Today's Revenue Management thought:-

Yesterday a client asked me - how to keep prices competitive in a downward spiralling market ?

There is no one solution to this. That said I believe it is of utmost importance to take a long view of the market you operate in, and the pricing tendencies you observe.

Thereafter do a reevaluate Your Pricing Model: Take a look at your pricing model and see if there are ways to make it more competitive.

The long term solution entails:-

• Offering Value-Added Services.

• Maximising Efficiency

• Utilising Technology.

• Developing Strategic Partnerships.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

“Status Quo and Resistance to Change”

A few of the reasons progress is not made....... #change

We see this type of indirect resistance again & again.

Get your numbers in place & prove them wrong.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Overbooked - is there anything we can do ?

We can start by calculating the optimal overbooking number for each day based on history of no shows, history of wash, wash by segment vs. segmentation on the books, and most importantly, based on the volume of arrivals.

Once determined, we can set a price we would accept reservations for - even if we are overbooking.

So…. Yes Basil Fawlty…. there is something you can do…. if you truly understand your numbers.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Will we hit 100% by overbooking ?

To achieve this, you need to take into considertation in your forecast the following fluctations

• cancellations (last-minute / same day)

• stay extension

• early departures

• no-shows

Hotels will calculate based on historical trends how much they can overbook with to reach a perfect sell out - 100%

For instance a 100 room property might need to sell 106 room, to be 100% occupied on the target date.

Unfortunately, the challenge with statistics, entails that you are using trends and averages. The result can vary, meaning that at times you will fall short of the 100% target, and sometimes you will have more guests than rooms.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

SO we decide to overbook….. but what price do we sell those additional rooms at ?

The right pricing for overbooking will depend on the particular situation.

Generally, your goal of overbooking is to maximise revenue while minimising costs and customer dissatisfaction.

To achieve this, you typically should charge a premium for customers who are booking these rooms. This premium can range from a few € to hundreds of €’s, depending on the situation and the level of risk you want to take on as well as your alternatives.

Ensure that you have a clear and concise operational strategy to manage these situations. In addition that the level of overbooking is “controlled” properly.

Ultimately, the right pricing for overbooking will depend on the business's goals and the specific situation.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Overbooking - do I dare ?

The upside of an overbooking strategy is that it allows you to maximise your occupancy rates and revenue potential.

Overbooking is not essential in a revenue management strategy.

It is a tool that can be used to maximise revenue, but it can also cause significant customer service issues and damage your hotel’s reputation.

Your decision to use overbooking should be carefully considered and the risks weighed against the potential rewards.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Keep you’re eye on the ball.

Here are the revenue management trends and strategies will we expect to see developing in 2023?

1. Predictive Analytics: Predictive analytics will continue to be a key revenue management strategy, allowing hotels to anticipate customer demand, pricing and booking patterns. This will help hotels optimize their pricing and inventory management to maximize profits.

2. Automation: Automation technology will become increasingly popular in 2023, with new technologies such as AI and machine learning being used to automate pricing and inventory decisions. This will help hotels save time and resources and make more accurate decisions.

3. Real-Time Insights: Hotels will be able to access real-time insights into customer demand and pricing trends, allowing them to adjust their strategies quickly to maximize profitability.

4. Personalization: Hotels will be able to target specific customer segments and tailor their pricing and promotions to maximize revenue from these segments.

5. Data-Driven Decisions: Hotels will be able to use data-driven insights to make more informed decisions about pricing, promotions, and inventory management. This will help them increase profits while minimizing risk.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Do hotels benefit from rate disparity?

Yes, rate disparity can help hotels better manage their inventory, pricing, and distribution channels because it allows hotels to adjust prices across different channels, adjust inventory levels to suit different customer segments, and target different customer segments with different pricing strategies.

This allows you to better optimise your inventory, pricing, and distribution channels to maximize revenue.

Additionally, rate disparity can help you better understand the effectiveness of your pricing and distribution channels, as well as identify which channels are most effective for your specific customer segments.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Do consumer benefit from rate parity & should hotels care ?

Yes, consumers benefit from rate parity because it ensures that they are paying the same price for a hotel room regardless of the booking platform they use.

Hotels should care about rate parity because it helps them maintain control and pricing consistency of their rooms.

Rate parity also helps hotels better manage their inventory, pricing and distribution channels.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

The ethical implications of rate parity are complex.

On the one hand, it can result in fairer pricing for consumers, as the same price is available through all platforms.

On the other hand, it can limit competition and reduce incentives for businesses to offer competitive rates and services.

The ethical implications of rate parity need to be carefully weighed and considered by all parties involved.

Ultimately, the decision of whether or not to implement rate parity should be based on an assessment of the potential risks and benefits to all parties involved.

Have a profitable week.

✌🏼