This Week’s Article by Guest Author Amin Himani, Senior Manager, Revenue Strategy at Coast Hotels Corporate Office in Vancouver, BC
This is a great article on revenue management and it’s also very timely.
I had the pleasure of having Amin as a student recently in my Hospitality Financial Leadership course at Royal Roads University.
Enjoy the read.
David
Revenue Management for Recovery
By: Amin Himani
Emerging Trends – What to Expect
This year more than ever, recognizing the discipline of Revenue Management in our industry must transcend into Revenue Strategy will be crucial for success. While navigating the unpredictable travel patterns in 2021, consider that the traditional pace, competitive sets, and value-proposition identified historically to be altered and a need to examine the implications of the pandemic on each market segment and its defining attributes is required. What this means is relying on the systems and tools which help analyze patterns and recommend pricing may no longer provide the most optimal rates until they are re-calibrated. We learned in 2020 the impact of Covid-19 on the consumers’ ability and willingness to travel and for the minimal room night production that materialized, had displayed shortened lead-times and negatively affected ADRs due to heightened competition. To best strategize for recovery, monitoring pickup behavior to detect new trends which emerge and applying innovative retention tactics based on this analysis will captivate audiences and improve conversion ratios.
Revenue Management Software & Technology – How to Prepare
Revenue Management Systems have several inputs for their algorithm to determine optimal pricing, one key factor being historical pace. The monitor window which the system focuses on should be carefully reviewed with your provider as the multitude of cancellations and purchasing behavior of 2020 may negatively impact future forecasts. Knowing which data to reference for pace comparison and what to override, requires a critical analysis of date ranges set for each segment, to ensure its relevance and to help clip any outliers. Manually adjusting the short-term expected demand as you obtain travel advisory information will provide accuracy by accelerating the learning process for the automation tool. This way, the system is weighting criteria on the pick-up analysis for production generated in 2021 to improve price recommendations and forecasting. A review of rate shopping tools which gather competitor pricing and comparative positioning information will also need revision as competitors revamp inclusions and upgrade costs to enhance their value-proposition.
Demographic vs. Behavioral Segmentation – Who to Target
Consumers are searching for credible content, with a clear indication of the hotel’s offering to differentiate from its competitors. We understand the purchasing journey has several stages, but at each opportunity, staying consistent with the message and focusing on the key feature/offer throughout and developing a marketing campaign to encompass this value can create a purposeful target audience. Creating a specific rate plan to observe the response of distinct opens, click-through percentages and conversion ratios associated with the promotion to track progress by channel, will evolve traditional demographic segmentation into behavioral segmentation. As well, an opportunity to assemble a relevant database, based on buyer preferences will give rise to a new niche consumer.
Remaining Dynamic – When to Discount
As we face the uncertainty in the market, remaining dynamic with offers will help analyze on the changing consumer behavior. A/B testing different promotions by adjusting discounts based on length of stay or advanced booking periods can showcase where to apply the deepened promotions improve conversion. This insight is also readily available in the OTA extranets and should be frequented regularly to monitor the market data on page visits/purchases by location, comparisons on mobile/weekend/promotional share, and information on properties that have won bookings from you. Additional tactics to apply in these channels can include brand-wide value add agreements for Egencia guests or other OTA business travelers, and the removal of any fences imposed by non-cancellable policies.
Tracking channel production, specifically for meta-search conversion statistics can guide marketing efforts on where to promote exclusive offer. As an example, using a one-time promotional code with a limited expiration period for a fixed discount amount when booking direct can help retain guests shopping your brand website and create a sense of urgency and exclusivity.
This is also an opportune time to increase membership into your loyalty program by offering a complimentary status match or even a status upgrade. Provided it is a conditional offer contingent on a new upcoming reservation, it would auto upgrade the member to the next tier level during the identified need period as a promotional tactic. The cost in the next category may still be less than that of capturing the guest via indirect channels and having to pay a commission. As well, the sense of pride of being recognized with the upgraded status can help promote loyalty and maintaining the status would require continued participation in the membership program.
Taking advantage of communicating offers via pre-arrival emails is another tactic to deploy for generating incremental revenue opportunities, by highlighting room category upgrades at a discounted cost. It also allows the incentive to be displayed after the initial purchase, giving the guest time to reconsider whereas they may have been price sensitive during the time of booking. If the technology permits, applying this variable price modeling to other amenities such as discounted parking or F&B credits to also promote in the pre-arrival can entice guests to increase spend on upcoming arrivals.
At Hotel Financial Coach I help hotel leaders and teams with financial leadership coaching, webinars and workshops. Learning and applying the necessary financial leadership skills is the fast track to greater career success and increased personal prosperity. I significantly improve individual and team results with a proven return on investment.
Click on the image above to learn more about my video course.
Complimentary Discovery Call – https://hotelfinancialcoach.com//hotelfinancialcoach.com//calendly.com/hotelfinancialcoach/discovery
Be sure to check out my other services on the links below.
Stay at Home or Work – Online Workshops
The 3 Month 1-1 Financial Leadership Mentoring Program
Strategic Hospitality Financial Leadership Workshops
415 696 9593 – Cell or Text
Read a Story About How I Helped a Client
Give the coach a call today and let’s get going!
If you would like a copy of the following send me an email at
-
Financial Leadership Recipe F TAR W
Visit my website today for a copy of my FREE guidebook
The Seven Secrets to Create a Financially Engaged Leadership Team in Your Hotel
www.hotelfinancialcoach.com