Revenue Management in an Independent Hotel
Revenue Management is a key element in driving profitability in your hotel.
To an industry outsider, the Revenue Manager in larger chains and corporate hotels might appear similar to a stockbroker, constantly looking at figures across multiple computer screens. Or obsessing over analysis tools that look like the cockpit of an airplane.
But in a small independent hotel, quite often that is very far from the case. As a management company that has traded for over 10 years, what we see far more regularly is a Revenue Manager who was promoted from being a very good Reservations Manager, or a Front Office Manager who "looks after the rates". Whilst these people are undoubtedly a great asset to your business, do they have the skills, knowledge and tools to drive revenue to the degree that it is required?
If your Revenue Management needs improvement, Premier Cru Hotels have 5 top tips for a good revenue strategy:
1. Rate Strategy
Having confidence in your rates is the first hurdle. Most hotels have a flexible pricing strategy nowadays (and if you don't you should!), however at Premier Cru we find that many hotels either lack the confidence to sell their "Rack" rate, or are too proud to sell at "Distressed". If you aren't going to use your outermost rates, then your rate strategy is wrong.
Premier Cru have industry insight, and years of knowledge to advise you on a rate strategy that works for you and the guest.
Reporting is everything. At Premier Cru we understand that every Revenue Manager has had one of those bad weeks where they got caught up in the rush of hotel life, and took their eye off the ball - not flexing the rates correctly or not opening availability when it should have been. So as a company we are always surprised when we meet hotels that do very little revenue reporting - that's not a bad week, that's a bad strategy!
Premier Cru has a toolkit of reporting strategies and templates to suit those with a lot of time and those with little time alike, we tailor make your procedures to suit each individual business.
3. Regular Revenue Meetings
Given that we now know that you need to have a good rate strategy, and regular reporting, the best way to use this information is to talk about it. Don't let your daily Business on the Books report be filed away without having been read, and don't forget to reward good days, or make a plan following bad days.
Make your meeting effective, no longer than an hour once a week is optimal. This is not a catch-up meeting where you dwell on the past three days' reports; that information should have been digested before the meeting. A Revenue Meeting should be a forum for ideas and planning, with action points for all attendees at the end.
Premier Cru work with a wide range of businesses, and have a meeting template to suit anything from a large corporate hotel to a small boutique.
4. Make your Revenue Strategy work with your Marketing Strategy
Many hotels treat Revenue, Sales and Marketing as three individual areas, and quite often there is even conflict amongst individuals in the departments. However Premier Cru has seen that the greatest advances are achieved when all three work together seamlessly.
5. The right tools for the job
Good team members are your most valuable assets, and they deserve the tools to do their jobs well. Good revenue management involves endless data, spreadsheets and constant analysis on an ever-revolving cycle. Premier Cru have found that time is lost when key team members are distracted by manual tasks, usually with the justification that "it doesn't take that long". But time is precious, and gone are the days when you can start updating your rates on a Monday, to get to the bottom of the list by Friday, ready to start the whole process again the next Monday morning. Hotels have to be reactive; rates and markets can change daily (if not hourly), and the big players are already way ahead of you! So invest in a decent PMS, make sure that your Booking Engine performs well, and please, please pay for a decent Channel Manager.
Premier Cru is a hotel management company with a team of industry experts, from Operations and Revenue Management to Sales, Marketing, Purchasing and much more. We have worked with a vast range of hotels from small country inns to Michelin Star restaurants and beyond. If any of the advice in the above article has sparked your interest, generated questions, or even hit a nerve, we would love to talk to you. Our services range from revenue management through to full management contracts.
Contact us on:
Gareth Pugh: 07711 259406
Iain Shelton: 07710 782188
Office: 0845 835 4592
Sign up for our newsletter
Sign up to our mailing list to hear the latest industry news, as well as our monthly tips and advice.