Revenue Management – remembering the basics
Continuing with our series of content around helping hoteliers to cope and recover from Covid-19, we thought this week it would be helpful to remind ourselves of the basics. Sometimes, especially in times of crisis, there is a flurry of panic and plenty to think about – words like ‘recovery strategy’ dominate our language and the more basic principles of what we do might slip slightly to the wayside.
Putting revenue management in the limelight this week, we’re reminding ourselves of some of the basics that we think you should digest and consider – even if you know them already, it might still help to reassure yourself that all bases are covered.
First up – just to recap, what actually is revenue management?
It’s the strategic use of performance data, local market data, competitor rates, and other applied analytics to help predict consumer demand in order to optimize pricing and distribution in a way that maximizes revenue and profits.
Being a revenue manager, it’s likely that using multiple systems and processes comes second nature to you. Now that you potentially have a little more time and breathing space, it might not be a bad time to take stock, review all of those systems and processes, and question everything you’re using.
Chances are, as a revenue manager, you usually keep a fiercely close eye on your daily or weekly reports for numbers that give a unique insight into the inner workings of your property.
Without doing this, it’s very hard to make assumptions on guest and potential guest behavior – which ultimately will inform your overall strategy for selling rooms.
It might be good to ensure that you are covering the following in your regular reporting:
- Pick up reports
- Demand reports
- Forecast reports
- Channel segmentation
- Marketing segmentation
Looking at your reports now is as important as ever. You may be getting only a small volume of bookings, sure, but where are those bookings coming from? Who are they? This is crucial information to have going forward into the coming months, when you will be targeting the domestic market specifically.
It’s also the time to look deeper into your reports and decide: is there anything you were monitoring that you might not need to monitor anymore? Are there certain reports you need to tailor? Anything you need to add in that you might not have monitored previously? All of these questions should be addressed.
Take the time to also look at your channels and their delivery for stayed business. Look at the following:
- Midweek v weekend
- Source (country) of bookings
- Room type booked
- Cancellation rate per channel
- It’s crucial for you to have a clear picture on what each channel was actually producing
- Were the bookings for already high demand dates? (Dates you would have filled anyway)
- Are any particular room types very popular?
Your channel manager & PMS
When it comes to your channel manager, make sure you review all rate rules in place. As you start to set up new plans and implement new restrictions over the coming months, ensure everything is updated here.
If you can, ensure that you are storing all the right information in your PMS so that the data is being used better. You can work with your front office team on this – making sure they are inputting everything from guest’s reason for booking, country of origin, cancellation reason, etc. Without the right data, you won’t get the right reports.
We have consistently said this over the last few months, and wrote specifically about it last week – hold your room rates. You’ve worked hard to get your rate to where it is – you don’t want to cut it down too drastically, this will have a longer term negative impact. Things will go back to some form of ‘normal’ eventually. We advise you to hold on to it, mind your commissions and watch the OTAs. Just be clever about where your bookings are coming from.
As a revenue manager… how can you excel right now?
The same factors of the job are important now, namely the following:
Read your stats religiously
More than ever, reading up on and being keenly aware of your stats and data is crucial. Whatever is coming in might be minimal, but it’s important and will inform your strategy going forward into this new market.
Communication between all
Whether it’s with your GMs, your sales & marketing colleagues, your providers – open, consistent and frequent communication is a key component in getting through this tricky situation and coming out the other end in the best way we can. The situation has already caused enough confusion – communicating clearly and openly (which might be by more virtual means for now) will help everyone.
Keep yourself informed
It’s a difficult time for us all. Instead of getting overwhelmed, do what you’ve always done, as it is a natural part of your role – keep yourself learning, keep yourself informed.
There is so much information out there at the moment, and as things change so rapidly, we all need to keep our fingers on the pulse – from the official government announcements to the pockets of tips and advice in every area of the industry, advising on your strategy.
We’ve been holding weekly webinars and have launched a series of podcasts to help you cope and recover from Covid-19 – take a look at our page of resources here.