Using Viral Marketing Effectively to Increase Hotel Profit

Many hotel revenue managers have the misconception that effective viral marketing online requires a huge budget. But this is not necessarily the case as tourism authority for Hamilton Island, Queensland demonstrated. Basically, their campaign is simple: hire a blogger to talk about the island. The job, “Best Job in the World” was conceptualized. All the blogger needs to do is tour around Queensland, blog about his experiences, and get paid. The results of the campaign was astonishing, aside from the 7 million visitors recorded on the site, 34,000 people submitted their video application.

A 34-year old British guy named Ben Southall got the job. Tangible results of the viral marketing campaign are already being seen. Virgin Blue is not flying direct between Hamilton Island and Sydney. In addition, large Australian firms are also looking into the area for their events and conferences. There are some parallels between this tourism strategy and the hotel revenue management. And there are a few lessons that hotel revenue managers can use to increase RevPAR and boost profitability.

The most important aspect that should be recognized in this campaign is not the fact that they were marketing, but the fact that they were using social channels to achieve this level of success. Some tips to increase hotel profits using social media remembering that it’s not about the amount of budget you set aside – a big benefit of viral marketing is that it can create a big impact on a limited budget. In short, there’s no need to pay much to get the desired result. The main thing you need to remember is to have something worthwhile to share so people will talk about it.

Also, focus on content rather than traffic. The ultimate goal of most hotel revenue managers is to increase their site traffic, and hope that this will increase hotel sales. But to encourage people to share your products and services with their friends, content is more important.

A Closer Look at Hospitality Revenue Management and Internet Marketing

There is no double that hotel revenue management and internet marketing is fast coming together. At the Hospitality Sales and Marketing Association International (HSMAI) convention in Anaheim, California, the two topics were extensively discussed. People from both sides of the industry thought of ways to make the two disciplines complement each other to create demand in today’s turbulent economic times and beyond.

According to Eric Pearson, the senior VP of Brand Performance, Americas, Intercontinental Hotels Group, “revenue management and internet marketing professionals are the new rock stars of the hotel industry”. And indeed, it is easily apparent that the potential contribution they can give is significant.

The presentation he presented showed the types of benefits the hospitality industry can experience (ie. increase hotel sales, increase RevPAR, revenue optimization) if the two are used together. The strategy should be backed by concrete analysis and real time data to drive hotel profit growth even further.

Main Points of the Conference

In essence, the conference has several main points, one of which is the increased interdependence between hotel revenue management and internet marketing strategies. E-commerce, hotel pricing strategies, and revenue optimization techniques are all looked into. Right now, it was noted that forecasting the demand and knowing the buying behavior of the customer is the key to maximize hotel profits.

Meanwhile, on the breakout session “Social Media Strategies”, tips about what hoteliers can do to boost profitability were also discussed. Things like the best practices to measure ROI, identifying time and resource allocations, as well as employee policies were looked into. Attendants were advised to take advantage of the various measures available to them including marketing, sales, and other consumer information that’s readily available on social networks.

The lessons that were gleaned from the conference were very beneficial. If used wisely, it can contribute greatly to increase RevPAR and boost hotel profit.

Rate Integrity at Times of Economic Crisis Part 2

It is safe to say that the world has changed. The hotel revenue management strategies that worked a decade ago may no longer work today. But throwing all rate integrity strategies out of the window isn’t right either. It is crucial for hotel revenue managers to be smart in formulating and implementing yield management techniques in today’s business and leisure environment. Discounting across the board might increase hotel occupancy, but it may not necessarily increase hotel RevPAR and boost profitability.

So is avoiding drastic rate discounting a good strategy? It might sound like it but at the end of the day, hotel revenue managers still need to find a way to fill out those rooms. A creative and dynamic solution is required to solve this problem. Rate discounting might just do more harm than good over the long term. Here are some proven strategies to check out:

Rate Parity – though this can be used as a guideline, it is not a law. Revenue management staff knows that hotels need to please distributors in order to succeed. Without hotel rate parity, making a hotel profitable is difficult, if not nearly impossible. Adapting the strategy to certain market changes and being dynamic builds on the success.

