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  Forward Thinking About Sales Revenue

By Cindy Estis Green

Hotel management teams have spent enough time reducing payroll, improving purchasing practices and cutting back on frills to lower costs. The next challenge is to increase revenue and manage it for continuous profit growth.

To work well, a revenue management system requires automation, which is new to some hospitality industry marketing directors. Components of this automated system include:

• An integrated combination of marketing planning.
• Yield management and forecasting.
• A customer satisfaction monitor.
• Pricing diagnostics.
• A robust marketing database.

A strong believer in such integrated, easy-to-use marketing solutions is Robin Kirk, vice president/general manager of the Hershey Resort Group in Hershey, Pennsylvania.

"Today, we are at an interim phase, waiting to bridge the manual systems to the seamless integrated marketing systems of tomorrow," says Kirk, "Guest profiles, reservation trends, stay information - all these analyses will be joined under one marketing system."

Kirk says he doesn't want more information - he wants to make better use of what he has in a system that is easy to use and understand. "The easier it is for me to manipulate my marketing plan, my yield tools, and my customer database, the more I will use it to better effect."

The marketing director of a 150-room hotel brings many functions together in what he calls a "revenue master." The marketing planning system is used as the springboard to all marketing actions - advertising, tradeshows, pricing - since it is the master plan to create all revenue.

During the year, the marketing director conducts several price shops of the competition. He meticulously gathers the data, recording the time and date of each call and then stores the information in individual property files. Customer satisfaction reports are kept in a separate file, building a database of guest histories and inquiries.

The database can be used by marketing directors to make decisions about direct-mail campaigns.

Conversion statistics are reviewed quarterly to see how many reservations are generated by a magazine's response program. As managers implement these marketing action programs, the marketing planning system is updated with completion dates and comparisons of budgeted versus actual revenues. Because the updates are regular, data entry input time is minimal. Results always are shown in easy-to--generate graphs and charts.

The marketing team also utilizes a yield management system to track demand patterns. When a gap appears in business volume, the marketing director is prompted to kick in a promotion campaign derived from previously collected information about guest profiles and demand. Data about future bookings is useful, as well. With such information, a marketing team can decide which rates and programs should be made available to maximize demand.

When used in tandem with the quality analysis provided by the customer satisfaction monitor, a price shop helps the marketing director establish viable rates. This price diagnosis is conducted quarterly; ensures that rates are in line with the marketplace. If rates are out of line, then the property's yield management system will not be sound.

Over time, the procedure becomes a routine. Each year when the marketing plan is due, the marketing director simply switches on the "revenue master" and reviews a few screens, all the historical data, all the statistics have been updated by the automated system so it requires only a brief review.

As a result, the marketing director has more time to concentrate on important matters such as marketing initiatives.

We are moving to the future, says Ron Drake, director of marketing at the Waldorf-Astoria in New York. "Marketers will require technology that is quick, easy to use and allows immediate implementation of results. We can't spend days analyzing reams of print outs - its not what marketing directors are good at.

The next generation of technology will be reasonably priced, require little training, and instantly point out key issues for the marketing decision maker, Drake explains.

"As quickly as the greengrocer of days gone by could look at his competitor on the next corner and see he was selling tomatoes at 11 cents and we are selling the same for 14 cents - we have to use technology to provide the same speedy useful information.' Drake says.

As the hospitality industry moves into the next century, the development of a true revenue system will be the difference between success and failure. This system of management should not be looked upon as a luxury, but as an instrument for survival.
 

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