Hotel Industry Trends - Yield Management

Revenue Management Should Mean Planning and Action at Every Type and Size Hotel (Part 2 of 2)

Revenue Management Should Mean Planning and Action at Every Type and Size Hotel (Part 1 of 2)

With the year’s most anticipated off-peak season looming on the horizon, hotels are hard at work thinking up ways to attract more guests this holiday season. Expedia Partner Services Group, the division created to give hotels a central point of contact for offering their properties on the company’s portfolio of online travel sites including Expedia®, Hotels.com® and Hotwire®, today released tips for maintaining demand during even the most challenging periods.

A study published in the November 2011 issue of the Cornell Hospitality Quarterly shows that guests still use a variety of channels to book a hotel room - even though the internet is the largest of those channels.

Although 2011 has provided a quicker rebound in terms of hotel occupancy and overall RevPAR, most hotels are still looking for ways to further increase their ADR. One great place to start looking is your hotel’s front desk.

IN-DEPTH: In times of economic uncertainty where demand drops and becomes more unpredictable, the travel industry sees much more pressure on prices. Revenue Managers seem to still follow too easily the principle of dropping price to generate more demand, says Sebastian Kuritke, director of Revenue Management, Avis Europe.

IN-DEPTH: The group-buying flash sale model for travel is a marketing promotion primarily towards a given market at a given time – so the price should be in relation to how big the given market is and how many potential customers are reached through the promotion and how long it lasts, says Gregory Linn, Director - Hotel & Travel Europe, Groupon.

IN-DEPTH: Among all the developments from the recent past, the ones related to price-sensitivity modelling are probably the most significant in re-defining revenue management (RM), says Pieter Dorhout, Founder, Pieter Dorhout Consulting

The CHR has also posted a new spreadsheet-based tool called the 'Hotel Competitor Analysis Tool (H-CAT),' which was developed by Cathy A. Enz and Gary M. Thompson.

IN-DEPTH: There is definitely a lot of value in accurately predicting demand at every price level for hotels, rather than simply assuming that the past will repeat itself, says Frederic Deschamps, Vice President Global Revenue Optimization, Carlson Hotels Worldwide. A forecast of demand to come at every price level gives the RM area a “sand box” where different rate structures and distribution strategies can be tested.