Revenue and marketing must be on same page
Most of the time the roles of revenue and marketing are misunderstood, either they are considered “pretty much” the same role, one person is enough to cover both or you have two separate departments that unfortunately are not working together but are competitors inside your own house. It is important to clarify that the two roles must exist under the same roof and that they must work together to achieve the targets requested.
We are all well aware that metasearch engines are consistently increasing and that the cost for a property has gone up at the same pace. That means that to be able to invest in the right strategy and be available to as many potential customers as possible, we need to combine our strengths to plan for the success. Samantha Worgull from HotelNewsNow offers the discussion results of a few professionals from leading hospitality companies like Highgate and Fairmont Hotels and Resorts.
They discuss about online and offline marketing, where the online includes everything related to e-commerce and social media, whilst offline is taking care of branding and imagine.
It is essential to share all the data and to apply every possible strategy to improve the results. At the same time to be sure that the marketing and revenue teams are working together, it is necessary to overcome the main obstacles: […]
- “Sandbox mentality” – revenue managers need to leave the marketing team free to work in their space
- “Communication” – both revenue and marketing need to speak a simple language that the rest of the team can understand
- “Non-synchronous goals” – the goals to achieve are all the same and both departments need to make sure that they use the same methods and metrics.[…]
Team work is at the base of every success and it is essential to understand that the competitors are outside the walls and not inside them.
How to Choose the Right Marketing Mix for Your Business
One of the main elements to get the right revenue strategy in place is to choose the right marketing mix. Defining our market segments is essential for any kind of business not only in hospitality. We will come across different kind of market segments and even if the same industry has the same targets, it might still have different approaches to get to its customers. I have found this interesting article written by John Bertino, Founder of The Agency Guy, that can be helpful for every and each sectors that wants to develop the right plan to drive more revenue.
How do we choose the right market segments? It is a series of pieces, that put together, will suggest the right actions for the next marketing campaign.
First of all we start to check what our competitors are doing, which kind of customers they are targeting and how they do that. Clearly we do not copy the same strategy, however we can enhance what they are doing well and we discard what they are doing unsuccessfully.
Then we move to the next step. We want to recognise our ideal customers. We will then try to understand the activities that bring them to us or our location, their interests and their opinions. Based on all these elements we can create a tailor-made campaign to make our hotel the really attractive choice.
Next we need to create the goals and make sure that we are able to measure the results of those objectives. Those could be special offers or packages, a newsletter, a banner on your website, a PPC campaign.
Once we have those elements we just need to mix them together and to upload them on the right platforms. We need to understand which social media are mostly used by our potential clients and make sure to create the right campaign to reach them.
Here is when we choose the budget we are willing to invest and where.
At this stage we try the strategy with the various campaigns and we monitor the results, based on those we modify accordingly until we find the winning results.
How to win in hotel revenue management
We all agree that quarter after quarter the market starts to see better figures at a good pace. In this article on HotelNewsNow, Ted Arps, Senior Vice President of Investment Management for Davidson Hotels and Resorts, offers a few tips on how to succeed in revenue management together with a few definitions to better understand the key factors that are involved. Many revenue managers tend to spend their day opening and closing market segments in OTAs and to check what the competitors are up to, but there is more to that.
One of the keys to create the right pricing strategy is to understand “elasticity”, to make sure that we know our demand, if it elastic or inelastic, that means if our market is price sensitive or not. The article offers a few tips to understand and get closer to the right revenue management practice.
- “Rate Fences” – we create rates to attract different guests, for example, rates for corporate travel, length of stay, non-refundable, advance purchase. This helps to redefine our market segments.
- “Reference Pricing” – we come across the different priorities of our potential guests, the one who pays any price, the one who goes for the fair price, the one who looks for a discounted price and the one who seeks the lowest price available. We also know that guests tend to compare a product based on what they paid in the past and in a specific place or time.
- “Upselling and upgrade” – we can increase our revenue without cutting the price and improving the guest experience.
- “Online pricing” – this is not only a synonymous of OTAs, but this includes also social media, hotel website and more. The search for offers online is escalating daily and it is more and more relevant to the choice of the product.
With this tips we are ready to act during the times of growth and to react during the downturns.
Pros & Cons of the Commonly Used Booking Restrictions
We are all aware that there are a lot of “ingredients” in revenue management to create the right successful and efficient pricing strategy. Today I would like to offer a special attention to a subject that is not often mentioned, the booking restrictions. Here the RevParGuru explains the Pros and Contras of the commonly used booking restrictions.
When economics started to see some difficulties, the demand has drastically dropped pretty much all around the world, whilst the offer did not follow right away. A lot of inventory and no guests, the prices have decreased, discounts were offered all over and of course nobody has thought to set up restrictions, not even during the major events. Hoteliers did not want to risk and decrease the opportunity of selling.
Since then we can say that the use of restrictions have been quickly reduced and if we look into the consequences of those restrictions, we probably do not want to use them very often, even if I am always opened to exceptions and flexibility. Many are still the factors to consider before eliminating an element for good.
When we talk about the most frequently used restrictions, we refer to the minimum length of stay, the close to arrival or departure and the maximum length of stay. They all used to have a great part on driving revenue, however nowadays because most of the bookings are made online – OTAs and Hotel website – they have a great part on reducing visibility and potentially losing a guest who cannot find any availability for the desired dates.
The best restriction we can put in place on the current market is price, we can increase it on the dates we would have added a restrictions and give to the guests an extra chance to think about that property and maybe to call. This will offer a constant visibility and a better ranking. Once again we will proceed with caution, the increase should be reasonable.
7 reasons to consider revenue management
Nowadays we are talking a lot about revenue management. The big hotel chains have been in the game for many years taking advantage of this science or art, it depends to whom we are talking, however many independent hotels are still at the first stage, the reason why they have to change. Independent hotels are often small boutique hotels that have been on the market for generations and they still survive. Many of them are really lucky to have repeat guests, who are so happy that they spread their enthusiasm to friends and neighbours.
Surviving is good, but living is better. What can we do to make this little step from doing well to do better?
In many European cities is now becoming a fashion to employ a revenue manager, but it is really vital to understand who they are employing and what revenue management can really do for them. In this article Eric Stoessel, from frontdeskAnywhere will bring up the main 7 reasons why a hotel needs to consider revenue management with the knowledge and experience of one of the leading market companies on revenue strategy, Duetto.
Create the right strategy is like “playing chess, applying a sophisticate calculation, learning from experience, recognising the patterns, building a position, analysing variations and moving in for the win”. The article describes in a real straight forward and simple explanation the common pricing mistakes and what the hotel needs to do to become a winner:
- Stop selling out too soon
- Start changing your rates
- Stop pricing by “gut feel”
- Stop reacting to sudden price changes from your competition
- Stop selling rooms on a first come, first-serve basis
- Stop linking your different price points together
- Stop shutting down pricing decisions at the end of the day
Driving revenue is at the base of any activity, however most important is increasing profits and controlling the costs in the process.