Carol Verret Consulting 
and Training
Training Seminars
Feeding the Revenue Elephant
Hotel Revenue Management
Summer 2006
by Carol Verret, June 2006 

Hotel Revenues this summer are anticipated to be gargantuan – high demand and high rates.  What more could an hotelier ask? 

A lot!  Hoteliers who blindly accept the demand that comes their way at the rate they ask will never know how good it could have been had they fed the elephant of hotel revenue with guests that were not measure solely by rate but by value. 

Amitava Chatterhjee in the upcoming edition of Hospitality Upgrade has an excellent article that states, “…a 2% increase in customer retention is equivalent to a 10% reduction in costs.”   He goes on to say that “… hospitality enterprises (should) start measuring and tracking a guests profitability ” 

How much money are you leaving on the table?   How many of the customers that you get this summer at the rate you are asking will never return?  How many of them are not the demographic that will feed the revenue elephant in the future?  How much does it cost you when you squeeze out the high value customer for the ‘one night stand’ at a higher rate?  What is the cost of constantly appealing to those customers without the potential to return?

So what does this have to do with Revenue Management – everything!  Most revenue management proponents, (including me – see past articles on this subject) advocate measuring the value of a guest not just in terms of room rate or REVPAR but also in terms of potential for other profit centers such as F&B, the spa, other attractions within the hotel or facility. 

This is a revenue management function.  The more sophisticated revenue management systems can drill this down relatively easily.  For those of you who are doing it the ‘old fashioned way’ it isn’t impossible – just a bit more work. 

  • Capturing the Information.  This is a training issue with the front desk/reservations.   Many GMs say ‘I tell them to do that’ – there is a huge difference between ‘telling’ and ‘training’.  Email addresses offer a fast, cheap and easy way to cement guest relationships.  There are several points at which you can capture this information – ask at check in or check out or on a ‘permission’ box on your web site. 
  • Email Guest Comment Surveys.   This is a rationale for asking the guest for their email addresses upon check in or departure.   If you are not using this medium now, it is readily available through companies that perform this function or easily accomplished by someone who is relatively familiar with technology.  The studies indicate that guests are more likely to respond to email surveys than to a survey mailed to them (let’s see – fill it out, put in an envelope and mail – who knows where the mailboxes are anyway -- and for what benefit to the guest?)   The survey also contains a section where permission is given to receive occasional promotions from the guest.
  • Capturing the Identity of Guests Booked by the Distribution Systems.  Who are these people?  (This could get me in serious trouble with my friends at some of the larger portals – you know who they are.)  The guest that arrives and departs that has booked through a travel portal is invisible to the hotel in terms of market segment or demographics unless we capture the information at check in or check out.   If we can get them into our system, we can develop relationships with them. 
  • The Functionality of the PMS System.  Most PMS systems are capturing guest information that can then be sliced by demographics such as when they stayed, for how many nights, total bill at checkout, etc.  The problem is that many hotel GMs and DOSs aren’t aware of this or how to access it. This info can be use to target certain guest demographics at times of the year when they are most likely to be making reservations.  It can be used for all market segments and the promotions can be used for email postcards and flyers or mailings in the absence of email addresses. 
Many of you are now thinking that this involves CRM, Customer Relationship Mangement.  This is a term that either provokes the ‘glazed over eyes’ or total ‘brain lock’ for many hoteliers.  When I mention determining the ‘value of a guest’, many find it difficult to get their minds around it.   Most of you are now thinking, “It’s summer, I’m too busy to worry about this stuff”.  Capturing the information now will enable you to use it later 

Most franchises focus their efforts on their frequent guests for whom they are able to collect this information relatively easily.  However, there is a segment of guest, such as leisure, that may not be a member of the frequent guest program but whose business is valuable and can be targeted from the property level.  If you are waiting for the franchise to do all this work for you, you are missing the boat.

This is especially critical for independent hotels.  I work with many independents.  The CRM process is not difficult but needs to be thought out and become a part of the overall marketing and revenue management strategy. 

It is the most ‘valuable’ guests that feed the Revenue Management elephant most profitably.  The cost of CRM in feeding the elephant is far lower than the cost associated with most of the other reservation channels. 

Carol Verret Feeding the Elephant (South Africa, summer ’05)
(PS – Have fun and learn a lot at HITEC.  I wish I could be there with you and at HSMAI’s Revenue Management conference immediately following.  Due to prior commitments, I will be there in spirit!) 

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 To contact carol send her an email at or she can be reached by cell phone (303) 618-4065.

copyright © Carol Verret, 2002-2003 -2004 -2005 - 2006

Carol Verret, Consulting and Training
Carol Verret
5910 S. University #C-18, PMB 374
Greenwood Village, CO 80121
Telephone: (303) 618-4065
Web Site:
Also See: The "Tipping Point" - Identifying the Touch Points in Hotel Sales / Carol Verret / May 2006
The "Tipping Point" - Touch Points Make a Difference in Customer Service Training / Carol Verret / April 2006
Selling Up! Taking Group Room Revenue to a New Level / Carol Verret / February 2006
Revenue Management 2006; The Risks and Rewards / Carol Verret /January 2006 
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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