It’s important to go to the doctor each year for a health check, we all do it, but… are we checking up on our revenue optimization systems and strategies the same way we check on our health and bodies?
In a recent webinar, Rainmaker investigated the body’s six vital systems and applied them to revenue optimization. Turns out, how we work in the office could use a health check to be sure we’re running at peak performance, just like our bodies do! In this trip to the revenue optimization doctor we highlighted advice on how to evaluate your revenue management experience: what to continue doing, what to update, what to stop doing, and some items to add to your routines.
1. The Digestive System: Your Day to Day Activities
As revenue managers, it’s easy to get in the habit of doing the same thing daily, weekly, and monthly – but when was the last time you took a look at what you’re spending your time on? Which reports do you use that you absolutely could not live without, which ones could be tweaked a little bit and which ones do you send out every day like clockwork, but no one is looking at? Are you analyzing these reports or were they asked for once but may no longer be important?
The age old saying, “If you always do what you’ve always done, you will always get what you always got” is especially applicable to revenue management. We want to ensure that we are spending our time in the correct reports, looking at the right data and making the most effective decisions. It’s time to give your processes a health check and really think about what to continue, change, or even stop doing.
2. Bones: Your Support System and Staff
Just like bones hold up our body, we have support systems within our organizations. You rely on your teams to ensure that your properties and portfolios are successful.
When you hire new employees at your property, it is crucial to ensure they are properly trained in the systems that are an integral part of the hotel day-to-day operations. This training should extend beyond the revenue management department and promote an RM culture throughout your organization.
- Ensure your sales team understands your strategies. From rates and restrictions to their MAR rates and high compression periods, alignment between teams will ultimately bring your property more revenue.
- Does the front desk understand the reasoning behind your rates and restrictions? Have they been properly trained on upselling customers and increasing daily revenues?
Our industry is constantly changing, and our teams need to be able to adapt to this ever-changing market. It’s important to utilize all of your bones and involve different departments at your hotel in your revenue management strategy.
3. Musculature: Strength from Practicing and Implementing Your Tactical Strategies
To maintain your muscles, they need to be used! There are lot of factors that can affect your pricing strategy – are you keeping up with the changes to your market? Below is a quick quiz to gauge if you are staying up to date.
- When was the last time you visited your primary comp set?
- When was the last time you looked at your own website? Have you compared your website and what you are selling to your comp set?
Similar to keeping up with our markets, we need to continue to work and re-work our systems and strategies. There are tons of factors that affect our revenue optimization strategies, but here are a few examples of check-ups you can perform to ensure you are maximizing your RM efforts.
- Events in the system: Compression periods, event factors, etc.
- Comp set content: What are they offering?
- SWOT and PVC analysis. Has someone done a renovation lately?
- Room types and room mix. How does this compare to your comp set?
All of this information should be updated on an ongoing and regular basis. To keep your muscles healthy, you need to keep working them!
4. Respiratory System: Stay on Track, Monitor and Check Progress
Just like breathing, in this ever-changing world for hotels, what are you doing to keep in step with your competition? Sometimes you need to stop and take a breath, other times you need to make sure your cardiovascular system is in shape as you are now running a marathon and need to beat the competition!
It is important to understand your property’s needs and have the right tools. However, you also need to calibrate your tools properly to set you up for success. Just like monitoring your breathing ensures you stay on track. Use the below list to be sure you are incorporating as many different resources as possible into your RM strategy to ensure you have all the information you need.
- Revenue Management System
- BI Tool
- Group Booking Evaluator
- Competitor Rates
- Channel / GDS Info
- Length of Stay
All of these tools and data sets work together to create a revenue management culture across your entire organization.
5. Circulatory System: Form and Function – Data, Data, Data
Blood circulation is one of the most important functions in the body. It supplies oxygen to the brain and other organs. It's what makes our bodies work, just like data is to revenue management! Having the right tools is important but to take the next step, the right data is integral to your success.
Are you still using Excel to analyze your data in Excel? It is an extremely powerful tool, but what happens when you break a macro – or worse, don’t know that you’ve broken a formula and are reviewing incorrect data.
Systems use the data they receive to come to their conclusions. Do you ever stop to look at the data that is being sent from your PM system? Is it accurate? If you put garbage into your system, you will get garbage out.
Data is an integral piece to the revenue management puzzle. Without accurate data, your systems cannot run at peak performance and day-to-day tasks become increasingly difficult.
6. Brain and Nervous System: Understand, Create, Measure Results
While Rainmaker has plenty of systems to use, our body and brain only have one nervous system. We want to use all the right fitness trackers to ensure we are staying on track to maintain our health:
- guestrev®: Measure your forecasting successes or failures and track how often you are overriding the system to see if it was the right thing to do. Did you sell out? Could your ADR have been higher? How is your pace compared to forecast?
- revintel®: Continuous checkups on pace through Revintel keep you on track by market segment and rate code. it can also help track your promotional success.
- grouprev®: Grouprev has a report for pipeline analysis that can be compared to your booking pace and you can track to ensure you have enough in your pipeline to justify the pick up to hit forecast.
How healthy are you? Revenue managers have their pulse on an immense number of factors that affect their day to day operations. We hope this health check was able to give you a starting point to return to your hotel and evaluate your current status, make some changes to your RM process, and improve your strategies!
For more information, download the webinar!