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Five Mistakes Hotels Make with Competitive Set
Competitive benchmarking is an invaluable tool. I've seen it go wrong in a variety of settings. The following are the top five. Anchoring price at a fixed position: Always pricing exactly x amount below or above a competitor. Alternatively, set the price exactly between competitors A and B. Not looking beyond the official comp set: On OTAs and Google/Maps, an entirely different set of competitors may be taking business away from you. Not looking at extranet for who they are or not looking at “Similar hotels nearby” is a mistake. Pressured into picking a wrong competitive set: Owners and top executives may put pressure on hotels to choose a competitive…
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Digital Marketing Managers are from Venus, and Revenue Managers from Mars
Here is a cheat sheet for digital marketing managers. If you want to know what your revenue manager means, this is it. Rate hurdle Minimum order value Group ceiling Maximum order quantity (specific product) Average daily rate (ADR) Average order value Average length of stay (ALOS) Average quantity Segments Sell channel categories Revenue per available room (RevPAR) Average revenue (per store) Total revenue per available room (TrevPAR) Total revenue per (available store) Gross operating profit per available room (GOP PAR) Gross profit per (available store) Net revenue per available room (NRevPAR) Net profit per (available store) Revenue generation index (RGI) Market (click) share Market penetration index (MPI) Market share ranking …
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Revenue Managers are from Mars, and Digital Marketing Managers from Venus
Here is a cheat sheet for revenue managers. This is what your digital marketing team or agency means when they talk. Prospecting 🟰 Demand generationImpressions 🟰 InfluencingWebsite visits 🟰 Direct guests (potential)Engagement 🟰 Tentative (guests)Bounce rate 🟰 WashBooking funnel 🟰 Sales process (online)Conversion rate 🟰 Pricing effectivenessConversion window 🟰 Lead timeCPA (Cost per acquisition) 🟰 Distribution costGeotargeting 🟰 POS (Point of Sale)One way to learn something new is to find a way to link it to something you already know.What would you like to add to this list?
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Five hotel jobs (mostly commercial) that will disappear in the next five years
⭕ (Director/Manager) Sales/Sales & MarketingWhy: Because the majority of business has moved online. Traditional DOS/Ms can only contribute 10-20% of (offline) business.Indicators: Rather than DOS/Ms, more hotels are hiring well-rounded commercial leaders.The way forward is to expand into the dynamic rate world, managing OTAs and bed banks while also bringing revenue management skills to the table. Alternately, specialize in MICE, corporate, series, and group business.⭕ Revenue ManagementWhy: Revenue management systems are becoming more sophisticated and affordable. AI will even be able to address shocks caused by rapid trends or strategy changes.Indicators: Global brands no longer employ this position at the property level. Clusters are also being used by more properties.…
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The Growing Disparity between Guest experiences at Home and in Hotels
Do I need to provide a statistic to show how digitalization accelerated during and after the pandemic? Consider your own smartphone usage and the number of tasks you completed on it before and after the pandemic.So this is what your guests have become accustomed to.👉🏼 They can order food from the comfort of their own homes by using an app.👉🏼 Users can use shopping apps to order almost any product and have it delivered to their home.👉🏼 They have instant access to any type of entertainment.👉🏼 The majority of apps learn about the user and provide personalized recommendations.👉🏼 Their friends, as well as Google, Alexa, and Siri, respond immediately to…
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Guest Messaging is the New Review Response
Although messaging is common in the vacation rental industry, hotels do not take it as seriously. There are hotels that make sure to respond to all reviews, but many questions from various platforms go unanswered. This is a huge missed opportunity. You receive messages from: Social media platforms such as Facebook and Instagram Google Maps/ Business Profile Line, Whatsapp, WeChat, and other instant messaging apps OTA extranets Your website or app All of these will assist you in: Solving guest doubts Generate leads Upsell Cross sell Reduce the number of cancellations Convert them to direct customers Fine-tune the content on your website, OTAs and booking engine I've already…
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Obsession, not aspiration, drives direct bookings. Which one is yours?
Obsession, not aspiration, drives the direct bookings. Which one is yours?During my best years, we were able to get close to 40% of online business direct. Some properties even surpassed the 50%-60% mark. Of course, OTAs had an upper hand during some years, but direct was always the single largest channel. Isn't that good for a small regional chain?My decision-making has always been guided by the following principles.👉🏼 The direct channel is the most important of all.👉🏼 The proportion of direct business validates the strength of my brand and strategies.👉🏼 Unless I'm constantly looking for new ways to get more direct business, my job isn't worth it.👉🏼 Never stop promoting…
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How messy is your hotel’s distribution strategy?
How messy is your hotel’s distribution strategy?I like to break it down into the components shown in this diagram. 🟢 Full control: double down on these and get them right. No compromises here. 🟡 Partial control: understand your limitations, then double down on the rest. ⛔ No control: good to know. It is as simple or as complex as you want it to be. How would you describe your property’s distribution strategy?
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What distinguishes top revenue managers?
Revenue management is an important part of a larger commercial strategy that I helped to manage. I've interviewed and trained dozens of revenue executives in digital and CRM strategies. More than half of the distribution/e-commerce managers I hired are now in senior revenue positions across the region. Here is what the best and brightest have in common.They are aware that it is 20% numbers and 80% people. They dedicate more time to training, lobbying, persuading, and learning from various stakeholders.They know that the revenue management system will do most of the hard work, but the systems may not handle major shifts in strategies and trends. The system must be constantly…
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Rate reduction is not always a bad idea. Please hear me out.
It's fashionable to say, "Once you dump your rates, it'll take months or years to get them back up." Senior executives don't want hotels to play the volume game, and for many owners, a high rate level is a source of pride. Whatever the reasons for this attitude, I've seen it play out in ugly ways at hotels.They artificially raise online prices while selling super low rates to offline agents and groups. I've also been asked about ways to secretly discount OTAs without affecting public rates. Even properties under global chains are not immune to this.1️⃣ I've seen too many hotels keep their prices high, especially in the most visible…
