What’s New In Hotel Revenue Management Systems

Hotel Revenue Management can look like a big bowl of acronym soup: RevPAR, TRevPar, ADR, GOPPAR. Happily, there are a number of software systems available to help you sort it all out into a column labeled “Profit.”

First of all, let’s review what those acronyms mean:

  • RevPAR – Revenue Per Available Room
  • TRevPAR – Total Revenue Per Available Room
  • ADR – Average Daily Rate
  • GOPPAR – Gross Operating Profit Per Available Room

While these formulas look at maximizing revenue from several different angles, they all have one thing in common – time. The data generated won’t be very useful unless it’s used within the context of clearly defined time parameters. For example, comparing last week’s Tuesday through Thursday to this week’s Tuesday through Thursday, or to the Tuesday through Thursday exactly one year ago. You could look at a single day, or a whole month. Whatever you choose, make sure you’re comparing apples to apples.

Even if you’re a RevPAR wizard, a good hotel revenue management system will save time you can use to accomplish more tasks throughout the day. Some new systems on the market include:

  • RevPAR Guru
    RevPAR Guru offers an advanced revenue management module designed to help you increase online bookings, and easily determine pricing and distribution. Another module delivers reservations made by online travel agents (OTA), and a booking module to help you increase reservations made directly from your hotel’s website.
  • InnRoad
    Billed as an “all-inclusive” hotel software package, InnRoad takes all the individual tasks a hotel manager needs to do on a daily basis – check competitors’ prices, monitor online travel sites for their latest special offers, and review historical data like ADR, RevPAR by room type, occupancy rates, and more – and streamlines the whole process to keep your hotel competitive within its local market. It even has tools to help you easily design and implement special limited-time room prices to help you capture and retain customers.

Need help choosing the right revenue management system for your hotel? We can help. Contact us today!

Left Brain, Right Brain: The Hotel Revenue Management Skill Set

A few good hotel revenue management experts are born for this role, but that doesn’t mean they can’t also be made. While the following list of revenue manager traits might seem long and intimidating, keep in mind no one person embodies all these qualities. Also, any skill can be strengthened with proper training. It could be argued that the most important trait of a hotel revenue manager is an ability to work both sides of the brain.

 

Left Brain Skills

  • Economic Guru—An ability to stay updated and understand what’s happening not only in the hospitality industry, but the economy as a whole.
  • Math Wizard—Must be able to translate all that economic data into useable numbers that apply to your hotel.
  • Tech Geek—Should know spreadsheets inside and out, effectively navigate online hotel distribution channels, understand the principles of e-commerce, and choose the right hotel revenue management system for your hotel.

 

Right Brain Skills

  • Chess Master—Be able to re-evaluate the data in front of him or her to plan five moves ahead, and adjust as needed.
  • Great Communicator—Once a strategy is developed, he or she must be able to sell that plan to coworkers, managers, and possible hotel owners. This takes people skills and the ability to stay cool under pressure.
  • Spirit of Adventure—While hotel revenue management requires the ability to analyze and make sense of data—lots of data—it also requires the courage to make decisions based on that data and to sometimes take a leap of faith. And, of course, be able to critically analyze the change in data resulting from that leap.
  • Voracious Reader—A good candidate for the job should have subscriptions to financial, economic, and hospitality industry publications; online blogs; and newsletters.
  • Right Attitude—The drive to keep going onward and upward in terms of definable goals and skill level is necessary.

 

Smart eHotels™ has the right stuff to enhance your hotel revenue management strategy. Contact us today!

Hotel Room Pricing: Dynamic Pricing 101

No hotel—at least no successful hotel—charges the same room rate all the time. However, even if you have different price structures for different types of rooms, for high and low demand cycles, and for different types of customers (i.e., business vs. leisure vs. groups), your revenue management will be most effective with dynamic hotel room pricing.

 

What Is Dynamic Pricing?

In the hotel world, dynamic pricing means being flexible with the amount charged for a particular hotel room based not only on customer demand, but on the perceived value the customer places on your limited room inventory. A whole slew of factors affect what you charge and when—and to whom—including knowing:

  • Your target customers and different segments thereof, how far in advance each segment tends to book a room, and how long they tend to stay.
  • What type of room and amenities each segment gravitates toward.
  • Which segments tend to spend more of their discretionary funds on on-site attractions such as restaurants, spa services, and business services.
  • What your competition is doing/charging/marketing.
  • How to stimulate demand when it is traditionally low through smart marketing practices.