Price Fencing – reward guests for loyal stays. If they stay for a week, maybe you can offer then 1 night free. Or if they reserve for five nights (or any length you have in mind), give them steep discounts.

Lead Time Pricing – giving early bird discounts is still a strong strategy. Determine your booking window and then before the usually pick-up curve, this is where you can offer the discount. Your competition might still be asleep while you are eating a significant portion of their market share.

Rate Integrity – this is what the article is all about. It is actually not necessary to maintain your old rates. However, it’s not required for you to go as low as your competitors as well. Just look at the stock market, sometimes it is up and at other times it is down. The same principle works in hospitality revenue management. Just never go too low that your brand itself starts to suffer.

Rate Integrity at Times of Economic Crisis Part 1

Given today’s severe economic crisis, the concepts of rate parity and rate integrity feels like it came from another planet. Over the last few months though, hotel revenue management experts have been advising that dumping hotel rates is not the right strategy to create demand; this recommendation comes amid the worst recession in US history for several decades.

However, even an international brand like Starwood Hotels & Resorts is not immune to outside pressure. The company has cut its rates by as much as 50% to unload too much excess inventory. This cut affected its 600-something properties around the globe. It is important to note though, that cutting hotel rates must be the last option. Keeping a long-term mindset can benefit the hotel over the long run and increase hotel profits when the economy starts to recover. But here comes the question about hotel rate integrity:

How Will Rate Integrity Hold Up If Everyone Else Cuts Their Prices?

If 5-star hotels around your area starting lowering their rates to 3 to 4-star levels, what will happen to rate integrity? Everyone within the hospitality revenue management strategy will be pushed to do the same. In essence, rate integrity is the perceived consumer value. They know that they are buying an inventory that have a certain value and is set at the correct price.

Depending on the room amenities and season, they will pay a bit more or less; and they are willing to do so. Fencing and yielding are already accepted concepts but there is a strong acceptable psychological price range for consumers. If the value is set too low, they might start thinking that the hotel property has less-than-stellar amenities.

The question that many hotel revenue managers is itching to ask is, will their customers still pay $200 for their room if the hotel next door charges $100 or even below that rate? The truth is, the answer cannot be generalized. While many will instinctively say “no”, certain guests also have various factors to consider including their privacy, the service, and the number of people staying at the hotel. In general, hotel revenue management strategies that are quick to adapt to the changing environment are the ones that get most of the opportunities available in the marketplace.

Hotel Revenue Managers Need to Work Harder to Penetrate the Internet Marketplace

Interacting with your target consumers online is not the same as talking with them face-to-face. This is the reason why hotel revenue managers, and most companies involved in the hospitality industry must work even harder at enhancing end-to-end site experience for their users. Building a strong, long-term relationship with guests requires constant follow-ups, updates, and encouragement. According to research studies conducted by eDigital Research, online travel sites have to go beyond the “wow” aspect and into the real needs and wants of hotel guest to increase hotel profits.

The first eTravel Benchmark revealed that the online travel industry, as a whole, is actually competing with the cutting-edge technologies being used by companies in other industries. Consumers are now expecting consumer service, user-friendliness of the website, and good navigational structure. Failure to meet these requirements will mean that the potential guest might be disappointed in what the yield management strategy of the hotel.

Aside from hotel revenue managers, airlines, restaurants, and cruise websites also need to focus their attention to these findings. It will help them come up with effective hospitality revenue management strategy that will work over the long term. The research, in particular, revealed that most airlines usually have very poor customer service.

There is only one airline, British Airways, which was rated as one of the top 10. Meanwhile, British Airways and Virgin Atlantic did well for email customer support. While customer support problems are not hobbling the hotel industry at this stage, it is crucial to keep it that way. After all, it is actually easier to switch hotels due to the vast range of choices than to switch airlines.

