Welcome to another Expert Insights discussion.
Today we continue our conversation with our 2 guests:
🔹 Peter Russell – Chief Operating Officer at Russell Partnership Technology
🔹 Thibault Catala – Founder and Managing Director at Catala Consulting
In this episode (part 2) we explore the different scenarios that may come up as we plan to reopen. We also look at the possible cost implications and revenue opportunities these scenarios may create and how, by understanding your breakeven, and modelling these scenarios, you can see if they will be profitable or not.
If you missed Part 1, here is a link to the blog post
and here is a link to the Part 1 video
Hope you enjoy it 🤞👍
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“When we look in the breakeven analysis, there is one figure which is the average rates for the target you are expecting on your forecast. So now if your GM or Owners come to you and says you need to drop the rate, because we need more revenue, and more occupancy, and so on, then go back to the analysis with the new proposal, you expect 10% discount or a 20% discount or 50%, then go full blast, you have now look at your new breakeven point, you’re now at 70% or 110% percent – does it makes sense? So go back, look at the data. Always support your decision and your ideas with data. If I show the data based on what I’m saying, like it make any sense, then it’s hard to argue”.
“One of the other things that’s built into our tool and we think is really important, was tracking those metrics in terms of what is our RevPAR look like? What does our ADR look like? What does our TrevPAR look like? Just to make sure, because we need to understand what those things are. It might be that we’re willing to accept lower numbers in those areas for the first part of the recovery, and then we want to see them grow. I know something that’s really important for a lot of hotels, whether they’re individual or part of chains, is things like that RevPAR index growth. So it’s that it’s that growth of the number. So I think it’s always important to look at the comp-set. But it’s also important to know that we internally are growing and improving as well“.
🎞 VIDEO CHAPTERS:
- Re-opening scenarios and implications (1:17)
- How do we model this scenario (8:41)
- What cost implications to consider with this scenario (11:31)
- What revenue management decisions (19:09)
- How to use breakeven model to support decisions (23:39)
- Final thoughts (28:40)
👀 WATCH NEXT (A few of our other videos)
💢Understanding Hotel Breakeven Helps Revenue Recovery Strategies
💢Customer Lifetime Value: How Does Price Fairness and Price Identity Fit In?
💢Price Fairness and Price Identity: What Is It and Why Is It Important?
💢Should Major Brand Hotels Consider External Revenue Management Consultancy?
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