 

Software for Hard Data

Sound complicated? It can be! It requires a pile of historical data, research, and a willingness to take carefully calculated risks. A good revenue management software package can certainly help, but it’s at least as important that you (or the employee assigned to the task) understands the numbers you’re crunching.

 

The more you can fine-tune what you’re asking for a room and when you’re asking it—sometimes day by day—the less revenue will fall through the cracks between what you’re charging and what the customer is willing to pay.

 

Charge too little, and bargain hunters will snap up all the rooms before customers who would have been willing to pay more typically book. Conversely, if there’s a gap between what you perceive the value of your rooms to be and how the customer values the room, too many rooms will go unsold.

 

That’s why it’s imperative to be dynamic both in your hotel room pricing and also by raising the level of quality, service, and amenities to which customers are attracted. For further solutions in this area, contact us today.

Hotel Technology: What’s New in Hotel CRO Software

The list of hotel CRO (central reservations office) software choices seems to grow longer by the minute. It wasn’t too long ago we posted an article on the newest CRO packages on the horizon. In a few short months, more have popped up.

 

Which one is right for your hotel? There’s no one-size-fits-all, but we’re happy to give you the rundown on what’s available.

 

yourVoyager

Trust International’s yourVoyager takes a “create your own” approach to the CRO experience and includes these benefits:

  • Multiple languages to eliminate a commonly encountered barrier
  • Simple, easy-to-navigate user interface
  • Flexible enough to create one interface for a multi-facility hotel chain and another customized interface for each individual facility
  • Ability to choose which performance indicators are most important to you and to generate regular reports
  • Internal messaging system for quick, easy communication among all linked facilities

 

A few key features include:

  • Smooth integration with all major hotel global distribution system (GDS) channels
  • Ability to integrate with property management systems (PMS), revenue management systems (RMS), and customer relations management systems (CRM)
  • Embedded modules that help you manage room inventory, customizable reports, and HTML emails in response to customer reservations

 

Optima CRM

Optima CRM is just one part of an overall hotel management software universe developed by Silverbyte Systems Ltd. Optima’s main functions include:

  • Ability to include and handle the needs of all members of the traveler’s party, not just the one paying the bill
  • Modules for marketing campaigns and mailing lists
  • Tools to manage the sales representative team and their myriad tasks
  • Members’ club/loyalty program features
  • Data cleanup and management tools to eliminate duplication and accidental profile loss
  • Familiar and easy-to-use interface if you’re already using the Optima suite

 

Most hotel CRO software developers offer training, try-it-before-you-buy-it options, and 24/7 support. Whether you choose an established CRO package or a new kid on the block, you have nothing to lose by trying one on for size. For expert advice on hotel CRO, contact Smart eHotels today.

Hotel Revenue Management: 5 Tips for Success

Are you an executive for an international hotel corporation? Manager of a ten-facility, regional chain? Or a mom-and-pop operation in a seasonal resort area? Guess what? You all have something in common. You can benefit from a hotel revenue management system.

 

Recognizing that the smaller the business, the further your limited resources have to stretch, a good revenue management system can plump up your bottom line 5 to 10%. Those numbers are hard to ignore. Below are five tips to ensure your system achieves success.

 

Tip #1: One Size Doesn’t Fit All

Despite the common need for a hotel revenue management system, unfortunately, one size doesn’t fit all. There is no generic system that’s plug-and-play for every business. In addition, a hotel that’s hobbling along without a system is one thing; adhering to a system that’s a poor fit for your business model is infinitely worse. A revenue management system needs to be custom fit to each unique hotel, even within a large, multi-facility corporation.

 

Tip #2: Sort the Good Data from the Bad

It’s not hard to compile lots and lots of data. What you really need, though, is an accurate and reliable process for interpreting those numbers. For example, how do you distinguish good data from bad data?

 

The answer is to consider the source. Data collected from other travel-related sources, particularly those governed by strict regulations, can generally be considered accurate. Data that’s gleaned from customers, however, which often passes through two or more sets of data entry (paper or online forms, direct entry from passports, etc.) should be examined with a healthy grain of salt on the side, since there is more room for human error.

 

In addition, data gathered from mobile phone users is, literally, another moving target. You may know the age, location, and historical travel purchase habits of the phone’s owner, but what if that phone is borrowed? The search and purchase data is “polluted” by someone who may not be your target customer.

