THREATS TO HOTELIERS’ REVENUE & PROFITABILITY: TIME & TIMING

PART THREE: "Timing: Another Threat for Hoteliers"

PART ONE: "Trends & Insights to Consumer Behavior that Impact Revenue & Profitability"

PART TWO: "Time: A Constant Threat for Hotel Revenue"

PART THREE: "Timing: Another Threat for Hoteliers"

PART FOUR: "The Solution - Revenue Management & Revenue Intelligence Systems"

WHAT’S IN IT FOR YOU & KEY TAKEAWAYS

Gain a Revenue Intelligence perspective on the Threats of Time & Timing; how they impact Hoteliers’ revenue and bottom line and what can help to overcome these challenges and succeed.

By reading all 4 articles, you will gain insights to:

• Why current Travellers' behavior increases market unpredictability and how a Hotel’s Value varies in Time?
• Why Timing is an essential factor, to avoid losing revenue and how to take full advantage of revenue maximization opportunities?
• What are the 3 Upgrades Hoteliers can make to Save Time, Manage Uncertainty and Make Smarter Decisions that optimize revenue and profitability?

Also, at the end of PART FOUR, there is a SPECIAL OFFER CODE for you!

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PART THREE: "Timing: Another Threat for Hoteliers"

For Hoteliers timing is crucial, more than ever before.  

Selling at the Right Price at the Right Time has always been a condition for revenue optimization.

What has changed today, is that hoteliers need to be able to react faster than ever before, to the changing conditions in their market.

Competing effectively and making the most out of any market situation is required for making a positive impact to the Hotel’s performance and the bottom line.

To manage uncertainty and respond to unpredictable market conditions, Hoteliers need to upgrade three very important capabilities:

1. Market Awareness
2. Analytical Skills
3. Reaction time

UPGRADE #1 - MARKET AWARENESS

For Hoteliers, after choosing the Competitors they believe they should be monitoring, it is essential to find a way to validate frequently their Comp Set choices. 

Accommodation supplier changes in the market and changes in travellers behavior have an impact on the true Competition for each Hotel.

Monitoring the prices of the right Competitors is crucial.

Using the shopped rates from unvalidated Competitors affects Forecasting projections and prevents Hoteliers from determining the Right Prices they should be selling that can produce the optimum results they want to see.

Here are a few of the most important things that Hoteliers need to be constantly aware, 24/7 and for 365 days into the future, from external sources:

• What is the Daily Demand in my market, according to the number of searches for stays made on Online & Offline sources, such as Booking.com, Expedia and Tour Operators?
• What Events are happening in my market daily?
• What is my Hotel’s and my Competition’s page ranking on Booking.com daily?
• What is my Competition’s Pricing daily, with information about any applicable minimum stay restrictions?
• How does my Hotel’s Pricing for each room type and rate plan compare to my Competition’s Pricing for relevant room types?
• What are my Competition’s major price changes in the next 365 days I should pay attention to?
• How aggressive are my Competition’s Promotions?
• Is my Hotel, more attractive or less attractive than my Competition for the segments I want to attract (Singles, Couples, Families, Groups, Business)?
• What is my Hotel’s Value as perceived from my guests’ point of view compared to my Competition?
• What is my Hotel’s and my Competition’s Online Reputation score in every area of operations?

UPGRADE #2 ANALYTICAL SKILLS

The first requirement for analyzing data is to have the right data to analyze.

It’s essential that the Hotel uses a Property Management System (PMS) where extensive reservations data is entered and stored.

Every Hotel is unique. Depending on the needs and the types of travellers each Hotel wants to attract, it is essential to track the booking behavior of the various Market Segments and have them properly setup in the PMS.

Tracking each Segment’s booking behavior is important, so that the Hotel can target them and offer the Right Product (Hotel Experience) that matches their needs and budget.

 For the Analytical Skills Upgrade, Hoteliers need Powerful Statistics & Report generating tools that can generate various types of reports, such as:

1. BUSINESS MIX REPORTS

 The Business Mix Reports provide a comparative analysis of each Segment’s production during any Check-in Period to the same period Last Year.

WHAT’ S IN IT FOR YOU

These reports are important for always being aware of the contribution of each segment in the Hotel’s Revenue performance. They also provide an understanding of the Business Mix and how it contributes to the Hotel’s revenue, so that smart strategic decisions can be made to improve the bottom line.  

 A few of the things Hoteliers can discover with this report are:

• How does the performance of the Hotel at any period this year compare to the same period Last Year, per segment, source, channel, rate plan code or nationality?
• How does the performance of the Hotel at any period in the future compare to the same period Last Year?
• How does a Month’s performance this year compare to the Previous month?
• Which Segment is performing better and by how much?
• Which Segment is underperforming and by how much?
• Which Segment is producing more than the desired % of revenue, in the Business Mix and is hurting the Hotel’s profitability?

2. PICK UP REPORTS

The Pick-up Reports help analyze the booking pace and behavior of each segment.

WHAT’ S IN IT FOR YOU

These reports provide a valuable understanding of how many room nights come in and out and when per segment. They are important for making intelligent projections about what can be expected and when, so that Hoteliers can make smart decisions at the right time.

A few of the things Hoteliers can discover with this report are:

• How many days prior to arrival of the day I’m reviewing, does each segment pick up bookings?
• When do I get cancellations for each day of arrival and from which channels?
• Is there a trend I’m noticing in the cancellations I get?
• Can I recover the lost revenue from the cancellations in time?

3. BOOKING PACE REPORTS

The Booking Pace Reports provide a comparative analysis of Segment bookings pick-up during any Reservation Period, for any Check in Period.

WHAT’ S IN IT FOR YOU

These reports are important for always being aware of how well each segment is performing and for making smart decisions that will minimize any loss of business early and maximize revenue and profits at time the Hotel is overperforming.

A few of the things Hoteliers can discover with this report are:

During a specific Reservation Period how may room nights were picked up by segment, for a specific Check-in Period and how does it compare to the same period Last Year?

• Which Segment is performing better and by how much?
• Which Segment is underperforming and by how much?
• Which Segment is producing more than the desired % of revenue in my Business Mix and is hurting the Hotel’s profitability?

UPGRADE #3 REACTION TIME

Without a quick response time, even having upgraded Market Awareness and Analytical Skills, the Hotel’s performance will always come short of the optimum levels of revenue and profitability it can reach.

Reacting quickly is crucial at any one time that a Hotelier does a performance review, for 2 main reasons:

1.Hotels have days where they are underperforming compared to last year.

If the underperforming days are identified early enough, there may be enough time to act and turn things around. Acting early also offers the advantage to make any necessary adjustments that will be required due to changing conditions. This will also help to stay ahead of the competition and gain a competitive advantage in the market.

2. Hotels have days where they are performing better compared to last year.

If the Hotel is performing better than last year, Hoteliers can take full advantage of the opportunity to maximize revenue and profitability.

Reacting quickly requires that all the information from the Market Awareness Upgrade and the Analytical Skills Upgrade are combined with the right mix of Revenue Management expertise and Technology.

Researching, collecting, processing and analyzing all the required data for revenue optimization need to be done continuously, with real-time updates of all the changing variables inside and outside of the Hotel, 24/7 and for 365 days into the future.

This of course is not humanly possible, however many hours or how fast anyone can work.

All this requires a system that delivers accurate, reliable and actionable Hotel Revenue Intelligence.

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If you found this article interesting or you would like to share your thoughts on current challenges Hotel Professionals face in Revenue Management, feel free to leave a comment.

We may all learn something from your experience and from each other.