Revenue Management
Kelly  McGuire
  • Revenue Management
  • Price Fairness: How to maximize revenues without gouging the guest
  • It is clear that revenue management practices can help hotels increase revenue, but successful revenue management counts on consumers being willing to pay different prices for essentially the same product, based on the hotel’s expectation of demand. Hotel managers have good reason to be concerned about negative consumer reaction to demand-based pricing. Research has shown that consumers will punish firms that they perceive to be acting unfairly in their pricing strategies by refusing to patronize them in the future. So, how can hotels balance the risk of negative consumer reactions with the benefits of variable pricing? Read on...

Kelly  McGuire
  • Revenue Management
  • Better Pricing Decisions Leveraging Marketing Data and Analytics
  • Revenue management and marketing really are two sides of the same coin. Each department holds key pieces of information about demand that, when integrated, result in critical insight about demand patterns, product preferences and purchase behavior. Unfortunately, employees in these two closely related functions do not always work well together. Misaligned goals and poor communication result in situations where marketers, with a goal of generating demand, sends out discount promotions that dilute rates during peak periods. While revenue managers, trying to maximize revenue, close off promotional rates meant to encourage stays from the most loyal guests. These conflicting activities damage revenue performance and guest relationships. Read on...

Paul van Meerendonk
  • Revenue Management
  • Beyond Rooms and Rates: Packaging and Promoting Ancillary Revenue Streams
  • Progressive hoteliers spend significant time analyzing their properties and identify areas where revenue potential can be expanded through packaging a range of services. While areas such as food and beverage, spa facilities, conference facilities and even additional leisure options such as golf courses, make up a hotelier's overall 'Asset', often overlooked is the role hotel technology can play in helping to package and promote offerings that expand beyond room rates. Read on...

Jean Francois Mourier
  • Revenue Management
  • Five Revenue Lessons Hotels Can Learn From Wall Street
  • The hotel industry can benefit from the adoption of stock market principles in the area of revenue management. Because of the many similarities between the product sold by hotels and the products traded on various exchanges by financial professionals, many of the same theories and tenets apply. The industry must make some fundamental changes in the perception of its core product, and recognize that as a perishable, uniform item that is subject to the forces of supply and demand and the sale of which is difficult to forecast, rooms are as much like options and commodities as anything else. Once this change in perception occurs, stock market principles will find acceptance among revenue managers, general managers and owners in hotels across the world. Read on...

Ahmed Mahmoud
Motti  Tadmor
  • Revenue Management
  • Who Do I Trust - My Gut or My Revenue Management System?
  • While rate dilution provides a temporary occupancy fix for properties it has the potential to cause long-term damage to both the property and its reputation among consumers. Hotel management must remain proactive and work collaboratively across property teams to influence a property’s rate strategy and avoid the rate dilution war. When management works with all departments that could provide insight, including marketing, operations and sales, teams they can generate a proactive strategy based on in-depth market knowledge. While each hotel does not have an on-site revenue management team, every property does need a proactive, targeted plan. Read on...

Stan van Roij
  • Revenue Management
  • Thoughts on Maintaining Rates and Avoiding Price Wars
  • “How can I maintain rates in a downward market, and how can I avoid a price war?” is a question that is asked over and over again, and although plenty of answers have been given over the last few years by many people, the industry never ceases to ponder this dilemma. By no means do I claim to know it all, however in my experience there are a couple of simple, and in most cases, obvious things to keep in mind that do help to avoid a price war and that do help to maintain rate levels. Read on...

Scott Roby
  • Revenue Management
  • Be Proactive to Combat Rate Dilution
  • Rate dilution has continually plagued the hotel industry; it provides a temporary fix to increase occupancy and sometimes increases market share. However, it also has the potential to incur long-term damage to a property and its reputation among consumers. When properties take a reactive approach and lower rates without a larger strategy behind that discount, they run the risk of losing loyal customers willing to pay full price – price cannibalization. Hotel management must remain proactive and work collaboratively across property teams to influence the property’s rate strategy and avoid the rate dilution war. Following, note several best practices in property revenue management. Read on...

