Industry Turning Around?

What you are seeing above is for the first time in ages that Luxury and Upper Upscale Chain Scales have seen a Year over Year Occupancy Increase! On strong Occupancy, 69.1% and 71.8% respectively.

Industry Turning Around?? Lets hope so!

Revenue Management for Independent Hotels

Revenue Management for Independent Hotels

As I recently learned from the EyeForTravel conference, the Big Boys (Yeah you Hilton, Marriott, Hyatt etc.) have the advantages in automating Revenue Management features. There are umpteen different automated Revenue Management toys and tools out there these days, and without the backing of an army of team members, how can you sort through what is best for the Independents, how can they keep pace?

In an interesting interview from John Enright, Executive Director - Revenue Account Management, Preferred Hotel Group on HospitalityNet

John explains - "Small companies and independent hotel chains refer to lack of resources and a limited budget to invest in high-end technology as major challenges associated with revenue management. Key executives in such organizations manage several roles simultaneously.

They oversee all revenue divisions, including sales, marketing, e-commerce, revenue and reservations. They need to ensure that these departments are communicating and working together so that revenue can be maximized across the company. On the other hand, large hotel chains have more money to invest in technology and people, so their roles within the revenue division are more defined."

As someone who works for an Independent hotel chain I can personally testify to the truth of these statements(While I do disagree with some of the rest of his interview...), and it really requires a much more personal touch from the Revenue Managers. Working in a smaller scale does have it's advantages however, there is no one size fits all method as far as Revenue Management goes, everyone is a unique and new situation. The Roller Skating championships in Lincoln Nebraska is just never quite the same as the Outdoor Retailer's convention in Salt Lake City. While both provide huge compression in their markets, the cancellations for the SLC convention are through the roof and can be anticipated at almost a 10% of total reservations, where the Roller Skating if you get over-booked you're in trouble.

While every other day I read about another new Revenue Management product coming on board, this time with the perfect algorithm for accounting for all unconstrained demand generators, shifts in market segmentation etc. There are still some things that the Independents have advantages.

"Enright pointed out that smaller organizations are likely to be more nimble and may have less barriers for expeditious adaptation to new strategies in a rapidly changing marketplace."

The nimble and the quick still have a chance in this market, in 2010 the Year of the Travel Deal, don't forget about the little guys, they're still out there kicking, scratching and biting their way into the travel industry and looking for any advantages they can find.

John Enright is the Executive Director of Revenue Account Management for Preferred Hotel Group.

BTN Reports: Sabre Sees Disappointing September Bookings

Title says it all:
Sabre Sees Disappointing September Bookings

---Not good news as many analysts were claiming that the final 4 months of this year will really determine how the economy will affect 2010's travel numbers as a whole. As we all know September and progressing into the final Quarter of the year is when heavy RFP Season sets in, and rates are quoted and set for 2010. If the perception of the industry is still disappointing, rates will be down, leading of course to Hotel RevPAR's dropping.

Seth Harris reports for BTN Online that - "Sabre's air and hotel booking data from last month indicated little overall improvement in travel demand, as they were relatively flat, year over year, from last September's economic meltdown, which brought U.S. corporate travel to a near standstill, according to the company's top executives.
September usually is a good indicator of the corporate travel industry's performance as it is the first month of the shoulder season in which business travel traditionally increases following the summer months."

As all of us Hoteliers know, 2010 was a tough year with how Labor Day was situated as well as Religious holidays, and hopefully this was part of the reasoning's for which why September did not pick-up as many were hoping.

As actual numbers flow in from the Hotels we will keep a close eye on the most recent results, as the upcoming months will be our biggest indicators to forecasting (and budgeting) 2010.

Here's to an increasing RevPAR Q4!

Collette Vacations on Revenue Management & Pricing in Current Economy

Continuing on our subject from EyeForTravel Session 1 on "Adapt & Update Your Revenue Management & Pricing Strategy to Profit in the Current Economic Climate".
Jeff Roy, Director of Air Revenue Management from Collette Vacations brought us some great information from some of the other side, the Air Travel side which is basically a direct flow through to Hospitality Revenue Management.

The highlight I pulled from Jeff's address was this "Discounting may not stimulate demand, but it can, and will affect Market Share."

Jeff really touched on how every Revenue Manager's first reply to the infamous "What do you think about discounting?" Question, will always reply with "Discounting does not create demand!" Basically, this mentality is BS, every one of them will say that to your face, then we all watch our Competitors and Market's rate's just dive and the rate war begins. The key thing to remember is that discounting done inproperly will result in Long-Term rate loss, importance in proper fencing should never be underestimated.
Here are some strategies Jeff suggested in fencing and providing value instead of straight discounts:

• Booking Incentives: Using Pre-Pay and Extended Booking Windows to fence discounts
• Best Rate Guarantee- Rate Change Guarantee's
• Door to Door pick up shuttle services
• Various Value Adds: Internet, Meal-Plan, Drink Coupons etc.

In this difficult time, forecasting has been one of the hardest things to do, Jeff has experienced success by breaking his forecasting into different channels. Such as forecasting Internet bookings versus call-in bookings and repeat customers.
They also have established Short and Long term goals to help keep their teams motivated. Long Term goals to keep the team from panicking due to the current economy, and focused on remembering that the downturn is not permanent. The Short Term goals are to keep the team motivated in the current times and maximizing that which they still are getting now.

The absolute best measure for success in the downturn is Market Share coming out of the downturn. The validity of your pricing in the new economy can be determined by your actions in the downturn.

Do you Chase Profits or Revenue?