Chess is a well-known game of analysis. When playing for the first time, one often lacks the knowledge to think strategically. Over time, however, one begins to weigh possible outcomes for every decision, even when it’s their opponents turn. The ability to understand and analyze all potential scenarios and outcomes will lead to more wins.
Similarly, revenue managers for hotels and resorts play a perpetual game of chess, where every move they make within their own market has an outcome. Will a revenue manager grab their market’s king, the most valuable business? Or will they be left protecting pawns, the unnecessary discounts leaving your hotel or resort vulnerable to losing?
Some potential scenarios hotel and resort revenue managers may experience when it comes to winning and losing:
- Copying competitor moves may not always mean victory
- Will we lose our fair share of business if we don’t drop rates?
- When competitors begin dropping rates, it generates a desire, in fear, to drop rates to maintain ‘fair share’. This information can be helpful, but could result in negatively impacting ADR & RevPAR when it doesn’t have to. Would you drop rates five days to arrival if you knew the average market occupancy is at 80%, while you’re at 90%?
- Check Rate before you Checkmate
- Are we quoting rates that are too high or too low?
- When reviewing rates from previous years, it’s generally smart to start with what you already know. However, market deviations do occur. Revenue managers often know when they need to accept discounts to drive occupancy, but recognizing price sensitive scenarios to drive rates can be a challenge.