News for the Hospitality Executive
by Marco Benvenuti, Co-Founder/Chief Analytics & Product Officer
May 6, 2013
As revenue managers, we’ve all been there: Someone inputs the wrong price, forgets to switch a third-party channel back on after a big block of group business cancels, or is slow to react to a significant change in demand.
Even though revenue management systems, channel management systems and other software, including Excel, can help drive hotel revenue management, human beings are still the ones ultimately responsible for pushing the right buttons and pulling the necessary levers.
Every few months, you read examples of hotels accidentally charging an unbelievably low rate. The most recent I saw was the 144-room luxury Metropolitan hotel in London taking £18 bookings for next Jan. 1-2, according to a tnooz story last month. Supposedly, more than 100 reservations were made at booking.com for those dates, and a quick check now reveals Jan. 1, 2014 is already sold out. The days before and after aren’t, but rates are approximately £400. Think about those losses!
Who knows how that happened, but I’ve seen similar situations firsthand.
The most common example is through old-fashioned operator error — “fat fingers” — when an employee might accidently load a $15 rate instead of $150 for an OTA channel. We got lucky, and caught the mistake through a manual check we did every day, but a number of lucky customers booked an incredibly cheap room, and eventually got it comp’ed, rather than us risk the story getting out about our property offering $15 rates.
Rather than why it happened, the question should be how to avoid costly mistakes -- or at least catch them before too much damage is done.
Channel management systems, central reservation systems or extranets can often be configured to prevent this, but you cannot count on them being fullproof - or that a failure will not occur across dozens or hundreds of distribution channels that are becoming more plentiful and complex to manage.
To address the problem, and other issues of concern to revenue managers, we have created Duetto Edge – which includes a proprietary alert system that spots these mistakes, whether they’re made from inside the hotel or externally at the OTA site . . . or in the fragile channel management space in between.
The first alert is activated if the total occupancy for any given period is two or more standard deviations from normal. The second is similar, but based on pickup: If during the most recent 1-day, 3-day, 7-day or 15-day period, any channel or yielding segment is getting significantly more or less action than is expected for any future day, the alert is activated.
Most important, when an alert is activated, you can find out immediately – via a notification that appears on your computer screen.
Both alerts could have caught the mistake in London, long before the hotel had booked 100 rooms a year in advance at £18 a night. An alert would have been triggered when Duetto Edge saw an unusually high pace of bookings for those dates. If by chance the bookings were only coming in one or two at a time over several days, the pickup alert may not have been triggered but if it continued like that and the occupancy climbed, Edge would have sounded the alarm.
In either case, the revenue manager or other property executives would see the alerts highlighted when they log into Duetto Edge. They’d also see them on their daily email digest or via SMS, which is something we will be deploying soon. The alerts are prioritized in order of importance, so the revenue manager who has limited time can dig into only the most serious issues. If there’s unusual pickup, the revenue manager can drill into individual reservations to identify the problem and would notice that $150 rates were being sold for just $15.
A number of other sophisticated and customizable alerts are being developed and will be rolled out soon – and we will be sharing details in the coming weeks.
With Duetto Edge, revenue managers can manage by exception rather than spending inordinate time reviewing average days. The system cues up the alerts in order of importance so revenue managers don’t have to go month to month looking for the days that need extra attention.
They get access to critical insights anytime and anywhere — the information is never more than a few clicks away.
About Duetto Research
Duetto Research (www.deuttoresearch.com) provides hospitality executives with cutting-edge solutions to optimize demand, maximize rate, and minimize cost. Powered by leading Silicon Valley technologists and hospitality industry veterans, Duetto is where innovation and insight meet – to help the hotel industry create new standards of efficiency and profitability, and re-think how revenue management is done.
About Duetto Edge
Duetto Edge delivers powerful tools hospitality executives need to achieve profit goals and understand demand and revenue channels better than ever before.
Among the unique benefits of Duetto Edge:
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For Duetto Research
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