The Art of the Sellout
Let’s try to answer the question: “When is the best time to sell out”, and also butter some bread while we’re at it…
Have you been on a flight where the pilot 100% stuck the landing, and you barely even noticed you were no longer in the air?
Well, pilots have an expression for that: “Buttering the bread”.
I propose we steal this phrase because let’s be honest, it’s way too fun, and we as Revenue Managers need better lingo!
Think about it for a minute… what’s the best thing we’ve got?
Come on, we can do better!
When I was a Revenue Manager, I always thought of cleanly executing a sellout a lot like sticking a clean landing.
It was always a great feeling to set the hotel up for success, and the next morning check your reporting and getting that confirmation that you had hit 100% occupancy.
So here’s a thought experiment: consider all the factors pilots have to deal with, even during a routine landing: tailwinds, headwinds, runway conditions, talking to air traffic control, etc.
Just like pilots, Revenue Managers have a whole set of things we’re looking at too when we’re planning our approach for a perfect sellout…
Things like:
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Let’s say you get just one thing wrong: you underestimate your demand drivers, and don’t accurately forecast demand. Revenue Managers know the embarrassment of selling out 6 months in advance, or sweating it out, hitting the perfect sellout in the (figurative) eleventh hour thanks to a last-minute walk-in. So how do we avoid simply being pushed along by the whims of the market and having a rough landing?
Well, think of everything that we’re doing in the background to combat unpredictability: demand forecasting by market segment, cancellation forecasts, asking other Revenue Managers about their experiences with similar situations, reviewing historical data, watching our competitive set’s pricing strategies, etc.
This led me to ask a question that I naively thought I could answer in maybe an afternoon if I put my mind to it:
“What’s a foolproof sellout strategy we can use every time to make sure we hit 100%?”
Surely there has to be an ideal strategy, something like a “landing checklist” that Revenue Managers the world over can use to hit perfect sellouts more often?
Perhaps an ideal number of days before arrival to reach 100%, a fool-proof rate strategy, or perfect market mix percentage that will ensure a sellout every time.
With our mission in mind let’s start doing some research and see if we can do just that…
This multi-part series will highlight these different factors that Revenue Managers should consider when planning a perfect sellout strategy.
Along the way, I’ll showcase the different Lighthouse tools we use to uncover these kinds of findings, which are the same tools that you can use to determine the best plan of attack for your next sellout night!
So let's get straight into it with the first episode, Demand Drivers and the Booking Curve