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The Integration of Revenue Drivers . Carol Verret / March 2004 |
March 2004
As peak season nears for many hotels, revenue management is the key to a successful summer season. Leisure remains strong even as business travel continues to disappoint and it is imperative that in March the pieces are in place to maximize revenue. Potential customers are much smarter than they used to be about locating, qualifying and making their hotel choice. In many cases, this process is completed without ever contacting the hotel. The term revenue management means many things to different people -- whatever the definition, the intended end result of the process is increased REVPAR for the organization. It is increasingly clear from feedback that I receive at seminars and from my consulting clients that there is often a lack of co-ordination and/or consultation on the rate and offering through all of the revenue drivers. Revenue drivers are defined as all areas of revenue generation within the organization. This includes central reservations, property-level reservations, the sales department, the electronic distribution channels and the web site. While franchised properties have a higher level of consistency through the GDS, it still requires monitoring and management at the company or property levels. At a recent sales seminar, participants expressed frustration that they are largely unaware of, nor are they consulted about the rates that are posted on the electronic distribution channels. One result is a very high attrition rate in meetings and conventions as attendees book their hotel at these lower rates and "fall" off the group block. Another consequence is when the rate posted is lower than what has been negotiated with third-party suppliers such as wholesalers. A coaching client of mine expressed frustration over his lack of consultation in the development of the new property web site and the rates that are being quoted through the site. First of all, the content was skewed to a specific market segment that was not representative of the core business segment and secondly, the copy changes disrupted the optimization strategy. Secondly, the rates that were quoted were not at all aligned with the rates being quoted at the property level or through the central reservations agent and many room descriptions were inaccurate. The end result was that not only was this hotel nowhere to be found on the key word searches in the major search engines -- a potential disaster for this independent property, but fewer reservations were being made through the site. Collaboration across all departments that generate revenue is the only way to ensure continuity. This need not be a tedious process of endless meetings. A few things put into place and adjusted periodically, based on market conditions and forecasts, are sufficient:
The process of collecting the information is about communication and collaboration and can be accomplished through periodic updates from the revenue drivers to the revenue management team. This swings both ways as revenue management needs to keep the revenue drivers informed of their proposed tactics in order to solicit input and buy in. The consequence of not doing this is to present an inconsistent message to the public who is in the position of making selections without any direct contact with the property thus depriving the hotel from any opportunity to make adjustments or explain the disconnect. In the consumer's mind, a hotel that can't get its act together to project consistent rates may have the same problem when it comes to servicing them as guests. The issue is more than rate parity, it is aligning the rate structures between all revenue generating departments so that each is maximizing their contribution to revenue. copyright © Carol Verret, 2002-2003-2004 Carol Verret is President of Carol Verret Consulting and Training, a company offering consulting and training seminars to the hospitality industry in the areas of sales and marketing and customer service. If you missed attending our live webcasts in the Training Byte Series in 2003, you will be glad to know that we are now offering each "Training Byte" in PDF format on our web site. We will not be repeating these webcasts in 2004. To order your copy, please visit http://www.carolverret.com/webcast_training.htm Watch for our new Training Byte Series for 2004 Verret is a twenty-year veteran of the hotel industry. She arrived in Denver in the midst of an economic downturn and quickly established herself as an expert in sales and marketing in hotel turn-around situations, applying her formula for REVPAR improvement. To learn more about Carol Verret, Consulting and Training, visit her web site at http://www.carolverret.com |
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