Revenue Management in Current Economic Climate

Adapt & Update Your Revenue Management & Pricing Strategy to Profit in the Current Economic Climate

Day 1: Meeting #1 from:
Sharon Duffy, VP Revenue Management Hilton Hotels Corporation

Sharon addressed the crowd on a multitude of topics for Revenue Management in the current economy, here were some of the key aspects I gathered from her talk.

**Key Point in addressing the current economy: “Formerly people’s perception was driven by the media, but in the current recession everyone knows someone who is out of a job or in financial hardship. It’s Personal now.”

Pricing Integrity:
Rate and Price integrity should be a top priority right now, teaching your customers to trust your Best Rate Guarantee.
Do not erode your own pricing with discounting, discounts will and do happen, but should include fencing and should NEVER erode your Best Available Rate.
Rate Integrity is one of the best ways to ensure direct bookings and get Repeat Guests, and repeat guests is the goal of our business, they are the core of our business and the cheapest source.

**Keep in mind that the downturn is not permanent!

• Ensure everything that costs can be tracked and ROI’s can be deducted.
• Opaque and Contract business is the nature of the industry right now, inventory is wide open to these outlets and should be explored.
• Know your break-even point to occupy a room.
• Understand your Pace for all of your Market Segments
• Group pace is very behind, Advance Purchase rates are very popular and helping pace. More and more hotels are now opening up to Govt. business.
• Accurate forecasting is imperative in a downtown, to be accurate may need to update daily and really understand short term trends.
• In any market you’re only as good as your dumbest competitor, we can’t all just blindly chase to be the lowest rate in the market.
• It is most important to be the best Value and hold rate integrity rather than to be the best Rate.

Not only should you be tracking and Forecasting your own hotel’s recovery, you should be analyzing and forecasting your market’s recovery. (Hotelligence reports, and Smith Travel) The problem right now is that no one is willing to believe it’s as bad as what it really is. It doesn’t help at all to say its rosy when it simply is not. Historical data at this point is very difficult to use, instead of strictly using Historical, attempt to combine it with a % off of current trending.

Understand what makes your product the one to choose – What differentiates you from your competitors and makes you the best choice for your customer. Sometimes you’re not always the best choice for EVERY customer, find the one’s whose niche you fit and make your hotel perfect for them.

Notes from Eye for Travel's 2009 North Americian Summit

I recently had the pleasure of attending the 2009 North American Travel & Distribution Summit held this past week in Chicago. I took lots of notes but I don't want to bore you all with them all at once.

Here are my top 8 items pulled from the conference:

1.) You MUST always approach your hotel from the customer's perspective. Remove the blinders and look at things from the guests perspective. If you don't you don't you will always be stuck in your old mindset.

2.) If you negotiate on price alone the price will never be low enough. You must stress the value your property brings to the table.

3.) Never ask a guest "have you stayed with us before?" You should know the answer to that question already!

4.) Apart from groceries, customers go to the Internet first before purchasing a product. Plan your marketing strategy accordingly!

5.) When given the chance, customers prefer to book directly with your brand due to perceived flexibility and options.

6.) To encourage bookings through direct channels, hotels should build strong loyalty programs and invest in comprehensive SEO and SEM marketing efforts.

7.) OTA's get first time customers in the door for new brands. They may book directly later and become loyal customers. According to a joint research project by Cornell University & Expedia, for every booking via Expedia 2 bookings are sent to your website. The "billboard effect."

8.) OTA's offer international distribution and significant marketing budgets which can supplement a hotel's marketing budget when times are lean. Small and independent hotels must ride the back of this "800 lb gorilla."

I hope you enjoyed this and I will post more as I have time to further digest all of the fantastic information. Also, if you attended this conference I would love to hear about what you took away for the conference.

Cheers to a RevPAR building day!

EyeForTravel Musings and Thoughts

So after a successful trip to EyeForTravel in Chicago, (what a great city.) I've got quite a bit to share, I'll be updating in the following days with commentary and updates I have from all of the individual meetings I was able to attend.

On a quick side note, to entertain you in the mean-time.

One of the highlights of my trip was learning of this little start-up from a great guy I got to meet.
Roman Peskin who is starting up iNNtelligenz, a Pace/Market Vision/Market Analysis tool.

http://www.inntelligenz.com/