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:-
No other lever has more impact on profitability than pricing. But quite often, pricing strategies are historically grown, based on gut feeling, or too traditional.
Implementing pricing strategies are complex and not always clear-cut projects.
One should therefore approach a price implementation project as a marathon, not a sprint.
In order to have significant impact on the results, preparation is key for a successful implementation.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Determining which revenue strategy to pursue is often the most difficult part when planning. The sea of empty space that stares back from a blank whiteboard can deafen strategic brainstorming attempts with its silence.
Knowing which questions to ask and variables to adress is the most effective way to approach the subject of strategic revenue planning. Questions like,
Which sales and marketing opportunities are available to us immediately ?
Are the right people in place to execute our short-term and long-term goals ?
Do we have the necessary technology available ?
...can get the conversation started.
Once the discussion is underway, this will offer you a starting point for a revenue strategy.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
"We believe we will achieve our revenue and profit goals over the next 12 months with our current resources.”
This statement is one often heard when budget’s have been approved. Is this a true statement or one made to please owners, investors, financing institutions, and how do we ensure that these goals are met.
A proper revenue strategy aligns marketing, sales, and customer experience teams around a singular goal: drive profitability.
Unraveling such the puzzle requires a strategic revenue roadmap to achieve healthy and sustained growth.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Hmmmmm…….is always a good initial thought.
In the coming weeks we will many forecasts and budgets being presented. We all know that a lot of blood sweat and thought have gone into producing them.
Mo matter what - there will always be discussion.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Most of us are pretty bad at predicting anything longterm.
The shorter the time span and the greater the impact of our own actions have on the accuracy of the prediction, the better we are at predicting.
Reflecting on this, it is not so much about how good we are at predicting, but more so, what are the benefits we will receive when we are right about the predictions, and what type of harm they can cause to us, when we are wrong.
So it does it matter if your prediction does not come true in the first ten tries and you lose €100 each time, if on the eleventh prediction you get it right and you make €10,000.
Zoom out enough to be able to make the right predictions.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
One of the most insightful lessons I've learned from engaging in any challenge is viewing results in terms of "expected value".
This has guided my focus to be more process oriented and to take the long view on goals, which has led to better outcomes over time.
In probability theory, the expected value (also called expectation, mathematical expectation, mean, or average) is a generalisation of the weighted average. With other words, the expected value is the arithmetic mean of a large number of independently selected outcomes of a random variable.
When processing & planning your budgets & forecasts - do you calculate “expected value” ?
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Budget time is here…..
You can't prepare for what you can't see coming….
Demand forecasting has been stuck looking backwards for too long.
Building strategies on last year’s or 2019’s results is meaningless, and predicting the evolving future and the external factors driving demand is extremely challenging. Yet profitability depends on being able to accurately build forecasting models that make use of both internal and external data.
The need for predictability is not necessarily a need for guarantees…. and now back to those budgets.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Over a decade later & the truth still holds solid ground.
Warren Buffett said this about pricing power in a 2010 interview:
“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
In the wake of an impending recession, Revenue Managers cannot use a crystal ball to predict a probable collapse.
However, due to market turbulence and the potential for instability, it is advised that the key to minimizing threats in a recession is to be proactive rather than reactive during an economic downturn.
So look deep into the future & find opportunity for your property(ies)
Be flexible with existing customers
Don’t reduce pricing
Protect available cash
Evaluate non-essential expenses
Accept short term thinking
Re-evaluate everything
Innovate – Look for opportunities everywhere
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
All hotels want to generate more sales, and this is why we invest in tools and strategies to achieve such a goal.
There are however a few common mistakes we all make in forecasting
Basing our business decisions on gut feeling
Basing our decisions on limited or conflicting data
Failing to be flexible
That said, it’s still important to recognise that a sales forecast can’t accurately predict the future. But avoiding the mistakes, as well as applying best practices will help you boost confidence in your predictions, helping you avoid disappointment if reality and your forecast don’t meet.
Have a profitable week.
✌🏼