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  • Finance & Investment
  • How Well You Run Your Hotel Factors Into How Easily You Can Sell It

  • Whether you're planning to sell your hotel in the near future or many years down the road, one of the most important rules to remember is the better care you have taken of the business, the more easily you'll be able to sell it.

    This rule might seem like a no-brainer, but it's very common for hotel owners to focus so much on certain areas of the business that they neglect others, ultimately complicating the selling process when it comes time to leave the business.

    In some very basic ways, selling a hotel is like selling anything else that has had a previous owner. When someone is in the market for a previously-owned car, for example, they are much more likely to purchase one that has obviously been well-maintained and shows the most promise of suiting their future needs. Similarly, when someone is looking to purchase a hotel, they want to know that the business has been properly run by its previous owner and will allow them the greatest chance for success.

    Unfortunately, many business owners fail to keep this in the back of their minds when running their establishments, and then when it comes time to sell must suddenly face the ugly ...

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Hotel Business Review Finance & Investment

Gavin Davis
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Mike Handelsman
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Robert Plotka
Coming up in October 2019...

Revenue Management: Focus On Profit

Revenue Management is still a relatively new profession within hotel operations and as such, it continues to evolve. One significant trend in this area is a shift away from using revenue as the foundation to generate key performance indicators (KPIs) and to instead place the emphasis on profit. Traditionally, revenue managers have relied on total revenue per available room (TrevPAR) and revenue per available room (RevPAR) as the basis of their KPIs. Now, some revenue managers are using gross operating profit per available room (GOPPAR) as their primary KPI. This puts profit at the center of revenue management strategy, and managers are increasingly searching for new ways to increase the profitability of their hotels. Return on Investment is the objective of any hotel investment, so it is only logical that profitability and ROI will be emphasized going forward. Another trend is an expanded focus on direct hotel bookings. Revenue managers know that one way to increase profitability is to steer guests away from online travel agencies (OTAs) and book directly with the hotel. This tactic also reinforces brand identity and loyalty, and encourages repeat business. In addition, it provides a valuable platform to market the hotel directly to the customer, and to upsell room upgrades or other services to them. Another trend for revenue managers involves automation in their software programs. Revenue management systems with automation are far more desirable than those without it. Automating data entry and logistics increases efficiency, allowing managers to spend more time on formulating strategy. As a bonus, an automated system helps with aggregating and interpreting data. The October issue of the Hotel Business Review will address these developments and document how some leading hotels are executing their revenue management strategies.