Revenue Management
Bonnie Buckhiester
  • Revenue Management
  • Revenue Management: There are Two Sides to Every Story
  • The saying goes that there are always two sides to every story. In the hotel business this couldn’t be truer when examining the relationship between operator and owner, or in many cases between operator and asset manager. Both want to optimize performance, but often this requires a careful balancing act between guest satisfaction and profitability. If a hotel is exceeding expectations – i.e. beating budget, surpassing last year, stealing market share – one might ask “does that mean the revenue management effort is optimal”? If a hotel is falling short of expectations, does that mean that somehow the revenue management effort is lacking? Read on...

David Chitlik
  • Revenue Management
  • In-House Tax Help is Part of a Hospitality Company's Evolution
  • Your hospitality business is small, with a single hotel or locations in only a few tax jurisdictions. Your accountant is taking care of compliance quite well, with the help of a local, seasonal tax specialist. But as you grow, expanding to another state, another region, it's time to seek tax expertise. Hiring an in-house state and local tax professional is often part of the evolution of a hospitality business. Its decision criterion is generally the same as that of any other position, arrived at through a cost-benefit analysis, and there are any number of metrics that can be used. Read on...

S. Lakshmi Narasimhan
  • Revenue Management
  • Are You Pricing for Profits?
  • A consistent misconception among hoteliers is that pricing for profits means operating at the highest price level within your competitive set. This is as far from the truth as anything. Pricing for profits is an approach which takes into account how well your pricing strategy deals with one of the most common phenomenon in hotel or any form of business - price resistance. Price resistance is a price point where customers feel the need to look elsewhere. A superior indication of price leadership and pricing for profits is to see where you stand in terms of REVPAR against the Market Average. This is principally because if you are well above the market average REVPAR, you are exhibiting price leadership more than merely an average daily rate in the higher levels. Read on...

Nitin Shah
  • Revenue Management
  • How World Economic Issues Are Affecting the American Hotel Industry
  • The good news is that globalization, cable news, the internet, and social media come together to give us instant and constant worldwide connectivity. However, the bad news is that these same technologies make all of us interdependent like never before on economic, political, and social events around the world. For hotel owners, the result is an industry that is more competitive, challenging, complex, and volatile -- and less predictable -- than ever. To demonstrate this, let’s look at how current global economic developments are having an impact on four aspects of the lodging business in America. Read on...

Sheenal Patel
  • Revenue Management
  • Thinking Differently About Data, Technology and Revenue
  • The hotel business can be mired in the way things have always been done. Hotel managers input data into spreadsheets without analysis, information from different business areas isn’t centralized, and hotel owners only address problems once they become chronic. Decisions are made without rigorous data to back them up, and a stagnant mentality can prevail. It doesn’t have to be that way—and in our company it isn’t. When we founded NVN Hotels 10 years ago, our intent was to challenge the status quo. By coupling a data-driven approach with guiding principles that empower employees to have ownership and enact change, we’ve created a culture that expects and rewards excellence, which ultimately increases revenues and propels growth. Read on...

Breffni Noone
  • Revenue Management
  • Developing the Revenue Management Talent Pipeline: An Industry and Academia Partnership
  • It is no secret that revenue management is facing a talent shortage. Current revenue management practice requires a focus on managing the profitability of all of a hotel’s revenue streams, and hotel companies are looking for emerging revenue managers who have the skill set required to meet that challenge. Amidst growing concern that hotel schools do not make the cut in terms of graduating students who are prepared for the demands of this new era in revenue management, I suggest that a strategic industry-academia approach is needed to develop a viable, and strong, revenue management talent pipeline. Read on...

Steven Pinchuk
  • Revenue Management
  • What Happens When Two Immovable Forces Seem to Conflict?
  • There appears to be an inevitable collision between two titans. Traditional segment based RM, which is not currently structured to consider each individual customer’s background and both their tactical value and lifetime value, currently does not work with the new breed of customer centric customer triggered one to one personalized marketing. Today an unknown customer usually gets the same price and availability as a known customer. This article will propose a solution that should be acceptable to both of these titans – where they will actually work together. Both pricing and availability can be more personalized without changing existing RM systems. Read on...