 

Direct, person-to-person contact between your staff and the customer remains the absolute best way to collect information. It’s critical for a hotel revenue manager to make sure the data pouring in from your front desk is clean and accurate.

 

Tip #3: RM Isn’t a One-Person Operation

Which leads us to our next tip: for a hotel revenue management system to work, and work well, everyone within your organization has to be on board and properly trained to collect and pass along the right data at the right time.

 

Tip #4: Move Beyond Spreadsheet Figures

Thanks to modern hotel revenue systems, the sheer variety of data is more vast than ever. However, financial numbers don’t mean anything if you’re not aware of the larger context. While the data can reveal you had an uptick or downturn in reservations last month, the larger question is “Why?” Is it something you had control over, or was something else occurring that impacted sales? Was it an annual event you can anticipate for next time, or an unexpected incident (a closed freeway, a fire at another hotel, etc.) that sent more customers through your door?

 

Tip #5: Customers Don’t Stand Still—Data Doesn’t Either

As the number and variety of booking channels increase (web site, mobile, social media, and third-party booking engines), an effective revenue management system can help you make sense of the data coming in from those disparate sources. The more real-time the data is, the better.

 

For example, it can be extremely useful to know what kind of device is most commonly used to make a last-minute reservation so you can tailor any marketing efforts to that type of device. In general, a week or more before any given arrival date, about half of all reservations are made on a traditional computer. As the arrival date nears, you’ll notice a shift to mobile devices like tablets and phones.

 

Learn More Today

If you’d like to know more about how a hotel revenue management system can help you, contact Smart eHotels today.

Hotel Room Pricing: It’s All About the Value

Hotel room pricing is definitely at or near the top of most travelers’ lists, but it’s not the only check box they’re ticking.

Whether your hotel is one of several in an urban location or a lone wolf planted next to nowhere, you’ve still got competition. From price point to amenities, customers are weighing the pros and cons of booking a room with you.

Looking for Value

Sure, you’ll always have those customers who simply want the cheapest place to lay their heads for the night. But is that how you want your hotel to be perceived? If that’s the market segment you’re targeting, that’s fine. The reality, though, is more and more travelers are looking at bang for their buck, not just the buck.

What kinds of features, then, raise the perceived value of a room?

  • Queen-size beds. Nothing says “comfort” like a little extra elbow room.
  • An in-room coffeemaker tells customers you understand their need for caffeine before facing the world outside their door.
  • Free coffee and/or breakfast, which saves customers time and money searching for a restaurant.
  • Free WiFi, though this may depend on your location and your target customer. Business customers won’t consider a facility lacking high-speed Internet access. However, travelers who really want to get away from it all may consider WiFi a turnoff. It’s all about knowing what your customer wants.

Season(ing)

Though in some regions demand rises and falls more dramatically than in others, every hotel experiences a high and low season. For example, around spring break, south Florida resorts are packed with winter-weary guests who’ll pay any price to get out of the snow, but in mid-summer, room rates fall to keep the reservation lines humming with a different target customer.

About the Competition

Returning to our remotely located hotel example above, it’s important to not compare your facility to one that’s radically different in size, scope, and the range of offered amenities. You need to find hotels that are similar to yours in your region and comparable in size, amenities, and services, and consider those your competition—even if a big-name chain is situated across the road.

After all, when potential customers go to an online booking engine to search for hotels in a certain area, they’re going to be looking by hotel room pricing and attributes, not just pricing.

Let Us Help

Don’t be an apple in a search result full of oranges. Let us help you make your hotel an online force to be reckoned with. Contact us today!

Hospitality Yield Management: A Formula for Success

Hospitality yield management: among a hotel property manager’s many and varied tasks, this one ranks near the top both in importance and in hair-pulling aggravation. Every business manager wants to maximize profit, and cutting expenses only goes so far. Offering your rooms to the right customer at the right price will take you the rest of the way.

As the economy slowly recovers from the most recent recession, hospitality yield management is more important than ever. However, simply monitoring all the data that goes into adjusting room prices can be a full-time job, and few hotels have the resources to devote one, full-time person to this task. However, there is a simple and flexible formula you can use to maximize yield on each and every room class for your target customers.

Understand the Past

All experienced hoteliers know that historical data is the benchmark for forecasting future room demand. With enough data to back you up, you have a fairly clear understanding what combination of price point, features, and amenities attracts your target customer. That’s your starting point.

