Carol Verret Consulting 
and Training
Consulting
Training Seminars
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Revenue Management 2006
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The Risks and Rewards
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by Carol Verret, January 2006

I know that you are out there – the ones who will address that nagging worry in the back of their mind after the holiday hoopla is over – can we really achieve that budget in 2006? 

The answer is yes and no – there is no reward without risk. If ever there ever was a year with a little wiggle room for taking risks in your revenue management strategy, this is it. Your staff will be looking at you for your risk tolerance and they will follow your lead – what will it be?

I know a GM who took a big risk with a citywide convention and refused to accede to their demand for a huge rate reduction accompanied by assorted comps and, oh yes, then there were those sponsorships they were requesting. All of the other major players in his market had knuckled under and taken large blocks at greatly reduced rates. He chose not to.

His rationale was that he could maximize his rate and occupancy in displaced business by not acceding to demands that would have compromised his budget for that month. A month prior to the citywide group’s arrival, he didn’t have a lot of reservations, two weeks out he was still dead in the water. Panic began to set in but he knew his transient reservation window was very short lead. 

Reservations began trickling in and then came the deluge after the displaced reservations realized that his hotel was about the only option during that time period. At the end of the day, he filled his hotel for that period at a rate $12 higher than the comp set – need we tell you what it did for his REVPAR. His boss called him to congratulate him for making such a good call – but it could have gone the other way! 

There is a saying in the theatre if you want to be noticed move when everyone else is standing still, stand still if everyone else is moving. Being a contrarian is risky but has its rewards. Try the following with your staff –

  • Stop Filing Your Revenue Glass From the Bottom Up! Quote your higher rates first – you can always come down. There is a sentiment, outdated but still there, that we should reward our early reservations with a low rate – why? How many discounted reservations do you take well in advance of the arrival date that would have been willing to pay a higher rate? Take the risk – let your revenue manager know that it is all right to take a risk and adjust if demand patterns warrant it.
  • Quote Higher Group Rates. Let your sales people know that it is all right to hold the line in rate when negotiating. Teach them to sell the value and monitor their competition. If they lose one along the way don’t yell at them. Train them how to fill their sales funnel with higher revenue prospects so that they aren’t so dependent on that one piece of business. Let them know that some of those lower rated ‘old stand bys’ may need to go ‘bye bye’.
  • Give the Front Desk Clear Directives. Let the front desk know that they can hold the ground on rate and admit to you that a few people walked. Even if they go down with a few unoccupied rooms the first time or two, they will learn that it is okay to take calculated risks and they won’t get their wrists slapped over it. Both you and they will get better at building value and closing walk-ins at the right rate the more you practice. 
  • Encourage Your Staff in Creative Risk Taking! In all areas of the operation, encourage your staff in all departments to be creative in finding solutions. Some will work, others may not – but we learn more from our mistakes many times than from our successes! Taking a risk and succeeding is an incredible rush!
The real risk in ’06 is not to take the risk – to be conservative and do business the way you always have. Demand, rate tolerance and relative lack of new supply is providing the ‘perfect storm’ for creative revenue management solutions. We may not have this opportunity in 2007 as more supply comes into the market.

Go ahead – Go for it! Happy 2006! 
 




Carol Verret And Associates Consulting and Training offers training services and consulting in the areas of sales, revenue management and customer service primarily but not exclusively to the hospitality industry. To find out more about the company click on www.carolverret.com. To contact carol send her an email at carol@carolverret.com or she can be reached by cell phone (303) 618-4065.

