Today's Revenue Management thought:-

The true cost of acquisition…..

The cost of acquisition for hotels using Global Distribution Systems (GDS) and Online Travel Agencies (OTA) is a crucial factor that affects a hotel's overall profitability and revenue management.

Cost of Acquisition through GDS (Global Distribution Systems):

1. Commissions: When hotels use GDS to distribute their rooms, they typically pay commissions to the GDS providers. These commissions can range from 10% to 25% or more of the booking amount. The exact rate may vary depending on the negotiated contract with the GDS provider.

2. Setup and Maintenance Costs: There are setup and maintenance costs associated with connecting to GDS. Hotels need to invest in technology and systems to interface with GDS providers and ensure their room inventory, rates, and availability are accurately and efficiently displayed on these systems.

3. Marketing and Promotions: Hotels may also spend on marketing and promotional efforts to increase their visibility and rankings within GDS platforms. This can involve additional costs to improve their position and visibility to travel agents and corporate clients.

4. Training and Support: Hotels might need to train their staff to effectively manage GDS systems and ensure that reservations are properly handled.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

The true cost of acquisition…..

The cost of acquisition for hotels using Global Distribution Systems (GDS) and Online Travel Agencies (OTA) is a crucial factor that affects a hotel's overall profitability and revenue management.

Understanding these costs is essential for hotels to make informed decisions about their distribution strategies.

Both GDS and OTAs come with acquisition costs in the form of commissions, setup and maintenance, marketing, and additional services. These costs can significantly impact a hotel's profitability. Hotels must carefully analyze the ROI from these channels, considering the costs and the revenue generated. It's also crucial for hotels to negotiate favorable terms with both GDS providers and OTAs and to continuously monitor the performance and cost-effectiveness of each channel to strike the right balance in their distribution strategy.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

That fine balance…..

Striking the perfect equilibrium in how hotels leverage diverse distribution channels to maximise their occupancy is undeniably a pivotal facet of revenue management within the hospitality sector.

Harmonizing the influx of direct bookings with those facilitated through Global Distribution Systems (GDS) and Online Travel Agencies (OTA) is a multifaceted endeavor, necessitating meticulous deliberation and strategic foresight.

Continually fine-tuning this equilibrium between direct reservations, GDS, and OTAs is an ongoing undertaking, mandating vigilant observation and adaptable strategies.

Maintaining agility in their approach, adeptly responding to shifts in the market landscape, and making informed decisions based on data are essential for hotels to attain the zenith of occupancy and revenue optimization.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

Information is often touted as a means of liberation, or at least that's what we are commonly informed.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

Budget season is in full swing, and this week I will be highlighting some thoughts on budgetting (part 4)

Creating a revenue-focused hotel budget is essential for effective financial management and long-term success in the hospitality industry.

This is a dynamic process that requires collaboration among various departments within your hotel, such as sales, marketing, operations, and finance. It should be a living document that guides your decision-making throughout the year and helps you adapt to changing market conditions.

Regularly Monitor and Adjust:

• A revenue-focused budget is not a one-time task; it requires ongoing monitoring and adjustments. Regularly compare your actual revenue and expenses to the budgeted figures to identify discrepancies.

• Use revenue management tools and software to optimise pricing and inventory management. This can help you maximise revenue by adjusting room rates based on demand and occupancy levels.

• Continuously assess the effectiveness of your marketing and sales strategies to drive revenue growth. Make adjustments as needed to meet or exceed your revenue goals.

• Prepare for unexpected challenges and changes in market conditions by having contingency plans and alternative revenue strategies in place.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

Budget season is in full swing, and this week I will be highlighting some thoughts on budgetting (part 3)

Creating a revenue-focused hotel budget is essential for effective financial management and long-term success in the hospitality industry.

This is a dynamic process that requires collaboration among various departments within your hotel, such as sales, marketing, operations, and finance. It should be a living document that guides your decision-making throughout the year and helps you adapt to changing market conditions.

Create a Detailed Budget Plan:

• Develop a comprehensive budget plan that outlines revenue projections, expenses, and profit margins. Your budget should be as detailed as possible and consider all revenue streams and cost categories.

• Include fixed costs like salaries, rent, utilities, and variable costs related to marketing, maintenance, and other operational expenses.

• Pay special attention to forecasting revenue from room sales, including projected occupancy rates and room rates. For food and beverage, factor in expected covers, menu pricing, and average check values.

• Don't forget to account for ancillary revenue sources like spa services, parking, and conference facilities.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

Budget season is in full swing, and this week I will be highlighting some thoughts on budgetting (part 2)

Creating a revenue-focused hotel budget is essential for effective financial management and long-term success in the hospitality industry.

This is a dynamic process that requires collaboration among various departments within your hotel, such as sales, marketing, operations, and finance. It should be a living document that guides your decision-making throughout the year and helps you adapt to changing market conditions.

Set Clear Revenue Goals:

• Establish specific revenue goals for your hotel. These goals should be realistic and based on your historical data and market research. Consider both short-term and long-term revenue targets.

• Break down your revenue goals into different segments, such as room revenue, food and beverage revenue, event revenue, and other sources of income specific to your hotel.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

Budget season is in full swing, and this week I will be highlighting some thoughts on budgetting (part 1)

Creating a revenue-focused hotel budget is essential for effective financial management and long-term success in the hospitality industry.

This is a dynamic process that requires collaboration among various departments within your hotel, such as sales, marketing, operations, and finance. It should be a living document that guides your decision-making throughout the year and helps you adapt to changing market conditions.

Gather Historical Data and Market Research

• Start by analysing historical financial data from previous years to understand revenue trends and patterns. This includes occupancy rates, ADR (Average Daily Rate), RevPAR (Revenue Per Available Room), and other key performance indicators

• Conduct market research to assess the current and future demand for hotel services in your area. 

• Consider factors like local events, tourism trends, competition, and economic conditions that may impact your hotel's revenue potential.

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

How to increase direct bookings (5)

Don’t forget to leave room for he odd “walk-in”

Have a profitable week !

✌🏼

Today's Revenue Management thought:-

How to increase direct bookings (4)

Increasing direct bookings for hotels is a strategic goal that can help maximise revenue, improve customer relationships, and reduce dependency on online travel agencies (OTAs).

This week I will discuss some effective ways to boost direct bookings:

Online Reputation Management:

• Monitor and manage your online reputation across various platforms. 

• Address negative reviews and concerns proactively to show your commitment to guest satisfaction.

Analytics and Data-Driven Decisions:

• Use analytics tools to track the performance of your direct booking efforts. 

• Adjust your strategies based on data insights to continuously improve your direct booking performance.

By implementing these strategies, hotels can increase their direct bookings, reduce dependence on OTAs, and establish stronger connections with their guests, leading to improved profitability and brand loyalty.

Have a profitable week !

✌🏼