Kristie Dickinson
  • Revenue Management
  • Revenue Management for Owners... From the Outside, Looking In
  • Lodging experts have written numerous articles on revenue management aimed at addressing specific tactical issues on pricing, distribution and measuring results for those “inside” the operation. By contrast, this article is intended for the “outsider” – namely individuals closely vested in hotel performance, but not directly involved in daily operations…hotel Owners. While the art and science of revenue management should be left in the hands of the property management and asset management teams, here are some key considerations which may be helpful to hotel owners in evaluating the role and effectiveness of revenue management and understanding the influence it can have on hotel performance and overall asset value. Read on...

Bonnie Buckhiester
  • Revenue Management
  • Best Practices for Dealing with Price Wars
  • Dealing with price wars is clearly the nemesis of many hoteliers during a recession - with aggressive and often predatory pricing being deployed in many markets. The truth is that when demand wanes, 5-star hotels steal from 4-star, 4 from 3, 3 from 2, and so on. So what is a General Manager to do when price becomes the weapon of choice? Of course the very first move is to manipulate business mix, not price. But managing mix is foremost a strategic maneuver, and decisions must be made over longer horizons. If you're already embroiled in battle you need to start by asking 2 questions? "Are you selling your product for less than the customer is willing to pay?", and "Are you creating products that don't sell?" If the answer is "yes" to both - it's likely you have a pricing problem. Read on...

Chinmai Sharma
  • Revenue Management
  • Top 5 Things to Consider in Order to Maintain Rates and Avoid Price Wars
  • While we understand that pricing can create demand and move share within a competitive set of hotels, it is well documented that indiscriminate discounting will not create additional demand but dilute existing revenue streams. RevPAR variance at a hotel - both positive and negative - has a multiplier effect on its profitability and thus it's important to understand how much increased demand will you really need to offset the impact of an ADR drop. Here are a few steps you should consider and questions you should ask yourselves before jumping down the rate spiral in hope of capturing that elusive incremental demand. Read on...

Kelly  McGuire
  • Revenue Management
  • Private vs. Public Rates: How to Discount Without Starting a Price War
  • Broadcasting deeply discounted rates through widely visible channels is the best way to start a price war. Competitors have faster access to price information than ever before, and with improvements in technology allowing more rapid price changes throughout all channels, no sooner have you made a change, then you could find your market responding. As soon as that happens, you've lost your opportunity to steal market share and reap the volume benefits that were supposed to offset your discount. Read on...

Michael McCartan
  • Revenue Management
  • Pricing Data is Your Buoyancy Aide
  • Competitor rate data should not be about price wars but used to effectively position your product to optimize the value of your offering. Consumers are not just looking for cheaper deals; they want a good deal. Gathering the right business intelligence will help you manage your rates according to market conditions without affecting the value and prevent your rates from damaging important OTA relationships. In this article we explain how you can use pricing data to manage competitors and your contractual obligations to OTAs. Read on...

Christian  Koestler
  • Revenue Management
  • A Hotelier's Guide to Price Intelligence: What, Where, Why, When, How
  • The field of market price intelligence is powering a new era of revenue management in the hotel industry. At a time when the strategic importance of responsive rate management has never been greater, hoteliers are finding that monitoring hundreds -- or thousands -- of websites for the most accurate data is a monumental task that grows in complexity each day. Revenue and general managers must abandon inward-looking cost-plus rate models in favor of more rigorous outward-focused knowledge-based strategies such as price intelligence. This article reviews price intelligence as a best practice. Read on...