As Derek Eccleston has said, “in a sector whose customers are particularly promiscuous – switching brands for a better deal, looking for recommendations and picking the purchase channel that most suits them at that particular time – failing to perform well across the board is more than a missed opportunity, it is commercial suicide.”

5 Effective Ways to Get More Friends, Followers, and Fans Online

So you’re interested in building substantial web presence on the internet, now the question is, what strategies will make it possible? There are actually so many ways to promote a website over the internet. Selecting the right strategy is a different matter.

Beyond search engine optimization (SEO) and pay-per-click (PPC) promotions, building a large following through social networking sites can encourage loyalty. Gaining customers in the hospitality industry doesn’t usually work when someone visits your site for one time; it is about gaining their trust and confidence. This is a good way to increase hotel sales and boost profitability.

Some of the strategies you can implement to increase RevPAR include:

Start with Individuals Who Already Know Your Company – try adding a Twitter or Facebook address on your company’s site and at the bottom of your email signature. Readers will be encouraged to sign up. And once they do, this is a chance for you to strengthen your relationship with them and improve hotel revenue.

Build a Social Hub – be sure to include a social hub webpage on your site. This can be the “About Us” section, just include options such as “Send to Friend”, follow, and become a fan options. This will enable them to be aware of new developments on the site as well as share your business to others.

Invite People – pepper your website with invitations for people to become your friend, follower, or fan. Once they accept your invite, they will receive notifications every time new developments are posted on your site.

Interlink Your Social Web – this is an incredibly helpful technique. If you already have thousands of “friends” in Facebook, place your Twitter links to your page as well. These will help you build a loyal fan base that is updated about your current promotions and hotel revenue management strategies.

Give People a Reason to Join – because social media has been abused by many users, it is inevitable for individuals to be wary of signing up or joining the social network of a company. Make sure you give them something to join whether it’s great content, cool offers, or discounts.

Try to implement the above-mentioned techniques and watch your hotel profits shoot up.

New Projections: US Room Rates Forecast Lowered by Smith Travel

The Smith Travel Research has released a finding the hotel revenue management industry has long been waiting for: its room rate forecast for the later part of 2009 and 2010. As the title implies, Smith Travel has significantly lowered its room rate forecast in the United States. This will definitely affect the hotels’ bottom line and their succeeding yield management strategies. As if that’s not enough bad news, the research agency also expects moderate declines persist through 2010.

Currently, it is projecting that the average daily rate will lower to 9.7 percent in 2009 and the revenue per available room will lower by 17.1 percent from last year. Just last April, the agency had projected RevPAR decline of 9.8 percent as well as a rate decline of 3.6 percent. Occupancy will also decline by 8.4 percent and will now amount to 55.4 percent, just slightly down from its earlier projection last April (56.5 percent).For 2010, the same declines in all three metrics are expected to continue. Smith Travel projects that the room rate will drop 3.4 percent, the occupancy by .3 percent and RevPAR by around 3.7 percent.

According to Mark, Lomanno, Smith Travel’s president the key to the hospitality industry’s recovery is rebound in group travel. Group business is an important segment that every hotel revenue manager should look into. It will have to return to 90 to 95 percent of its levels before the economic crisis. Reaching this figure will be very beneficial to hotel revenue management strategy because of transient demand. In addition, it will provide hoteliers with price leverage.

Overall, the hospitality industry is not going to recover anytime soon. And it will take a lot longer to reach the 2006-2007 levels. Even the demand at the first part of 2008 may be difficult to achieve. As Lomanno further added, “on an inflation-adjusted basis, it’s probably going to be longer than six years before the rates get back to 2007 levels.”

How Do Travelers Use Search Engines These Days?

The internet plays a big role in the travel industry today. Everything from flight schedules to updated hotel rates can be seen online and travelers are taking advantage of the easy access of information. Both leisure and business travelers can benefit from using the internet. On the other side of the equation, hospitality revenue management companies can also benefit from this development.

