In today’s economy it is imperative that the revenue managers are well aware of the highly competitive arena that exist within the industry. Here are some guide lines that may be of help.
1. Think strategically: A well thought out, long term plan. The global economic downturn affected all of the markets. It took several years for prices to reach pre downturn levels. The industry has evolved, it got smarter, there are different demands, and different strategies. When business re bounds where will you be?
2. Analyze your revenue management: Not all properties require the same level of revenue optimization. Remember great resources are difficult to find and expensive to keep. Find the right match between the requirement and resource will benefit your bottom line. Determine the dynamics of the hotel that will drive the most revenue.
3. Organize effective Revenue management meetings: Don’t let revenue meetings end up being a report generating exercise. Considering the change in customer expectations and competitive pressure, regular revenue meetings play a vital role in adapting to critical changes. Forecasting, market performance, pricing, channel, reservation, front office all play a vital part.
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4. Don’t get involved in a price war: Be creative. Look at your options. Above all don’t drop prices, it has proven over and over again that it does not work.
5. Provide guidance to your sales team: Since the last recession there has been a usage and better software for the revenue manager to be alert and responsive to the market changes. These system will become even more sophisticated, but it can’t create demand where there is none. It becomes necessary to work very close with the sales team. Provide the proper guidance so as to have the most economic impact on your business.
6. Guidance to your marketing team: Improve the campaign that you are targeting. Provide promotional demand where you need it.
7. Manage your high volume accounts: Not all accounts are beneficial to your property. Understand cause of changes. Lower demand? Move to competitors?
8. Maintain price consistency: Perhaps the most important factor. Any price reduction must keep your long term plans in mind.” Hotels that price below their competitive sets have a lower RevPar, but do not gain any occupancy boost. Hotels that charge a price premium have a higher RevPar than their competitors but without reduction in occupancy.” I do believe that quote says it all, adhere to it.
9. Your competitors don’t underestimate them: Pay attention to the demand and price relationships. A reduction in price is a smoking mirror be mindful. Price the value of your property according to the value perceived, not by your comp set. Look at your channels, and segments.
10. Now sit back and analyze what you have done: are you positioned as to get the most for your product? If not why? What have you left out?
There is a lot more aspects for each of the steps outlined, but the basics are there. If you are a young Revenue Manger just getting your feet wet this will help guide you. This is worth repeating”Selling the right rooms and services at the right price and the right time to the right people” So have meetings with you team get their insight and opinions so as to get the best optimization of your property
