The Value of Segments and Impact on Revenue
Data is daunting and tracking it can be exhausting and sometimes over complicated, but honestly if you aren’t tracking your business you are potentially running blind. And by that I mean, how on earth can you possibly understand where your business is coming from; how much it is costing you and how each booking impacts your profitability?
Too often I see hotels looking only at the number of hotel rooms they sold last night, last week or last month and the revenue they generated. They look only at ‘whole house’ believing that if the rooms are coming in and the revenue is good that is enough, but is it?
Worse than that, many look at the revenue in their bars and restaurants in isolation which of course encourages that ‘working in silo’s’ mentality. Definitely content for another blog but for now I would like to demonstrate the importance of tracking Market Segmentation and the impact it could have on your business.
Market Segmentation is of course only one metric and strong revenue focused hotels will also measure by Source/Room Type/Length of Stay/Country of Origin etc but the goal in all of this is to understand the impact that our customers are having on our business and which customers actually add the most to our bottom line. Remember of course that we can’t and shouldn’t be all-things-to-all-people, so by having an understanding of where, why and when you business is coming should impact all business decisions.
Imagine if you understood exactly how many rooms to expect from your Leisure Sector; how many days in advance they will book; which days they actually impact; the price they pay; the cost of bringing that business to your hotel and best of all, how much they will spend in your outlets. To get all of this information and to make that information useful, you need to start to track.