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There’s a lot to stay on top of when managing a hotel or rental property. Let us take care of the back of house, so you can keep the front running smoother than ever.
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What is Hotel Revenue Management
Data Driven Decisions
Hotel revenue management boils down to strategic selling. That is, it’s the process of using analytical data like pace, forecasting, room demand and market conditions to improve your revenue performance. Using this information to set rates and manage distribution helps a hotel sell the right room to the right guest, at the right rate, place, and time. So, how does data determine who that ‘right’ guest is? Furthermore, how do you know what the right rate, place, and time is?
First and foremost, hotel revenue management is not a perfect science. So, don’t let anyone tell you otherwise and understand that ‘right’ is often open to more than one interpretation. That said, when you start to pay attention to certain data, you will start to see when it’s a good time to raise rates (right time); which channel the sale is most likely to come in from (right place); how much you can raise the rate by (right rate); and finally, which ideal length of stay you want to sell through a given channel at a given rate (right guest).
How we set your revenue strategy
Ultimately, hotel revenue management is the practice of compiling and interpreting data, and then using a combination of those numbers together with your experience and often, gut feelings, to set a revenue strategy that will max revenue for whatever period you’re looking at. This is where we can help. Our analyses of your key performance indicators (KPIs) take both quantitative and qualitative details into consideration. Quantitative refers to your average daily rate (ADR), occupancy, and revenue per available room (RevPAR). Qualitative, on the other hand, is your brand strategy, market conditions and trends, and insights gained from past experiences. We research, analyze, and implement, and we do it all for a fraction of what it would cost you to employ a full-time Revenue Manager.
Who does revenue management Benefit?
Key stakeholders include the following people:
- Owners & GMs who want to improve their property’s overall revenue performance
- Reservations Managers who want to improve the efficiency of their department and convert more bookings to direct sales
- Sales Reps and Marketing Managers who want to align their sales and marketing initiatives with the property’s revenue targets
Key Parts of a Revenue Strategy
Pricing
Your hotel’s sales and marketing strategy – in fact, the overall guest experience – is the foundation of a successful revenue operation. For that reason, our boutique hotel revenue management services include a deep dive into your guest markets. We will help you identify who the right guest is and when they are most likely to book. As well, we’ll help pinpoint your optimal rate, that is the rate they are willing to pay for the unique experiences you deliver.
Distribution
Many small hotels update rates and availability manually, which can lead to overbookings or lost sales, and often, different rates on different sales channels. Not only is this inefficient, it can lead to bad guest experiences. That’s why one of the first things we will do is review your system set ups and optimize your distribution.
Inventory
Imagine working on a puzzle for hours, only to discover you are missing a piece. Perhaps you had intentions of displaying the finished product, and now you can’t without an eyesore. Now imagine that selling and assigning hotel rooms is like building a puzzle, and every unsold night is like a missing puzzle piece. These gap nights are not just eye sores though, they are missed opportunities to increase revenue. As eliminating gaps can add pure profit to a hotel’s bottom line, we keep this goal top of mind for your team.
Analysis
Analyzing sales performance helps you understand the market and stay on top of potential threats or opportunities. In short, it’s important to know your numbers and what they mean. Our hands-on coaching empowers you and or your team to create and implement a successful and sustainable revenue operation. Throughout, we will offer guidance and make recommendations to help drive informed sales, marketing, and revenue-maximizing decisions.
HAVE A QUESTION?
On The Blog
ON THE BLOG
Prove That Long-Term Revenue Pitch
In a recent post, I shared examples of when hotels should NOT maximize revenue. I was challenged to show proof of long-term revenue gains.
When NOT to Maximize Revenue
The goal is to maximize revenue, yes, but not at the expense of the relationship. Whether the relationship is with a tour operator, travel agent, or a direct guest, it takes precedence.
Your ‘Full House’ is a Call to Action
If your hotel is selling out early and often, there’s a good chance you’re leaving money on the table. It may be time to rethink pricing or implement a revenue strategy.