry. READ MORE

Bram Gallagher

Past hotel downturns followed a similar pattern where occupancy recovered prior to ADR. In the current crisis, this dynamic has been reversed as the fear of travel and social distancing are the prime determinants of hotels performance, and missing demand segments account for the pattern of ADR recovery rather than recovering economic fundamentals. Historical data and a simulation exercise illustrate the strategies of revenue managers. READ MORE

Ermin Jusufovic

Like almost everything in the hotel industry, revenue management changed dramatically during the last year. The pandemic conditions challenged all established processes and best practices as demand dried up, and historical data was rendered powerless in predicting future performance. Organizations with strong revenue culture were able to adapt and weather the storm, but with the Delta Variant raging through the country and as group and business travel segments lag in recovery, it is time to re-invent once again. READ MORE

Karen  Cooksey

A winning team needs not just a great defense, but, also, a point-scoring offense. For many hospitality organizations, the first understandable response to the pandemic was cutting expenses as much as possible. In the process, we have learned ways to be more cost-effective going forward. However, recovery really entails a focus on revenue generation, in particular adopting a vibrant sales culture that welcomes and takes advantage of the ideas and skills of the entire hospitality team. READ MORE

Michael Sherwood

Are you prepared for the upcoming turbulent demand? It is not a question of if hotels have been impacted by Covid-19, it is a question of how they have been impacted. And perhaps more importantly, it is also question of how they manage throughout the recovery period. Gain insight into how retail pricing impacts your overall pricing strategy, consumer perception, business mix, and hotel profitability. READ MORE

Karla Brooklyn

The pandemic has served as a reminder about many aspects of our business and certainly, for hotels, one constant reminder has been that additional revenue must be generated in more ways than simply raising room prices. In the past 18 months, when every extra dollar has counted, the ability to drive fresh ancillary revenue streams has been vital, and has inspired a completely new level of innovation and creativity from many within the sector. READ MORE

Jennifer  Driscoll

Whirlwind, staggering, unprecedented, historic, once-in-a century-we still haven't run out of descriptors for what the pandemic has wrought. Still, like other disciplines of hospitality, revenue managers rose to the occasion with equal measures of well-honed skills and adaptability, working in harmony with the full hospitality team. Now, we consider how our experiences my help us shape our revenue management strategies in the coming year. READ MORE

Theresa Hajko

What a difference a year makes! A year ago, at this time our industry was at rock bottom due to the impact of the Corona virus. As we make our way out of our darkest times some segments of our business are flourishing while others are a little slower to turn around. Is there a way that Hoteliers can leverage these segments to drive more revenue? Let's take a look. READ MORE

Barry Shuster

The pandemic has been a great equalizer. Regardless of the size of the business, every full-service concept is struggling to rebuild guest traffic, fill positions, and manage inventory and labor costs at the unit level. In this article we provide a few effective tactics of successful independent restaurateurs who are driving sales and reining in costs with agility, creativity, and a losing-is-not-an-option mindset. READ MORE

Ryan McAndrew

The COVID-19 pandemic unleashed a wave of uncertainty, leaving hotel properties in operational limbo and making forecasts borderline useless as the delta variant continues to disrupt the global economy. As payroll costs and overhead continue to squeeze already-thin margins, carefully curating big data to aid revenue management can help hotels stay in the black. READ MORE

Robert  O'Halloran

This article focuses on the trends regarding hotel revenue management in the current lodging workplace. Creation of value and the skill set needed to be successful in revenue management will also be discussed. Finally, the career pathways in the lodging industry for revenue management analysts and managers and they operationalize revenue management as decision-making tools will be discussed. READ MORE

Nicole Adair

Since March 2020, hoteliers have been adapting to dynamic demand patterns and customer behaviors. The crisis has led to savvy hoteliers employing a new-era revenue management strategy, which is likely to endure after the virus fades. The pandemic has prompted hoteliers to analyze virtually all aspects of their businesses in order to run as lean and profitably as possible. READ MORE

Jack Lindemuth

The slow and steady US hotel recovery is well underway and the rebuilding of teams will gain momentum in the coming months. The supply of must-have progressive revenue strategy leaders for the new industry landscape will likely be less than the demand. However, there are a few proactive solutions hotels and resorts can take to get ahead of this key leadership position shortage in the coming months as they recalibrate and rebuild their teams for 2022 and beyond. READ MORE

Kell Sloan

Sporadic demand has resulted in a lack of confidence in historical demand-based pricing models and occupancy trends. This article explores how revenue managers can develop an understanding of future demand. Future demand hinges on understanding guests and understanding forces driving changes in market demand. Can predictive analytics be used to predict future business levels? READ MORE

Suzanne Swafford

The pandemic has forced us to fiercely restructure our organizations. To streamline revenue processes with the downsized staffing, maybe the time has come for the hospitality industry, to seize the day and address those much-needed innovations we've been muttering about for years. Is now the time for revolutionary changes in how we structure revenue optimization in hospitality? In a word, YES! READ MORE

Chris Martinez

This budget will be the starting framework for our action plan for the entire year, and we want it to be as proportionate as possible to the amount of revenue risk. If you are diligent to do your market research, quantify implications of your revenue risk, and pre-plan for contingencies, you will set your hotel team up for success for the year ahead. READ MORE

Coming up in November 2021...

Architecture & Design: Wellness is Key


Like every other facet of hotel operations, architecture and design firms are adapting their work to ensure the safety and well-being of both guests and staff. New ways to bring Wellness into hotel spaces are being explored and these solutions are taking on many forms. Hotel designs are incorporating more open floor plans, open air spaces, high ceilings, outdoor areas and operable walls into their spaces. Guests no longer want to be packed into tight areas. More "biophilic" elements are also being incorporated, offering guests the sense of being outdoors. Another trend is the reimagining of guest rooms to support remote work capabilities. Some hotels are converting empty guest rooms into office spaces, complete with effective lighting and suitable backgrounds for video conferencing. Dedicated Zoom Rooms are also becoming increasingly popular. The main goal is to provide guests with a positive experience in a space that feels safe and comfortable. These are some of the architecture and design subjects that will be covered in the November issue of the Hotel Business Review.