News for the Hospitality Executive
Profit Optimization Is Everyone’s Job
|by Doug Kennedy, August 2008
Regardless of whether RevPAR and bottom-line profits are trending upwards or downwards in your hotel’s market, there’s no better time than the precious present to make profit optimization everyone’s job. Unfortunately too many hotels still think of profit optimization as being primarily the job function of a revenue manager, versus a process that virtually every associate can embrace every day. Yet there seems to be plenty of other hotels and resorts that have seen profit optimization evolve from a person into a process and eventually into an underlying operating philosophy for all hotel marketing and operations.
Regardless of how a dollar makes its way down the P&L report from the top-line to the bottom-line, it has the same impact in the end. So besides managing and optimizing revenue streams and distribution channels, profit optimization also involves generating new business and in a broader sense, also controlling costs. Here are some ways that various departments and associates can help increase sales, decrease distribution costs, and maximize efficiency in controlling operating expenses:
- Channel conversion. Many visitors to online travel agencies and third party websites also place a phone call directly to the hotel to double-check that the offer is the best rate; train your staff to convert these callers into direct bookings and save commissions of 18% - 30% or more where your distribution agreement allows. (Note: Where exclusive agreements are in place it is just as important to train your team how to politely explain why rates are available only through third-party partners.)Besides sharing these suggestions with your staff, make sure to solicit their own suggestions and input regarding ways to increase sales, minimize distribution fees, and reduce operational expenses. Sometimes the best and most innovative suggestions come from the frontline staff who are closest to the work itself yet all too often not asked for input.
Doug Kennedy, President
|Also See:||Hotel Lessons Learned Growing Up In Kennedy Craft Shop / Doug Kennedy / July 2008|
|Personalized Hospitality Excellence Still A Deliverable! / Doug Kennedy / June 2008|
|Real Conversations vs Rigid Scripting Increases Reservations Productivity / Doug Kennedy / May 2008|
|Hotel Lessons Learned From A Five-Star School Principal / Doug Kennedy / April 2008|
|Road Warrior Shares Tips On How Hotel Guests Can Minimize Environmental Impact / Doug Kennedy / March 2008|
|Right-Sized Staffing Ensures Front Desk Sales & Service Success / Doug Kennedy / December 2007|