Good yield management pricing requires good data—mountains of data, sometimes an overwhelming amount of data. How do you figure out which sets of data are the most relevant to your hotel’s success? Sure, you could track how sheet thread count affects repeat customer business, but is that the kind of micro-data you want to spend time tracking?
When deciding what data sets are worth your time, start at the top: the market. How does your hotel compare to its competitors? These days you can find out through a data collecting service like Smith Travel Research. There you can select a set (or multiple sets) of comparable hotels in your market region and track statistics like:
- Occupancy rate
- ADR – average amount of income per paid occupied room
- RevPAR – revenue per available room (note how this is different from ADR)
These numbers alone won’t tell the whole yield management pricing story. Each facility in your competitive set is unique, and there are myriad “x” factors that figure into why one hotel’s occupancy rate is higher than that of another—staff friendliness, age and condition of the facility, amenities, food and beverage quality, surrounding attractions, etc. That’s why it’s not a good use of your time as a manager to stay glued to a screen full of statistics.
For example, knowing that another hotel’s per-night occupancy rate is higher than yours doesn’t necessarily tell you why. Here is where you may choose to dig a little deeper into the data to figure out what kind of value a competitor is offering that you aren’t.
Is their per-seat food and beverage revenue higher than yours? The intangible answer: their food is better quality, their operating hours are more convenient, or food is offered at a price that makes guests want to stay on hotel grounds rather than drive to a different restaurant. Do more of their customers use the spa or workout amenities than yours? The intangible answer: the hotel spends more to update and maintain the equipment.
As you can see, any change in lower-level data—right down to sheet thread count—can affect the higher-level “big data.” This is where customer feedback can help you focus on small improvements that ultimately add up to a healthier bottom line.
Need guidance on effective yield management pricing data mining? We have the tools! Contact us today.