Insights & Strategies for Independent Hoteliers.
Today’s Revenue Management Thought - ran for 4 years
Now I publish Monday Revenue Rethink each Monday
5 Revenue Management Mistakes
Costing You Money
Dynamic Pricing Myths
Holding Your Hotel Back
How to Compete with OTAs
Without Losing Margin
The Power of a
Balanced Channel Mix
Today's Revenue Management thought:-
A hotel is an integral part of the travel experience, even if clients don’t spend much time in the room, & is socially important to any trip.
Hotels are much more interesting (than car rental or flights) for travelers to connect with friends or to run by their networks when making booking decisions.
Will we begin to see travellers sharing hotel pricing data readily though social networks beyond what is already out there via OTAs or metasearch players ?
How will this social interaction begin to have implications for the marketing and revenue strategies taking place in hotels every day ?
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Inaccurate forecasting, incorrect market mix, failed price strategies, lacklustre distribution strategies, complicated SOP’s, etc., etc.
An alarming number of hotels worldwide fail to generate economic benefit (profit) - even before Covid.
If this is true in times of relative stability, what can we expect from these coming years?
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
“Simplicity is the ultimate sophistication.” — Leonardo da Vinci
Yet in today’s modern Revenue Management world we are entwined in complexity. Our data sources, our tech stack, our distribution set-up, our pricing models, our reporting models.
Simplify. Simplify. Simplify.
Only by seeking every opportunity to do so can we enable our efforts to achieve their full potential.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Pricing's little secret is that there is no mathematically correct answer.
It’s a range of solutions which are possible, based on variables - most out of your control. Basically it’s, best case, worse case & somewhere in between.
Want to try and understand pricing….. then don’t start with pricing. Start with assessing value, quantifying it, understanding it, gain knowledge on what value is with your hotel, how it scales, how customers perceive it, where they start, where they end.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Gordon Gekko - from the movie Wall Street - “The point is, ladies and gentleman, that greed -- for lack of a better word -- is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.”
Has dynamic pricing has done away with face value in the true sense ?
Rack rate didn't only used to be a guide - it was a maximum !
Will dynamic demand pricing push room prices into the realms of the unattainable and out of the reach of your properties core audience.
Do we need to have regulation or should the free market continue to rule ?
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
The current high room rates can be explained by - “everybody knows” that hotels are expensive because demand is high.
The same ideas suggest that room rates should fall again when demands lacks off.
It might turn out instead that the high prices stick around because hotels will accept high rates rather than going for more market share.
Which outcome will we see?
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Upsell - cross sell - there is no such thing as a good time.
In fact, cross selling and up selling can be proposed throughout the client journey:
At the moment of booking, as it happens with e-commerce and airlines
A few days before the arrival of the guests through an email - the use of an optimized communication process with the guests
During the check-in
During the stay
On the way back, once the journey is over (especially if the experience was positive), asking for a review and offering further discounts and benefits in order to retain the customer and increase his lifetime value
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Upsell - cross sell - when do we create the moment that gives us that extra revenue.
No time is the right time, but if you don’t present the opportunity, your chances of generating supplementary revenue is zero
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Your inventory cannot be stored for later use.
Don’t be afraid to oversell, in a controlled manner. I am not recommending this for a small-sized property. But if you’re part of a pretty big hotel network, take a chance. It will definitely mitigate the consequences of last minute cancellations and no-shows.
The timing of this decision, as well as market knowledge is crucial. It’s better to adopt this strategy at the time of high demand or during peak season.
Have a backup plan, just in case. Shifting a guest to a similar property at the time of check-in could be one way to handle the situation.
Not earning money is losing money - Have a profitable week.
✌🏼
Today's Revenue Management thought:-
“Sorry, no time to make more money !”
So many hotel’s are understaffed, yet they are deferring the decision process’s which can help them optimise and increase revenues.
- Outsourcing functions like Revenue Management
- Implementing automated systems
- Re-evaluating Standard Operation Procedures
What will it take to convince hoteliers ? How long can you continue to live with “lost opportunity” ?
Have a profitable week.
✌🏼