Your Summer Revenue Check-list
For most hotels, Summer is the absolute busiest time of the year. Your properties are buzzing; full of excited guests in holiday mode, which means that for most of us, we have teams that are running around like headless chickens!
NB: This is an article from Right Revenue
No matter what country, city or town you are in, we all know that staffing is an issue and what this usually means is that the word ‘busy’ takes on a whole new meaning. But how does this craziness impact your revenue strategy? Well the truth is that we are often so busy fire-fighting and looking after the ‘big picture’ that the strategy gets pushed to one side.
We are busy right? So what’s the problem? Well, the problem is that real profitability lies in the detail… So here are my top 5 tips for ensuring that your Summer is as profitable as possible:
#1: Rate Strategy
Do you have your strategy right and are you taking the time to check? Have you pushed your rates too high, too soon in the hope that the crowds will flock to you? Is your base business correct? Have you over forecasted and therefore restricted demand? Or worse still, have you under forecasted and released too many low rates into the market? Will you spend your Summer being a busy fool? If you don’t have the help of technology or the time to do proper revenue management, then at least do some of the simple maths. Check where you were for let’s say, Saturday 21 July 2018 at this point last year. Then check where you finished for the same date. How many rooms did you pick up and at what ADR? Now look at where you are today for Saturday 20 July 2019. Can you expect the same amount of business? Is your current ADR too high or too low? This of course is not proper revenue management, but it is a start. Look at the normal pace of bookings for Saturdays in July and then decide whether you need to hold rate or push? Don’t leave those decisions any longer as you will already have lost out.
Who is holding room blocks and why? Do you have weddings that are still holding their 20 rooms (which you naively give all brides as part of the sales process – a blog for another day but shouldn’t you train your team to just ask how many the bride might need, or even better, do the maths and see how many rooms a local bride normally needs so that you at least understand how many rooms might wash). You have your busiest time of the year right around the corner, you need to have every single allocated room accounted for. Until you do, those rooms are effectively not available for sale and may well cancel. Where will you be then if you can’t re-sell and you have already turned away great business???
Do you have OTA’s or Tour Operators with rooms allocated to them as part of their contract? Do you have legacy contracts with Expedia that hold you to two rooms on a 48 hour release? If you have, do you really understand when they use them and when they don’t? Again, do the maths. If these rooms aren’t being picked-up then put them back into inventory and take back control!
I have said many times that OTA’s should not be used for base business but used only when you need the business – there is a difference… OTA’s are a channel and should absolutely be seen as an important way of distributing, but not the only way and they should never, ever control your business. Do not be afraid to turn these channels off or at the very least restrict them. The biggest mistake I see many hotels make is looking only at the rate being sold and not understanding the cost of sale. OTA’s will impact your bottom line – fact! If you have very busy days over the Summer and you know you can get the business direct or through a more cost-effective channel, then start restricting OTA’s now.
If you have a Spa or Golf Club are both these departments working well with your Rooms Division? We all know that to have a busy and profitable hotel, you need to fill bedrooms. After all my years of revenue consultancy, it still never ceases to amaze me that spa treatment rooms are filled, golf tee times are booked but few of those guests are actually overnighting… A hotel needs to have fantastic packages to attract ‘bums on beds’ and if your outlets are filled with Mr & Mrs Joe Public who are just around for a few hours and spending very little, you may have a happy Spa Manager but trust me, your Revenue Manager is weeping into their excel spreadsheet!
This is the time when all hotels needs to ‘make hay while the sun shines’. There are many times of the year when we potentially make very little profit so now is the time to get it right.
Allow your team the time to analyse, the devil is in the detail after all…