From there, you can build your pricing structure to fit your hotel’s current and future customer base. This can be customized with more or fewer price levels, but a basic pricing structure might look like this:

  1. Base rate (or rack rate)
  2. Walk-in corporate discount
  3. Military and/or government discount
  4. Promotional rate

Note that a senior citizen discount is not part of this list. That’s because that rate is always offered no matter what.

Let’s say your hotel has 100 rooms. After about half the rooms are sold (no matter which rate level that they’re sold), stop offering level 4. When the next 25 rooms sell, lop off level 3, and leave the remaining 25 rooms to be sold at the corporate and rack rates.

Incorporate Current and Future Events

When establishing your rate structure for the next quarter, don’t forget to keep an ear to the ground for unexpected events that might unexpectedly spur demand in a typically low season. For example, a popular Broadway road show or rock band comes to town. Your competition runs a flash sale. A storm on the coast sends vacationers scurrying inland for temporary shelter.

Go ahead and plan for the future, but remember that circumstances are fluid, and you should be poised to take advantage of changing market conditions that impact even the best of hospitality yield management plans. For further assistance, contact SmarteHotels.com.

Hotel Revenue Management: Small Changes Add Up

No doubt about it, the Internet has done much to level the marketing playing field between the giant chains and the independents in the hotel industry. But even if we could totally automate our property management system to integrate seamlessly with all our global distribution channels, does that mean we can just “set and forget” our hotel revenue management?

Absolutely not. The human element is still a critical part of ensuring each category of rooms in your inventory is at the right price point to maximize RevPAR, or revenue per available room. It’s crucial to monitor how much each of these online distribution and marketing channels are costing in terms of dollars and hours to ensure you aren’t wasting both on unproductive efforts.

Determining Channel Productivity

Here’s how to break out the data to determine when a channel is productive or not:

  • Track how much time you’re spending maintaining each channel.
  • Track which channel leads to actual bookings, and factor in the length of stay and room types booked. You may find the type of customer you attract through Twitter differs from one who booked due to a Facebook or email newsletter promotion.
  • Compare the ADR, or average daily rate, to the actual revenue each room type produces.

Eying the Competition

Your hotel doesn’t exist in a vacuum. You’ve got competition, plus savvy customers who keep discovering more hotel room deals online. To avoid getting left in their dust, you should be where your competition and your customers are online. This can be a challenge because new web sites, private networks, flash sales via email newsletters, mobile apps, Twitter hashtag deals, and Facebook tools pop up all the time.

Good hotel revenue management means keeping an eye on the competition by subscribing to their email newsletters, tracking their Twitter feeds, and even “liking” their Facebook page so you can know when a promotion occurs that might impact your bookings.

Garbage In, Garbage Out

All kinds of software tools can compile and analyze incoming data from all your distribution channels. It seems logical that the more data you have, the better, right? Not always.

Knowing how to organize the most important data points will keep you from going cross-eyed from trying to make a decision while that data is still fresh and relevant. For example, while it’s helpful to know how many bookings occurred through your Facebook flash deal, it’s even more helpful to know exactly when the majority of those bookings took place. If your target customer isn’t logging on to Facebook until after dinner, chances are that flash deal you posted in the morning will be too far down on the news feed for that customer to see.

Online travel agents, however, may start logging in first thing in the morning, so sending out a carefully timed email special at that time will more likely draw their attention.

Looking Forward—and Sideways—for Hotel Revenue Management

Relying solely on historical data to forecast future demand can sometimes backfire if you aren’t also paying attention to what’s happening in the travel industry as a whole. Let’s say you’ve set your room prices for the next month based on good, solid, historical data. It’s a rate designed to attract more customers during a traditionally low season for your hotel. That’s all well and good, but what happens if a major airline runs a special fare for flights to your region? Suddenly, hotel rooms are a hot commodity, and you’re sold out before you’ve had a chance to adjust room rates to the sudden demand. You’ve lost out on an opportunity by not taking into account current and future data points.

That’s why the key to successful hotel revenue management involves more than automated tools. By understanding the human element and analyzing your data, the competition’s deals, your customers’ preferences, and industry news, these small changes will add up to more bookings and increased revenue. For more information, contact SmarteHotels.com and let us help

Hotel Sales Marketing: Mistakes That Could Cost You, Part 4

In the last of our four-part series on avoiding common hotel sales marketing blunders, let’s look at a few loose ends that, left dangling, could trip you up on the way to success.

 

Sales Slip-Ups

Once you’ve executed your careful, step-by-step plan, don’t make the fatal mistake of failing to give your salespeople the tools to bring your goals to fruition. That means doing more than planting them in front of a phone or a computer screen and waiting for the customers to come.