copyright © Carol Verret, 2002-2003 -2004 -2005


 
Contact:
Carol Verret, Consulting and Training
Carol Verret
5910 S. University #C-18, PMB 374
Greenwood Village, CO 80121
Telephone: (303) 618-4065
carol@carolverret.com
Web Site: http://www.carolverret.com/
Email: carol@carolverret.com
Also See: Revenue Management and Group Sales - The Partnership Not the Disconnect / Carol Verret / November 2005
Habits of Highly Successful Hotel Sales People / Carol Verret / September 2005
Triple Witching Hour - The Marketing Plan, Revenue Management Strategy and RFPs for '06 / Carol Verret / August 2005
"Smile" is a Learned Behavior - Creating a Culture of Customer Service / Carol Verret / July 2005
Revenue Management Systems -- Considerations for Evaluation / Carol Verret / June 2005
Disconnect -- Aligning the Revenue Management and Sales Strategies / Carol Verret / May 2005
Independent Hotels & Resorts; Ride the Wave or Float with the Tide? / Carol Verret / March 2005
Hospitality Sales Training Companies Reach Across the Competitive Playing Field to Combine Live Seminar Expertise with  the Convenience of the Internet / Carol Verret / January 2005
Revenue Management - The Challenge for Hotel Sales / Carol Verret / January 2005
Hotel Sales Departments -- Issues in Processes and Functionality / Carol Verret / November 2004
The GM'S Role in Revenue Management / Carol Verret / October 2004
Transforming the Hotel Sales Organization; Alignment with the New Realities of Sales / Carol Verret / August 2004
The Revenue Management Strategy - The Pre-Plan Marketing Plan / Carol Verret / July 2004
Hotel Revenue Management this Summer - a Game of Skill, Art and Most of All Nerves / Carol Verett / May 2004
What Do Meeting Planners Want? Hotel Sales Managers Want to Know! / Carol Verret / May 2004
Revenue Management -- The Integration of Revenue Drivers / Carol Verret / March 2004
CYBER SALES -- Hotel Sales in an Internet World is the New Reality / Carol Verret / February 2004
The New Realities of Hotel Sales - Focus on Revenue Generation / Carol Verret / January 2004
Hotel Sales -- Innovation in the Face of Limitations / Carol Verret / November 2003
The Good News & the Bad News; Improving Economy = New Hotel Development / Carol Verret / October 2003
Leadership - General Managers Managing the Sales Process / Carol Verret  / October 2003
When the Crystal Ball is Cloudy; Marketing Plans for 2004 / Carol Verret / July 2003
Partnership of Sales and Technology; Using Tech Tools to "Sell" the Hotels / Carol Verret  / July 2003
Back to the Basics? The Basics of Hotel Sales Have Changed! / May 2003
Creating Sales "HUNTERS": The Skill Sets Required in the New Hotel Sales Environment / April 2003
Heightened Security Requires New Strategies in Hotels Sales / Carol Verret Consulting and Training / Mar 2003
Revenue Recovery - Building The ‘A’ Team in Sales / Carol Verret / January 2003
Contingency Marketing Plan – War In Iraq! / Carol Verret / November 2002
Playing the Rate Game - Positioning -- Positioning -- Positioning! / Carol Verret / October 2002
The Rate Game - Playing to Win / Carol Verret / October 2002
The Challenge of Marketing Independent Boutique Hotels / Carol Verett / August 2002
Hotel Sales in a Limited Service Environment - The Rules Have Changed / Carol Verett / August 2002
The General Manager’s Role in Sales -Chief Marketing Officer of the Hotel / Carol Verret / April 2002
100% Market Share Penetration is Not Good Enough / Carol Verett / January 2002
The Key to REVPAR Recovery –  New Business Development / Carol Verett / December  2001
Trash the 2002 Marketing Plan - And Just Start Over / Carol Verett / September 2001
How to Use Consultants Effectively –  A View From the Other Side  / Carol Verret / August 2001
How Soft Is Your Hotel's Economic Landing?  / Carol Verret / Aprl 2001
The ‘Value Proposition’: Marketing Yourself to Prospective Employees / Carol Verret / January 2001
Generation Y:  Motivating and Training a New Generation of Employees / Carol Verret / November  2000
Why Customer Service Seminars Don't Work / Carol Verret / October 2000
Creating a Culture of Customer Service / Carol Verret Consulting and Training / Sept 2000 
FAT, DUMB AND HAPPY – The Seasonal Boom and  Bust Cycle / Carol Verret / August 2000
Surf's Up - Ride the Wave or Miss the Boat -The Effective Use of Technology in Hotel Sales / Carol Verret / July 2000 
Measuring Effectiveness of  Hotel Sales Departments / Carol Verret / June 2000
Hotel Sales Training - The Need for Immediate Results / Carol Verret/ May 2000



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