The Potential Additional Revenue From A Daily Quest For Just One More Booking. By Doug Kennedy Wednesday, 9th July 2014
In speaking with hotel revenue and marketing managers at the HSMAI Revenue Optimization Conference last month, it seems there is an ever increasing list of tasks grabbing their attention.
Analogous to what the military calls “mission creep,” revenue managers are now calling this “scope creep” as in scope of work.
Having been long ago tasked with managing online travel agencies since it’s such a key distribution channel, it seems that anything to do with a hotel’s online presence falls onto their agenda such as responding to each online guest review, rate-shopping for rate parity, and negotiating with online partners.
Their agendas also include managing quotes for group room rates and availability, along with an ever growing role in revenue optimization of other areas, such as meeting space and even yielding availability for recreational outlets.
So it is not surprising that too many revenue and marketing managers have not noticed that many of their frontline colleagues in hotel operations are overlooking the revenue optimization opportunities they see every day at the front desk.
This seems especially true at hotels that have outsourced hotel reservations to a call center, when managers then often overlook all of the other front desk revenue generating opportunities such as capturing walk-ins, securing return reservations from departing business travelers, channel-converting those guests who book through third parties to booking directly next time, maintaining rate fences at registration, and even properly welcoming after-hours leads for groups / functions when the sales department is closed.
Even hotels that routinely transfer calls to a brand or other CRO providers sometimes still receive calls from those who specifically want to speak directly with someone who is on-site. Perhaps this is because they have a special need or request; or perhaps it is because they perceive that this is the best way to get the best deal, as many recent travel articles and blog postings are telling them to do.
Depending on the operational model in place at your hotel, there could be many opportunities for your front desk colleagues to benefit from having a revenue generating mentality. It is nearly certain that each and every one of them can impact at least one more booking per shift, given a little more focus on the aforementioned opportunities.
So regardless of all of the other items on their agenda, today’s revenue and marketing managers need to remind their frontline colleagues of the important role they play and the significant opportunities they have to contribute to the daily RevPAR. Here is a model to help you explore the potential revenue from just one more booking per front desk colleague, per shift.
To calculate the “average” additional revenue potential per booking, multiply the average daily rate (ADR) by the average length of stay (ALS). For our model we will use $159 ADR and 1.5 night ALS for a total of $238.50 per booking.
Next, calculate how much more revenue that would be per front desk colleague, per work week, based on 5 shifts per week. Based on the sample model we have $238.50 x 5 = $1,192.50 per front desk colleague, per week.
Now calculate the additional revenue each colleague could generate based on a 50 work-week year (assuming two weeks off for vacation and holidays). In our model we have $1,192.50 x 50 weeks = $59,625.
Finally, calculate the total additional revenue potential on an annual basis for your hotel’s overall team. For our model we will use a small staff of just 5 total front desk colleagues. $59,625 x 5 Agents = $298.125 revenue potential.
If your hotel has a higher ADR and/or a longer ALS, the revenue is that much higher. Also, there is an opportunity to get more than one more booking per day at most hotels. Yet this simple exercise alone can help revenue and marketing managers to get the attention of their frontline colleagues in hotel operations and get everyone to come onboard the revenue optimization team.
Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry. Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades.
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