Today's Revenue Management thought:-

Your revenue goals should be SMART:

• Specific

• Measurable

• Achievable

• Realistic

• Time-based

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Why are there no or very few jokes about pricing or revenue management ?

A Google search for jokes about accountants, doctors, lawyers or other proffessionals results in pages and pages of entertaining results. However there seems to be little about pricing specialists or revenue managers.

People do not find pricing funny because they do not understand it or even less the mechanisms behind it.

Perhaps when humourists start creating more jokes about pricing, that will be a sign that the field is maturing & the general understanding of the underlying skills is more widespread.

Upload a post, if you have an absolute cracker that we need to hear.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Umbrellas and randomised pricing

When it is raining shopkeepers make sure that they have a variety of small umbrellas for sale. Anybody caught out without an umbrella will be inclined to stop and buy one. Inspection reveals some interesting prices for although four or five umbrella models may be available, there can be ten or eleven prices!

This is because people in a hurry may simply grab the first umbrella they see in the category they want rather than taking the time to look through what else is available. They are clearly willing to pay for convenience – a perfect example of second-degree price discrimination!

The shopkeepers seem to practice their umbrella pricing by increasing prices of some units of each model while leaving the prices of others as normal. The higher priced units are positioned at eye level and the rain encourages people to hurry. When it is not raining, customers can be seen choosing carefully.

Randomised pricing works well for umbrellas because people in a hurry want to avoid the rain. Before the rain starts people can be seen spending time looking through the umbrellas to find the lower priced ones.

One group of customers is incurring search costs and the other group is sometimes paying a higher price in return for lower search costs.

Following the above line of thought, we can and should assume that hotel guests will voluntarily pay more to save some time.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Rapid reaction pricing - proceed with caution

Pricing and data technology has made it possible for revenue managers to process large amounts of information and implement the changes to pricing it suggests almost instantaneously.

Making a rapid reaction to market developments is often seen as an integral (almost cumpulsary) element of pricing strategy and seems to be highly prized in the revenue management world.

Aggressive tactics have their place, but there are many good reasons why it may not always be the right thing to do, especially when you find yourself under pressure to act but have a gut feeling that this would be the wrong thing to do.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Karl Marx - A Revenue Manager ?

Karl Marx is reknown for saying…..“from each according to his ability, to each according to his need”.

Translated into a pricing strategy this could be slightly reworded to….. “from each according to his ability to pay, to each a sustainable and profitable mix of products according to his need”.

When done well a pricing strategy addresses many new consumer segments through sales, promotions and tactical initiatives. In addition it also ensures that hotels sell their rooms and services at sustainable yields through capturing better yields from customer segments by stimulating their willingness to pay.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Pricing logic many hoteliers tend to forget about.

• Small increases add up over time

• Small changes are less likely to be noticed by competitors

• Small changes are less costly to correct if things do not go according to plan

• Small changes can be applied across your entire properties revenue generating outlets

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Today - April 1st 2022 I just released a major publication proving that the following myths really work:

• “The demand is slow, let’s lower the rates to get more bookings”

• “We are almost full, let’s raise the rates”

• “That’s a huge piece of business, we cannot turn it down to give it to the competition”

• “We should put a minimum Length Of Stay restriction over the event”

• “I cannot overbook the Hotel”

• “We closed X% more than Last Year/Budget so we did great!”

• “We have a crystal ball?”

😉 Jokes aside - most individuals dealing with Revenue related jobs know that the above is often counter productive to well established revenue strategies.

Happy April 1st & have a productive week.

✌🏼

Today's Revenue Management thought:-

Can I wake you up at 4AM and get your KPI’s ?

• Average daily rate (ADR)

• Revenue per available room (RevPAR)

• Average length of stay (ALOS)

• Occupancy rate (OTB)

• RevPAR Room Type Index (ReRTI)

• Market penetration index (MPI)

• Online review scores

You should know these figures like the back of your hand.

Knowing your KPI’s will give you a strong base from which to track your hotel's performance and make the right business decisions - see how far you’ve come, and challenge you to go even further.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Using Guest Feedback in Revenue Management.

It is important for hotels to understand what guests value in order to offer better services, improve ranking and visibility, drive bookings, and thus increase profits.

• Evaluate your hotel’s online reputation in different online review portals.

• Analyze your hotel’s online reputation on your main market segments.

• Establish and improve your hotel’s responsiveness to reviews.

• Encourage guest feedback on all booking portals.

• Verified reviews increase conversion rates.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Your hotel pricing strategy should be fitted to suit your hotel.

There is no simple or correct way to price your hotel rooms, but deciding on a strategy is important.

Consider what you have to offer, what your competition is doing and who you are trying to attract to your hotel.

There are a number of ways to price your rooms, while proving additional perceived value for your guests at minimal cost.

Have a profitable week.

✌🏼