A Penny for Each Time I Have Heard 'Revenue is Great, But Can't be Applied in my Hotel.'
By Julia Baquiast - Xotels
Monday, 28th February 2011
I would be rich by now if each time an hotelier told me 'Revenue Management is great, but can't be applied in my hotel', I would have received a penny! I am heavily disappointed when I meet an hotelier and I hear this sentence, because it is absolutely wrong!.

Revenue Management is applicable to all kind of hotels: small, big, city, resort, independent, chain hotels, business or leisure hotels… As long as every single day a hotel needs to get the most of its fixed capacity depending of the level of demand expected, you would leave money on the table not implementing some degree of revenue management.

In our daily environment we face lots of service companies that are applying their own revenue management: train companies, car rentals, cinemas, theaters, spas, golf clubs…

Once with one of my colleagues, which likes playing Bowling, we‘ve start thinking on how to implement Revenue Management for a Bowling center. As there is more demand on Friday night, Saturday and Sunday we need to put some restrictions on the number of players to increase the turnover. Wednesday is also a busy period but for teens and students, so we have to do a special pricing for them as well as for holiday periods. A bowling center has also its low demand period, and the issue is to displace the demand to Monday or Tuesday night with some bowling classes or bowling competitions… We went very creative…

So if a bowling center can apply Revenue Management, why can't it be done in your hotel?

Or do you simply not care about losing out on potential revenue

Revenue Management does not have to be complicated. Start with the Basics! First analyze your market and identify what's going on. Identify for the next 12 months, periods or days with strong and weak demand, this will be the first step of forecasting. As soon as you know what will be the level of demand you can expect, build your rate strategy and work on your distribution. When all has been planned correctly the daily management of your rates and inventory becomes easier.

Revenue Management will help hotels to work on the long run; it's where the money is. Stop working at 2 or 3 weeks time. Working 12 months ahead will make you more competitive with regards to your competitors and get clients that are booking in advance for your hotel. Did you already start loading the appropriate rates on all OTA for 2012? Did you already built your net rate grid for 2012 for Tour Operators?

I hope that hoteliers that still think revenue management can't be applied to their own business will take into consideration for a change how much they can increase their results by.

From our experience your REVPAR can be increased easily with 20%. But let's take it easy, I am sure you would be happy with 5% more sales...

Good luck and please never tell me again that Revenue Management can't be applied to your hotel!

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