Why is revenue management critical to your success as an owner?

​

Revenue Management, expertly executed, is the lifeblood of a hotel owner’s profitability and success. Properly pricing your perishable inventory might seem simple, however, missing the right steps can cost an owner, hundreds, thousands, or more in profits. For example, you would not price a room the same for Super Bowl Sunday and Palm Sunday, unless the Palm Sunday hotel room happens to be in Jerusalem. Due to the complexity of inventory specialization and the diversity of distribution channels, it is critical that owners have an ongoing strategy for managing these intricacies.

 

Revenue Management has evolved into an all-encompassing science that optimizes group and transient rates, while considering a multiplicity of factors. These strategies should be practiced by the front desk, reservations, group sales and business travel sales, and to some degree, the banquets department.

 

Revenue Management consulting allows owners to leverage the depth of knowledge of highly experienced professionals who can identify opportunities, train, and implement a new playbook for property revenue managers.

​

 

Examples of basic revenue management opportunities that can erode profitability:

 

• “Set it and forget it” approach

• Collaborative weekly strategy review meetings

• Reactionary approach to changing market conditions

• Comparing the hotel and aligning strategy to an erroneous competitive set

• CRM/PMS knowledge and set up

• Seed data validation prior to accepting recommendation

• Proper positioning of property retail consistent with hotel’s value proposition

• Following common revenue management “myths” such as ending the price with $0.99

• Offering exclusive deals with OTA partners

• Leveraging proper revenue management yield tools to manage demand and offers

• Proper strategy for selling competitive packages or promotions

• Pricing opaque rates to garner the optimal mix of occupancy and ADR over a given period

• Understand the true lead time trends of various market segments

• Market leading LNR strategy that differentiates you and your hotel

• True understand the market perception of the property and adjusting strategy and or pricing to remedy

• Reviewing content across all platforms to ensure accuracy and promotional value