Robert Mandelbaum
  • Revenue Management
  • Shifts in Hotel Revenues Reflect Changes in Development and Guest Preferences
  • Historically, hotel revenue managers, aided by sophisticated computer programs, helped their properties determine the proper balance between the volume of guest rooms rented, with the price charged to rent those rooms. As revenue management has evolved, other factors have been added to the equation. Now, it is not just rooms revenue that is evaluated. Hotels realize that an occupied room has the ability to generate other revenues within the property. Using data from our Trends® in the Hotel Industry survey we are able to analyze historical changes in all revenues earned by U.S. hotels. Read on...

Robert Rauch
  • Revenue Management
  • Revenue Strategies for Boutique Hotels
  • The market is poised for boutique hotels to make an impact on the hotel industry like they never have before. With an expected soft landing of the economy in 2017 (2-3 percent RevPAR growth max) it is more important than ever for independent hotels to ensure that they have proper revenue strategies in place. Competing with the big brands for market share can sound like a herculean struggle but with execution of the proper procedures, a boutique hotel can stand apart from the crowd. Understanding where your business comes from is the first step of proper revenue management. Read on...

Liz Uber
  • Revenue Management
  • How do You Identify a Good Piece of Business?
  • Finding “good” business is not enough, by itself, to ensure the long-term success of a hotel. Instead, you must find good business to bring to your property that is also the “right” business for that particular location. Although this might sound like a fairly simple task, identifying the right business for the right hotel can, in fact, be a complicated endeavor. It involves a thorough evaluation of each opportunity, along with many fluid components at the property, and the market in which it is located. These factors can include the operations of individual departments within a property. Read on...

Ahmed Mahmoud
  • Revenue Management
  • The Most Overlooked Hotel Revenue Stream Measures
  • The ultimate goal of each hotel is to generate more revenue, achieve higher guest satisfaction, and a higher rank vs. its competitors, but when hoteliers implement the revenue management concept it needs a set of tools to help achieve the goals critical to maximizing a hotel’s profitability. It might be “A dark science --combining high technology and black arts”. While revenue management professionals devote significant effort towards advancing strategies and tactics to optimize revenue, many revenue managers still lag when it comes to establishing and measuring agreed upon success criteria. Read on...

Paul van Meerendonk
  • Revenue Management
  • Revenue Management Health Check: How Does Your Hotel Measure Up?
  • It is commonly accepted today that revenue management is critical to the successful operation of any hotel. However, while the adoption of this strategic approach to pricing - and the advanced systems that support this - are becoming more widespread, there is still no industry standard for how to evaluate revenue management outcomes. This lack of universal criteria around how to assess revenue management can pose challenges in trying to sell the success of a program within a hotel, as well challenging how to accurately benchmark a hotel’s revenue performance against its competitors. Read on...

Daniel Wise
  • Revenue Management
  • Bringing Revenue Management Tools to the Masses
  • Hotel revenue and profit optimization solutions have come a long way since my time as a revenue manager at Best Western several years ago. During those days, I discussed frequently with my co-workers how, while there were clearly benefits to implementing an automated revenue management platform, the technology solutions available at the time were not ideal for the mid-market sector of the industry, let alone independent hoteliers without the power of a flag behind them. Read on...

S. Lakshmi Narasimhan
  • Revenue Management
  • The Buffet A La Carte Balance in Hotel Restaurants
  • As someone who has poured money into a restaurant as an investment vehicle, the owner is looking at a good return on that investment. Restaurant profits cannot match rooms accommodation profits and in most cases tend to be between one third to one half of rooms profits. It is thus critical that the restaurant product is well thought out and harnesses resident hotel guest patronage complemented by non-residents. A well balanced buffet and a la carte offerings in the hotel restaurant will go a long way in delivering that patronage factor as well as producing that return on investment the owner is seeking. A win win situation that owners and stake holders hold dear to their hearts. Read on...

