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:-
Many hotels widely consider pricing to be a tactical lever that starts and ends with setting prices.
Others get stuck when it comes to investing in the necessary skills and tools.
The result ?
Value is left on the table and price wars can ensue – not because hotels have lost control of pricing, but because they never controlled it in the first place.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
What you charge today has nothing to do with yesterday or tomorrow.
It has to do with now !
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Pricing has nothing to do with quality, skill, supply or demand.
It has to do with marketing and with what clients perceive to be value.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Predictably irrational.
Have you ever thought about why our aversion to loss is such a strong emotion, but also leads us to make bad decisions. We often focus on what we “may” lose rather than what we “may” gain.
Many of our pricing actions are highly predictable, based on past experiences, achievements, etc., but are at the same time commercially irrational.
Holding fort and trying to sell a room for €200 is irrational when the market’s going rate is €150. So we think we lose €50 if the sale is made…. but in fact we are losing €200 if the sale is not made, but gaining €150 if it is made.
Predicting the “if” in the sales equation is the hard part.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Your most expensive room is the room you are yet to sell !
Why do many hotels refuse to adjust prices when there are a large number of vacant rooms that have not been sold ?
Last minute rates or discounts need to be calculated carefully and clear strategies established as to how and when to use them.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Forecasts are predictions about what should happen in the future based on information currently available - in an ever changing world. Forecasts are exercises of imagination - wishfull thinking - and are always questionable in their details.
Despite often being reliably incorrect, strategic value can be extracted from forecasts.
We just need to ask the right questions:
What do we believe is important and likely enough to influence a forecast ?
Macroeconomic uncertainties
Labor shortages
Spiralling energy costs
Where do we agree, and more interestingly, where do we disagree with the forecast?
Even if forecasts are based on the wrong assumptions, what do they indicate about the underlying trends ?
Identifying the hidden truths within forecasts will lead to a better understanding of the present and highlight early indicators of the future.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
It is extremely tempting to throw your hands up and say that forecasting is impossible when facing uncertainty.
However, decisions need to be made - even if it is leaving business unchanged, despite this feeling like no decision.
The key to unlocking accurate forecasting during uncertainty is to figure out what has changed, what has not changed, and what is still uncertain.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
What does it take to come out ahead when facing uncertainty?
Uncertainty is born from a cocktail of global disruptions: geopolitical tensions, supply chain bottlenecks, talent challenges, climate change, and more. Soaring inflation, rising interest rates, and the potential for recession are only making matters worse.
Ensuring that your pricing & revenue strategies, as well as forecasts are in place are of absolute priority.
One of the few business certainties right now is that we can’t wait for clarity. The time to act is now.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Strategic planning is often neither “strategic” nor much of a “plan”. It usually resembles risk aversion more than clear marching orders for an organisation.
Have a profitable week.
✌🏼
Today's Revenue Management thought:-
Strategy plans can be viewed as “clean”, but implementation often fails to meet its full potential since crucial ingredients for success are often lacking or overseen.
Here are a number of key success factors to implement your pricing strategy successfully.
Make price strategy a top management priority
Set an ambitious pricing roadmap
Select an experienced revenue manager to steer
Implement the new price structure in relevant systems to ensure automation
Define clear responsibilities between different functions and departments
Train your sales staff
Define KPI’s, monitor results, and steer accordingly
Communicate early results within the organization
Start small and aim for continuous improvement
Remember - a price implementation project is a marathon, not a sprint (with almost immediate results).
Have a profitable week.
✌🏼