From who gets to that responsibility and issues related to the strategy itself, to prioritize channels revenue, Jesper Johansen, director of Michel's & Taylor Managed Hotel, reveals the five most common mistakes that even make the best revenue managers and, most importantly, how to avoid them.
First mistake: There is a misconception that only revenue managers need to be trained in this method. This idea usually come from the management team of the hotel, but can have negative consequences for the results of the whole company.
Tip: For those who sit in this case, revenue managers are not islands. In fact, they need the support of the entire company to effectively implement the necessary strategies. The better we understand this strategic line all team members, from the top to the base of the organization, the more they will make it their own and support to drive business.
Error 2: Relying on one or two accounts or distribution channels may leave the hotel overly exposed to circumstances beyond the control of revenue manager and keep sales teams engaged in negotiations variable rates.
Tip: Whenever possible, the volume of each account and each distribution channel should be controlled both retrospectively and in the future. Thus allowing the hotel to keep the best balance between the number of accounts and revenue channels and gives the manager greater control.
Error 3: A change of strategy is always essential, but a drastic change and if it is over in a short period of time could be fatal. For example, changing a strategy based on occupancy rates to another can cause a steep fall in occupancy and, as a result, a decrease in RevPar (revenue per available room) in the short and medium term.
Tip: It is imperative not to apply too many actions at the same time, it further difficult to assess the success of each individual change.
Error 4: The continuous technological advances in revenue management have made it easy to become dependent on their systems. Although this type of system analyzes trends and patterns reserve to a greater degree than most leaders in revenue, obviously take no human intuition nor a general market intelligence. For example, a single event may be programmed to substantially change the demand pattern for a period of time.
Tip: Currently a leading revenue must keep abreast of local news and, in fact, relate inside and outside the industry to acquire a vision of local demand changes, using it to implement strategies of yield and price.
Error 5: The rooms generally contribute between 60% and 70% to the income of a hotel, so this flow is the main priority of the revenue manager. A common mistake, however, believe that maximizing the rooms will solve any problems with other sources of income such as food and beverages.
Tip: The hotels food and beverage make a priority they tend to be more successful in targeting the premium market in terms of total revenues. The best way is to use KPI (Key Performance Indicators or Performance, for its acronym in English) as revenue per available seat time in the restaurant. Beverage turn a key part of the weekly or monthly meetings of business strategy can also improve the revenue stream.
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| Revenue management: Five errors to avoid |
Tip: For those who sit in this case, revenue managers are not islands. In fact, they need the support of the entire company to effectively implement the necessary strategies. The better we understand this strategic line all team members, from the top to the base of the organization, the more they will make it their own and support to drive business.
Error 2: Relying on one or two accounts or distribution channels may leave the hotel overly exposed to circumstances beyond the control of revenue manager and keep sales teams engaged in negotiations variable rates.
Tip: Whenever possible, the volume of each account and each distribution channel should be controlled both retrospectively and in the future. Thus allowing the hotel to keep the best balance between the number of accounts and revenue channels and gives the manager greater control.
Error 3: A change of strategy is always essential, but a drastic change and if it is over in a short period of time could be fatal. For example, changing a strategy based on occupancy rates to another can cause a steep fall in occupancy and, as a result, a decrease in RevPar (revenue per available room) in the short and medium term.
Tip: It is imperative not to apply too many actions at the same time, it further difficult to assess the success of each individual change.
Error 4: The continuous technological advances in revenue management have made it easy to become dependent on their systems. Although this type of system analyzes trends and patterns reserve to a greater degree than most leaders in revenue, obviously take no human intuition nor a general market intelligence. For example, a single event may be programmed to substantially change the demand pattern for a period of time.
Tip: Currently a leading revenue must keep abreast of local news and, in fact, relate inside and outside the industry to acquire a vision of local demand changes, using it to implement strategies of yield and price.
Error 5: The rooms generally contribute between 60% and 70% to the income of a hotel, so this flow is the main priority of the revenue manager. A common mistake, however, believe that maximizing the rooms will solve any problems with other sources of income such as food and beverages.
Tip: The hotels food and beverage make a priority they tend to be more successful in targeting the premium market in terms of total revenues. The best way is to use KPI (Key Performance Indicators or Performance, for its acronym in English) as revenue per available seat time in the restaurant. Beverage turn a key part of the weekly or monthly meetings of business strategy can also improve the revenue stream.
