Revenue Management

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Revenue Management

• The Trust/Desires Way

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What is Revenue Management?

• The process of understanding, anticipating and
  influencing consumer behavior in order to
  maximize revenue or profits from a fixed
  perishable resource(such as airline seats or
  hotel room reservations)

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What is Revenue Management?
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Revenue Managers need to find?
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The Right Balance
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In other words
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Hotel Industry Nowadays
All Hoteliers struggle with the same issues

• Increase of Competition
• Constant increase of Special Offers/Discounts
• Increase of Distribution Channels
• Increase of Price Transparency
• Decrease on time to respond and to react

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Customers Nowadays

• 80 of travelers make their decisions online
  after comparing different offers
• Have more knowledge due to the information that
  can be found on the internet
• Spend less nights away from home
• Stay at less expensive hotels
• Take more advantage of off-season pricing

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Our Revenue Management Mission Statement

• To develop and implement flexible reservations,
  yield, pricing, inventory, and sales strategies
  while maintaining an excellent price/value
  relationship and operating within each
  Franchises/Desires Hotels pricing and
  positioning philosophy.

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Revenue Management Philosophy

• To be the revenue share leader within our market
  and/or consistently drive share away from our
  competition .
• This is measured through Revpar Index (100),
  Revpar Index Change (0) and Market Share/Price
  Elasticity Graph

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Revenue Management Philosophy

• Our strategy will always be flexible contingent
  upon supply/demand forces, price and overall
  market conditions.
• Rule of thumb when occupancy is
• lt70 drive occupancy thru reduced rates
• 70 ltgt85 manage market mix thru
  restrictions and/or rate fences drive both
  occupancy and rate
• gt85 maximize/drive rate
• This allows flexibility within the different
  franchise/distribution systems.

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Basic Pricing Philosophies

• Adjust rates based on relative strength of
  demand.
• All negotiated (corp., consortia) accounts should
  have a sound price/volume relationship based on
  your demand levels.
• Try not to spread discounts among your qualified
  rates, you may be leaving needed dollars on the
  table.
• When possible, all discount rates should be
  qualified (AAA, AARP, Govt) or fenced ( LOS,
  advance purchase, pre-paid).
• When possible, weekday, weekend, and day of week
  pricing should be used.

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The Three Ps

• Three important keys to any successful Revenue
  Management Strategy.
• Products
• Processes
• People

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Products

• Revenue Management Systems (IDEAS, ONE YIELD,
  RMS)
• Property Management Systems
• CRS, GDS, Internet Systems
• Sales Automation Systems (Hotel Sales Pro,
  Daylight)
• Channel Management Systems ( EZ Yield, Channel
  Manager)
• Hotelligence Reports
• Competitive rate shopping on-line service (Rate
  View, Rate Tiger)
• Star Reports
• Trust/Desires REVMAX spreadsheets

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Processes

• Weekly/Daily Revenue Management Meetings
• Price Value Evaluator (PVE)
• Group/Transient Displacement
• Training (Revmax, Signature)
• Monthly Key Account Tracking
• Monthly Revenue Management Critiques
• Monthly/Weekly Star Report Analysis

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People

• The Revenue Management Team (GM, RM,DOS, FOM,
  AGM, Controller)
• Group/Transient/Regional SMs
• Third Parties- i.e. CRO Agents, NSOs
• I3P Market Managers
• Trust/Desires Corporate and Franchise affiliated
  support staff
• Customers

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Conclusion

• Know your customers
• Know your competition
• Know your partners
• Implement a clean price strategy
• Select the right tools that allow you to have
  control over your business