Charles B. Rosenberg
  • Revenue Management
  • A "BIT" About Cuba - Using Bilateral Investment Treaties to Protect International Investments
  • In July 2016, Starwood Hotels & Resorts opened a new hotel in Havana, Cuba. Once unimaginable for a U.S. hotel company, the Four Points Havana offers more than its 186 guest rooms and modern spa; it provides an authentic Cuban experience where guests can enjoy traditional Cuban cuisine in the Don Quixote restaurant, sip on the island’s most popular beers, Cristal and Bucanero, in Starwood’s signature bar “Best Brews,” and experience Cuba’s most sought after cigars with the guidance of a cigar sommelier in the hotel’s 5th Avenue Cigar Bar. As the first U.S. hotel in Cuba in nearly sixty years, the Four Points Havana signals the beginning of a new era, as previous forays into the hotel industry in Cuba did not end auspiciously for U.S. investors. Read on...

JANUARY: Mobile Technology: A Permanent Sense of Immediacy

Alastair Cush

A growing number of properties are implementing mobile access guest room locking systems and the apps that support them. Many chain standards mandate mobile access and independents are joining the trend. What few operators understand is that mobile access implementation has changed not only every aspect of hotel door locks but also many other areas of hospitality operations. More people are actively involved in the decision making process for hotel locks than before. Mobile access has integrated the lock process with numerous property and chain departments from sales to guest loyalty and brand marketing. The original purpose of improving guest door locks was exclusively loss prevention and security. Read on...

Jim Vandevender

Meeting data and technology have evolved considerably since the days of the bulky ,expensive mail ordered meeting planner guides and hotel catalogues. The ways in which hotels find and book groups is far different than the antiquated methods of not so long ago. As better technology surrounding meetings and events becomes available , hotels appetites for group business seems to also increase at a parallel pace making the need to keep the related technology evolving even more paramount. The companies that provide hotels with this meeting intelligence are continually developing new and more advanced methods of gathering this sought after data to keep up pace with the demand. Read on...

Dave Weinstein

As with so many industries, the smartphone has transformed how organizations interact with their customers. Look at the automotive industry, the airline industry, and of course, the hospitality industry. You start your car’s engine and set the climate control to the desired temperature, buy airline tickets and check-in on your flight and do the same with your hotel room, all from your phone. There is a slew of services that traditionally are offered by hotels via the “book” on the desk. The book is still there, but some hotels allow you to order via the television while others offer integrated tablets. Read on...

Kacey Butcher

Can you imagine your bank choosing not to provide a way to check account status and transactions outside of your monthly paper statement? Can you further imagine a popular franchise restaurant only having paper take-out menus? You would be forced to contemplate what other aspects internally within the organization would make doing business with them complicated and archaic. There you find your own personal underlying immediate expectation of baseline service and operational procedures, where a decision is often made instantly to move onto the next provider. A decision to choose another provider that seemingly knows how to service customers with the utmost up-to-date standards. Read on...

Coming Up In The February Online Hotel Business Review




Feature Focus
Social Media: Interacting with the Hotel Customer
Consider these astonishing numbers: 1.49 billion active monthly Facebook users. 1.1 billion active monthly YouTube users. 320 million active monthly Twitter users and nearly 400 million registered users on LinkedIn. 400 million active monthly Instagram users and 200 million active Google+ users. The power and reach of social media is an awesome force and it has transformed how hotels interact with their customers. In the past year, social media advertising spending increased 33.5% to nearly $24 billion dollars. Social networks are being utilized by hotels to reach more visitors, expand brand awareness, enhance brand reputation and to establish more direct and personal communication with their customers. Savvy hotel operators are adopting a comprehensive social media strategy, and there are several emerging trends to note. Video continues to be a powerful and influential element in social media marketing, with 70% of companies saying that it is their most effective marketing tool. Video generates a 62% higher engagement rate than photographs alone, and with new social sites like Meerkat and Periscope which offer live video streaming, those numbers will only increase. Sponsored content is another growing trend. Though advertorials have been around for decades, hotels are finding new ways to maximize the visibility of their content. Some are placing sponsored content on Facebook, or on influencer blogs. Another trend is the integration of a “Buy Now” button into social media websites. Customers will be able to make purchases without ever having to leave their favorite social sites. This development is a major convenience for customers and should also be an additional revenue source for hotels. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.