| March 2008
�Everyone repeat after me: "I will not cut prices nor panic sell because
it does not stimulate incremental demand and only serves to drive down
prices." (Jeff Weinstein, Editor, Hotels Magazine, February 08) Jeff
has given us the mantra that all GMs, Revenue Managers and Directors of
Sales should repeat every morning.
While most analysts have continued to be bullish on revenue increases
of at least 4% in 2008, that was before the employment numbers began to
slide. PKF, in its January research article indicated that although
the industry was well positioned to weather the storm, there was one caveat.
�What will keep the economy buoyant, as well as the lodging industry, is
the continued growth in employment. Historically, we have seen a
strong correlation between changes in employment and lodging demand,� Woodworth
observed. Unfortunately, the assumption of a continuing employment
growth turned out to be short lived as the latest two government indicators
showed significantly slippage in this area.
The erosion in the economy has been relatively rapid. A survey of over
1600 meeting planners indicated that for only 37% of them were their
meeting plans for 08 were unaffected by the economy. (MeetingNews
on MiMegasite February 26, 2008)
Okay, disposable income upon which leisure travel is dependent is shaky
, the continuing credit crunch is impacting corporate travel and
now the meetings market, what is a revenue manager to do to stop the bleeding
and stimulate demand if not cut rate?
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Monitor Changes to Market Segment Activity Daily. This should
go without saying but many daily flash reports do not carry lines that
compare daily activity year over year by market segment or month over month
or YTD by market segment. Reports that include percentages of occupancy
by market segment are a graphic way to detect downturns. This is
an �early warning� signal that will allow you to take action before the
slippage becomes worse.
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Manipulate the Rate Structure � don�t lower it! Closely
monitor inventory and rate on the OTAs. Open discounts to more room
types during periods of low demand. Participate in promotions with
the OTAs until you reach the goals of the promotion. Close inventory
to lower rated rooms when demand warrants it. Train the reservations
staff to close each reservation by skillfully offering room type options
at different price points if that�s what it takes to convert the call.
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Evaluate Channel Distribution. When the revenue management
strategy was first developed last fall, what were some of the distribution
channels that were not included due to high commissions, relatively low
production, etc? A high commission on some revenue may be better
than no commission on unsold rooms. Were the Opaque channels abandoned
as requiring too deep a discount? A discount on an opaque channel
is not a lower rate structure but a way to expose inventory to markets
that you may not have exposed the hotel to in the past. In both of
these scenarios, you control the inventory.
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Dynamic Packaging. Packaging options on the hotel website,
distribution channels and channels such as TravelZoo provide an opportunity
to expose your hotel, generate incremental revenue and �disguise�
the rate within the package. Packaging on the hotel�s web site is
the cheapest and easiest way to generate incremental business but you have
to drive your customers and potential customers to the site through effective
SEO (Search Engine Optimization) and CRM initiatives.
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Monitor the Hotel�s Online Presence. Especially in difficult
times it I more imperative than ever to monitor the hotel�s online presence.
Pet peeve, make sure that the links work everywhere you are listed.
I logged onto a CVB site recently and four of the seven hotels whose links
I clicked didn�t work. You can�t have an online presence unless you
are �present�. There are tools that can assist you in this that can
make this process easy and give you the info to make good decisions.
The Avalon Buzz Report among others makes monitoring your online presence
and that of the competition easy. These reports can also expose opportunities
to fill gaps in demand with ecommerce initiatives.
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Correct Deficiencies. If your hotel presence online monitoring
tool uncovers areas where you are not in rate parity, correct immediately.
As well, there may be some links on sites that were enabled years ago that
no one was aware of and are therefore unattended. These can have
erroneous information and rates. I discovered this with
a simple search for an independent hotel client. The hotel was offering
an NFL special on an obscure site that no one at the property was aware
of.
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Respond to Critical Online Reviews. Respond with a measured
response to any online review as to how the deficiency has been corrected
and or how a situation surrounding a less than optimal guest experience
occurred. Ensure that there are no areas of the hotel that
you would not like to see in pictures or videos posted on TripAdvisor.
One client took the response thing to a whole new level and even responded
to positive reviews with a Thank You response!
Diligence and creativity are the hallmarks of crafting a contingency revenue
management strategy and for many of you the time to implement a contingency
plan is here. I suggest one more thing to implement at your stand
up meeting each morning with the GM and DOS. Prior to analyzing the
numbers and starting the day, repeat Jeff Weinstein�s mantra, in unison
� �I will not cut prices!�
Join us in San Diego April 4 for a revenue generation seminar open to
all hospitality sales professionals. For more information on the
I Hate Cold Calls � Web 2.0 program Click
Here
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. Visit www.hotelsalesblog.com.
 Carol
Verret and Associates is offering a series of public hotel sales seminars
nationwide this year in response to growing demand from the hotel community.
For more information on where they are to be held or how your hotel or
management company can sponsor one, email Carol at [email protected]
or call (303) 618-4065.
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. Visit www.hotelsalesblog.com
copyright © Carol Verret, 2002-2003 -2004 -2005 - 2006 - 2007
- 2008 |