The website is your primary sales tool, of course, but it’s not the only one you’ll need. As much as possible, conference and event planners like to experience the venue as their clients will.

  • Create a video channel on youtube.com or vimeo.com and post walk-throughs of the hotel from an event planner’s point of view. Include clips of successful events that have already taken place.
  • Hire a professional photographer to provide high quality images for the website and printed brochures.
  • Don’t forget to provide optimal electronic formats of videos and images for smart phones, tablets, and laptops.
  • Hold occasional tasting events to show potential customers the level of food quality they can expect from your own facility’s kitchens or from local caters, winemakers, and brewmasters.
  • Invest in the same kind of technology your customers are using. Does your typical customer use a smartphone or tablet? Your sales team should have them, too. Your reward will be a faster, nimbler process that requires less paper to keep everyone on the same page.

 

Ignoring the i-Everything Generation

Social media is pretty much the king of the cyber world—ignore it at your peril. Whatever happens at your hotel, whether good or bad, will be talked about online—sometimes while the success or the disaster is still happening.

Social media has the potential to expose glaring flaws in your hotel from top to bottom, from facilities to the faces behind the front desk. It’s important that maintenance staff responds promptly to service requests, or photos of a less-than-clean room or malfunctioning toilet can and will wind up on travelocity.com. Front desk staff must be “bomb proof” – that is, unfailingly patient, efficient, and polite. This is where constant attention to staff training will save your social media bacon.

Yes, that’s right – staff training can be considered a part of your overall hotel sales marketing plan.

 

Forgetting To Trust The Process

There are two big revenue management mistakes hotel managers are prone to make. One is forgetting to decrease discount offers when room bookings rise. The other is forgetting to trust your marketing efforts and historical data to hold true during economic downturns. The temptation is to slash prices when times get hard and reservations dip, but that’s when you most need to hold the line.

Room pricing is definitely not a set-it-and-forget-it task. It’s something you must keep an eye on constantly and tweak as a variety of market forces apply pressure. Just don’t forget where that fine line lies between attracting new customers and devaluing your product.

 

Sending Your Marketing Money Down a Black Hole

All your careful planning and budgeting will come to nothing if you don’t track your return on investment (ROI). It’s easy to detect an increase in web site visits and number of reservations, but these days there are ways to tease out more detailed data that will allow you to track customer response from, for example, an email click-through to the money that customer spent at your hotel. If the prospect of dealing with this level of detail gives you a headache, keep in mind that even high-level information – the kind that gives you data to compare month by month or from one quarter to the next – will tell you whether your marketing strategy is worth the time and money.

You’ve got bright ideas for your hotel sales marketing plan. SmarteHotels.com can help them shine. Contact us today!

Hotel Sales Marketing: Mistakes That Could Cost You, Part 3

In the third of our four-part series on avoiding common hotel sales marketing mistakes, we give you two more tips to smooth the sometimes-bumpy road to success.

 

Strategic Blunders

A goal is unreachable without a plan. Say you want to attract more business-oriented groups and events to your hotel. Look around your facility – or better yet, take a conference veteran with you – and ask yourself if it’s the kind of place that would attract that kind of customer. If not, it’s time to plan a series of steps to get you to that goal. For instance:

  • Refitting rooms
  • Adding or upgrading amenities and facilities
  • Studying the competition to fill a gap they aren’t filling, or take it a step further

Okay, so you’ve got the goal, and the steps to get there. Don’t forget to take another step back and plan a budget. If you have board members or shareholders to answer to, make sure they are included every step of the way. At the same time, don’t ask the team members who are responsible for the day-to-day running of your hotel to take on the task of marketing. Effective marketing requires a certain degree of chance-taking, creative brainstorming, and a vision of the long-range future – a different mindset from operations. That’s not to say revenue managers don’t have something to contribute; they simply have enough on their plate keeping your hotel on solid financial ground from which to launch your plans for the future.

 

Falling Off the Search Engine Map

Search engine optimization (SEO) isn’t as simple as it used to be. These days you almost need the skills of a chess master to stay on top. The rules that determine who lands on the first page of a hotel search are increasingly complex, and are changing all the time. Can you afford to hire someone to keep your website SEO-friendly? A better question would be, can you afford not to?

SmarteHotels.com can help you save time, money, and aggravation with your hotel sales marketing plan. Contact us today!