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.
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