Today's Revenue Management thought:-

In turbulent times, customers look for great deals.

Understanding consumer purchase behaviour is key to exploiting any gains that can be had in this competitive landscape. This, together with the ability to create a personalised message in your marketing efforts is key to winning.

Faced with increased costs, how does the hospitality industry create great deals, which are a “win, win” for both the industry and the consumer ?

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

“My definition of a good hotel is a place I'd stay at.” - Robert De Niro

Many people share Mr. De Niro’s sentiment, but do we as responsible hoteliers ever use this line of thought to set our prices. 

We have embarked on creating all kinds of adventurous pricing strategies, while ignoring the true basics behind demand.

Personalization !!

Sometimes keeping it simple entails that your potential clients understand the message.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

There are still a huge number of hotels who believe in static pricing……. one wonders why.

Static pricing may be beneficial for a hotel in certain cases, such as when there is no seasonality or when demand is low and stable.

However, static pricing is not necessarily the most beneficial pricing strategy for your hotel.

By leveraging an automated revenue management system, hotels can analyze data to determine the best pricing strategy for their specific market. This will allow you to maximise your revenue potential by adjusting prices based on seasonality, market demand, and other factors.

Furthermore, an automated revenue management system allows you to quickly and easily adjust prices as market demand changes, which can be more beneficial than a static pricing strategy.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

The chicken or the egg ……

I have always pondered if it is demand that drives prices or if it is prices pushing demand.

Have a profitable week.

✌🏼

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.

✌🏼