Today, most articles are full of advice: best practices, tips, tricks and information that will help you do your job better. But as useful as those tips can be, it can often be even more helpful to learn what NOT to do, especially when it comes to a field like revenue management where there are as many different opinions, as there are hotels.
So let’s get down to business. Here are five things NOT to do in revenue management.
DON’T Think That Your Customers Know Anything About Your Compset
When most revenue managers analyze the rates of their competition, they typically only compare their rates with the small number of hotels in their compset. This is a mistake. When potential guests search online to find a hotel for their upcoming trip, they don’t consider compsets. They search through all of the hotels within a certain star rating (or two!) within a destination. If revenue managers don’t think like their customers, and therefore, if they don’t provide rates that will appeal to customers’ needs, they will lose the booking to another property — and another revenue manager — who can.
DON’T Use Stagnant Rates
As you probably all know from reading my previous articles, I am a big, HUGE supporter of dynamic rates. Why? Because in today’s highly competitive and ever-changing marketplace, updating your prices in the online channel once a day is not nearly often enough. By consistently updating your rates in real-time as factors within the market change, your property will be able to secure as many bookings as possible, at the highest rate possible. Dynamic rates are the ONLY way to fully capitalize on the revenue-earning opportunity offered by the online channel.
DON’T Forget to Replenish your Inventory Online
Just like with rates, which need to be updated constantly, it is important that revenue managers are replenishing their online inventory immediately when it runs out. Especially during busy season, when an entire block of rooms could be booked in hours or even minutes, if you’re not replenishing your inventory on a regular basis, you’re losing valuable revenue
DON’T Overcomplicate Your Job
I’m sure that you’ve heard the phrase K.I.S.S., which stands for Keep It Simple Silly. As a revenue manager, because your job has so many very important responsibilities many of which are hugely time-consuming it’s important that you follow this rule of thumb. If you’ve ever heard the term Ounconstrained demand’, then you know what I’m talking about!
Your goal each day should be to minimize the busy work that can come along with the job endless reporting, meetings, etc. — so that you can focus on the activities that earn your property money. A good rule of thumb is to aim to spend 80% of your time on the functions that directly impact revenues and only 20% of your time on admin tasks.
DON’T Be Afraid of Technology
Revenue management technology was designed as a tool to help revenue managers be more effective and productive in their jobs, NOT replace them altogether. Revenue managers should be taking advantage of technology to manage the never-ending data analysis and automatic updating of rates and inventory in the online channel. Only by using sophisticated technology, will a revenue manager be able to be as efficient as possible, and therefore earn as much money as possible from each booking.
Check back next week for “What Not to Do in Revenue Management Part Two” which will examine the remaining sins of revenue management, and how you can avoid making the same mistakes.
About REVPAR GURU
REVPAR GURU provides hotels around the world with an alternative revenue management software system, designed to deliver maximum bookings and profits. As REVPAR GURU’s custom-designed Yield Dynamic Price Engine is the only real-time revenue management system available on the market, it meets the rapidly changing needs of hotels in a very demanding business environment. REVPAR GURU’s system offers dynamic rate optimization, real-time pricing, integrated internet and extranet yield channel management and GDS sales distribution, to increase a hotel’s RevPAR intelligently and effectively, while maintaining rate integrity and automated rate parity. Since 2004, REVPAR GURU’s software system has been used by hotels worldwide to increase occupancy and RevPAR.
Headquartered in Miami, Florida, additional information can be found at www.revparguru.com or by calling +1.786.478.3500.