Cheryl Hawksworth
  • Revenue Management
  • The Issue of Tactical and Strategic Revenue Management
  • Hoteliers who lowered their room rates in an attempt to boost occupancy during the recent recession are finding that their actions are now acting as obstacles to their recovery. For future periods of soft demand, it is of the utmost importance to always align any tactics employed to the larger revenue management strategy of the hotel. There is a now an overwhelming acceptance in the industry that in order to truly maximize revenue in a coherent and effective way over the long term, revenue managers, and the discipline of revenue management itself, should fundamentally move beyond traditional, tactical revenue management, to embracing a strategic revenue management focus. Read on...

OCTOBER: Revenue Management: Technology and Big Data

Gary Isenberg

Hotel room night inventory is the hotel industry’s most precious commodity. Hotel revenue management has evolved into a complex and fragmented process. Today’s onsite revenue manager is influenced greatly by four competing forces, each armed with their own set of revenue goals and objectives -- as if there are virtually four individual revenue managers, each with its own distinct interests. So many divergent purposes oftentimes leading to conflicts that, if left unchecked, can significantly damper hotel revenues and profits. Read on...

Jon Higbie

For years, hotels have housed their Revenue Management systems on their premises. This was possible because data sets were huge but manageable, and required large but not overwhelming amounts of computing power. However, these on-premise systems are a thing of the past. In the era of Big Data, the cost of building and maintaining an extensive computing infrastructure is incredibly expensive. The solution – cloud computing. The cloud allows hotels to create innovative Revenue Management applications that deliver revenue uplift and customized guest experiences. Without the cloud, hotels risk remaining handcuffed to their current Revenue Management solutions – and falling behind competitors. Read on...

Jenna Smith

You do not have to be a hospitality professional to recognize the influx and impact of new technologies in the hotel industry. Guests are becoming familiar with using virtual room keys on their smartphones to check in, and online resources like review sites and online travel agencies (OTAs) continue to shape the way consumers make decisions and book rooms. Behind the scenes, sales and marketing professionals are using new tools to communicate with guests, enhance operational efficiencies, and improve service by addressing guests’ needs and solving problems quickly and with a minimum of disruption. Read on...

Yatish Nathraj

Technology is becoming an ever more growing part of the hospitality industry and it has helped us increase efficiency for guest check-inn, simplified the night audit process and now has the opportunity to increase our revenue production. These systems need hands on calibration to ensure they are optimized for your operations. As a manager you need to understand how these systems work and what kind of return on investment your business is getting. Although some of these systems maybe mistaken as a “set it and forget it” product, these highly sophisticated tools need local expert like you and your team to analysis the data it gives you and input new data requirements. Read on...

Coming Up In The November Online Hotel Business Review




{300x250.media}
Feature Focus
Architecture & Design: Authentic, Interactive and Immersive
If there is one dominant trend in the field of hotel architecture and design, it’s that travelers are demanding authentic, immersive and interactive experiences. This is especially true for Millennials but Baby Boomers are seeking out meaningful experiences as well. As a result, the development of immersive travel experiences - winery resorts, culinary resorts, resorts geared toward specific sports enthusiasts - will continue to expand. Another kind of immersive experience is an urban resort – one that provides all the elements you'd expect in a luxury resort, but urbanized. The urban resort hotel is designed as a staging area where the city itself provides all the amenities, and the hotel functions as a kind of sophisticated concierge service. Another trend is a re-thinking of the hotel lobby, which has evolved into an active social hub with flexible spaces for work and play, featuring cafe?s, bars, libraries, computer stations, game rooms, and more. The goal is to make this area as interactive as possible and to bring people together, making the space less of a traditional hotel lobby and more of a contemporary gathering place. This emphasis on the lobby has also had an associated effect on the size of hotel rooms – they are getting smaller. Since most activities are designed to take place in the lobby, there is less time spent in rooms which justifies their smaller design. Finally, the wellness and ecology movements are also having a major impact on design. The industry is actively adopting standards so that new structures are not only environmentally sustainable, but also promote optimum health and well- being for the travelers who will inhabit them. These are a few of the current trends in the fields of hotel architecture and design that will be examined in the November issue of the Hotel Business Review.