Revenue Management
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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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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…
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Five simple ways to boost your hotel’s OTA revenue
Not ranking, but conversion rate - you don't have to be on page one. Improve your conversion rate regardless of which page you are on. Leverage geographic strengths - for example, Booking excels in Europe and the Middle East, whereas Agoda excels in Asia. Expedia is best positioned to bring in business from the United States. Take advantage of this. Room types by channel - for example, Booking outperforms Agoda in driving higher room category bookings. Expedia falls somewhere in the middle. Make up for the cancellation rate - for example, Booking has the highest cancellation rate of all. More than half of all bookings are canceled. Try to get…
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GMs/Revenue leaders, here are some key questions to ask your Distribution/E-Commerce Manager.
Nowadays, most hotels generate 60-80% of their revenue through online channels. It is critical for all relevant team members to cover all bases.➡️ What online channel grew the most in the last 30 days, and why?➡️ What are our conversion rates on the top three OTAs, and what factors are driving their growth/decrease/stagnation?➡️ What has been the most successful promotional campaign/offer in the last 30 days, and why?➡️ What key trends have you noticed in the last three months, such as ADR changes, guest nationality movement, and channel shifts?➡️ What do you want the Revenue Manager/Director to do to help you improve your numbers?➡️ What assistance and resources do you…
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How do you deal with third-party rates on OTAs?
Most OTAs do not want to give anyone else a pricing advantage. According to their data, it is the most important decision factor. They will pull rates from third parties to make the smallest of margins because accepting one more booking has practically zero additional cost. The hotels can either face them head-on or choose to ignore them. The tactics listed below are ordered from most effective to least effective. Completely discontinue the issuance of wholesale contracts. Only sell dynamic rates, whether through OTA or bed banks. Limit allotments to wholesale partners, including bed banks, to reduce the proportion. Fight with OTAs to cut off third-party inventory. Restriction on wholesale…
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Five times, promotions on OTAs are working against your property
Most hotels feel like they have to offer deals on OTAs. It is critical to be strategic with these. The promotions are bad for your hotel when No incremental revenue - your overall revenue from that OTA remains flat Revenue disappears when promotion is turned off - you gain no additional momentum. Guests are more difficult to convert to direct channel - you are attracting die-hard OTA customers. Better ROI elsewhere - additional promotion distribution costs are higher than with other OTAs or direct channels. Forgot a long-term promotion - forgotten promotions (on extranets) are often the cause of rate parity problems. I've always said that pricing is more important…
