Today's Revenue Management thought:-

An student from the Copenhagen Hospitality School called me this morning, and asked me to sum up the essence of Revenue Management in five sentences…..

A challenge, in that Revenue management is the application of analytic disciplines that attempt to predict consumer behaviour in order to optimise product availability, and thereby identifying the right price to maximise growth and ultimately, profit.

The primary aim of revenue management is selling the right product to the right customer at the right time for the right price.

The essence of this discipline is in understanding the customers' perception of product value and accurately aligning product, prices and availability with each customer segment.

The shear volume of data, entails that we need to use technology to make the life of a Revenue Manager easier.

At the end of the day….. it’s an art form, a discipline, a numbers game… where there is no one fit solution or final result.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Two down…. Ten to go…. 2023 is in full swing

Q1 2023 is rapidly coming to an end, and many predict (forecast better times).  Remember to revise your forecasts, as data is constantly changing.

But what is it that makes forecasting such a thorny task ?

Here’s a few issues that can cause you challenges:-

1. • data properties change over time

2. • detecting changes in the distribution

3. • the forecast period has low predictability

4. • random fluctuations in the data

5. • when there’s not enough data

So don’ just blindly trust the models…. Be a bit pessimistic and question everything.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Another month is almost behind us.

Weak consumer spending and with erratic pickup numbers making forecasting extremely difficult, how do we plan ?

Revise, revise, revise.

Look at your numbers, look at your competition, re-evaluate your marketing…. there is the need for quite a bit of micro management.

Have a profitable week.

✌🏼

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.

✌🏼