November 2007 - Life used to be relatively simple for hotel revenue
managers � the daily disciplines were relatively straightforward � check
the reports, balance the inventory, check the channel contributions, review
fences and hurdles, etc., etc. In most hotels, the process
has become more complex and the disciplines are multiplying almost exponentially
due to the complexity prompted by the impact of Web 2.0 on the competitive
hotel environment.
As if that were not enough, the new PKF econometrics model that estimated
the impact on the industry of a potential economic recession was released
this past week. �A recently released analysis by PKF Hospitality
Research (PKF-HR) found that if an economic recession were to occur in
the United States during 2008 � 2009, it would result in a 6.1 percent
decline in rooms revenue for the U.S. lodging industry through 2010.�
Both of these developments have intensified the �habits� of revenue
managers at the property level and beyond. In many properties
the revenue manger is also the sharing the ecommerce role with sales and
marketing. Independent hotels that often don�t have resources
available to them that some of their franchise competitors do, will have
to stay on the cutting edge of both of these developments if they are to
be successful.
While a recession may or may not happen, the competitive impact of user
generated content or Web 2.0 on the hotel industry is a definite reality
that is not going away. If the hotel does not have an ecommerce
manager or a large sales department, the monitoring function of the hotel�s
online presence and ecommerce initiatives often falls to the revenue manager.
Highly successful revenue mangers are motivated by the challenges of
both opportunities. Some of the new Habits of those Highly Successful
Revenue Managers are:
-
Monitoring the hotel�s online presence. User generated
reviews sites are multiplying rapidly. As a recent survey showed,
the reviews play a larger role in the decision making process for the consumer
than price (Yahoo Travel Survey 08/07). How the hotel is presenting
to the travel community through the various sites upon which it appears
and is reviewed is critical. There are third party monitoring programs
at various price points and levels of complexity that can assist
in this but properties with small budgets can set Google alerts for the
property name so that every time something is posted on the internet about
the hotel, it is directed to the Revenue Manager�s Inbox. This
may be the �rawest� of data but it beats no data at all!
-
Monitoring all links to the property. A recent study
attempted to direct an online RFP through various property web sites and
found that nearly half of the links on the property web site for RFPs
either didn�t work or were directed to an email address that was no longer
valid. Links on various directories on which the property is
listed may also be old and directed to email addresses that are no longer
valid -- this was a finding in recent research for a client.
It would be nice to believe that the web master would check the links on
the web site but the reality is that it is not their job. People
leave the company but there is no audit of everywhere that links to their
email appeared in the hotel�s link strategy.
-
Managing the relationships with the OTAs. Expedia estimates
that for every dollar spent on this web site there is another dollar spent
on the hotel�s web site or other direct contact such as phone.
The implication of this is that the OTAs have now become hotel �search
engines� used by consumers to research the hotel options at their destinations.
Couple this with the fact that the OTAs now also have increasingly robust
review functionality, and their influence is growing. This makes
those Merchant Agreement agreements for exposure and page placement even
more important. However, merchant agreements proliferate in some
markets. This may prompt the OTAs to establish levels of Merchant
Agreements such as Gold, Silver or Bronze or some variation, in order to
manage the increasing demand for Merchant Agreements. It makes it
even more important to establish and maintain close relationships with
the Market Managers, ensure rate parity and explore opportunities for greater
exposure though packages, for example.
-
Contingency Revenue Management Strategy. No one,
not even PKF, can predict with any certainty the implications for the hotel
industry of the current �nervous� economic climate . Therefore,
smart Revenue Managers and Directors of Sales, for that matter, will take
the time to develop contingency plans in case of the worst possible case
scenario mentioned in the PKF study earlier. The contingency plan
should include market specific hotel intelligence as well as micro economic
information with regard to how vulnerable the local market is to downturns
in the various sectors of the national economy. The contingency
plan would include certain developments that would �trigger� pre determined
adjustments in the RM strategy. For example, if a current RFP account
announces production cutbacks or layoffs at a facility in the local market,
this triggers certain actions in the allocation of inventory and rates
given the anticipated reduction in that account�s room night production
at the hotel. It is far better to have a contingency plan that is
not needed than to need an alternate strategy and have to develop it at
the last minute when it may be too late.
The habits of highly successful revenue managers have become more complex
in just a short period of time. The truly good RMs will embrace the
change � those who fail to adapt to change risk the fate of all who
fail to �read� changes in the environment and adapt. Anyone remember
the dinosaurs?
Happy
Turkey Day! Carol Verret Consulting & Training also offers
Creating a Culture of Customer Service training for managers and associates.
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 [email protected]
or she can be reached by cell phone (303) 618-4065. View the Hotel
Sales Blog at www.hotelsalesblog.com
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