Making their information easily accessible, conducting search engine optimization tasks, and trying out other web promotion strategies can increase RevPAR and increase hotel sales many times over. It is no secret that travelers these days use search engines especially the major ones including Google, Yahoo, and MSN to find travel deals and gain information about vacation alternatives. 34% mainly rely on search engines while another 23% prefer to look into the web pages of specific countries or location to get more details. Then, this is followed by online travel portals such as Travelocity and Expedia which accounts for 22%.

Before these desired results can be achieved though, determining consumer behavior and the changing trends in the market is important. For example, as searchers become more familiar with online technologies, their search patterns are becoming different as well. It is also important to take note that the number of travel portals including planning and booking sites have grown dramatically through the years. Hotel revenue managers need to factor in these changes in order to compete effectively in the marketplace.

In addition, utilizing a hotel software such as RevPAR Guru can enable hotels to give appropriate pricing through demand forecasting. This pricing software also helps hotel revenue managers keep up-to-date about what’s happening around them. Through the software’s functionality such as GDS distribution, inventory management, pricing software, and other applications, the hotel revenue management teams will be equipped with the right tools to meet the challenges today.

Online GDS Distribution vs. Traditional Booking Channels

The hotel distribution channels that are used today, specifically travel agents and contact centers, can be very expensive to maintain. And when you take the current economic situation into consideration, it becomes even more attractive. However, maintaining these hotel distribution channels is still important because certain customers will look for these services.

What hotel revenue managers can do is to supplement these channels to increase hotel sales and boost profitability. Using online hotel bookings can result to better distribution, lower operational costs, and higher improved efficiency. It has been estimated that the cost of sales through online and offline medium vary greatly. For instance, Hilton reported that they save an estimated $25 for the bookings they get online as compared to traditional hotel distribution channels.

Other hotel groups experienced the same phenomenon. Hyatt says it costs $3 as against the $9 they shell out in operating a call center. The 6 Continents as well as the Marriot Group reported $5 per booking if they use online GDS distribution systems. So what can you do to take advantage of travel portals and online distribution systems? Well, there are many techniques that can help you in this.

Link to Popular Travel Communities

Make sure that your hotel is included in popular listings of must-go-to hotels. Travelers trust the opinion and feedback they receive from reputable online communities. It is critical to ensure that your brand is established in these sites to increase hotel sales and reach profit optimization.

Aim to Rank Higher

Nowadays, it is very difficult to land at the top 10 results in the search engine results page if you target generic keywords. Since this is the case, make sure that the keywords you use are as specific as possible. If you are located in Florida Keys, then include this in the keyword. Optimize the name of the street if it is popular among travelers as well to boost profitability.

Effectiveness of Loyalty Programs in Increasing Hotel Sales

Because of the recession, American consumers are still at the phase when they are cautious about spending. They want to derive value from each dollar they shell out. Many hospitality revenue management companies operate under this concept. So they offer loyalty programs to encourage people to spend. But the question is, does this method really work?

Loyalty programs are nothing new in the hospitality revenue management industry. In the past, it has proven to be effective although it is certainly tricky to implement. In today’s business climate, using hotel loyalty programs to increase RevPAR and achieve profit optimization has only become trickier. Hotels.com, which commissioned the survey, points out that there are shortcomings that had been identified using this technique.

Some of the most obvious problems include its heavy restrictions, complicated fine print, and big redemption requirements. Majority of travelers would not be able to meet these requirements. In fact, only frequent business travelers, who are not looking for these deals anyway, benefit from it. Based on the survey conducted, travelers said that:

• 93 percent want to see improved terms on their travel memberships
• About half said that they were not able to use their benefits last year
• Around six out of 10 people want less restriction on how benefits can be used
• One third of those surveyed said that the bonus is not as great as was advertised
• More than a quarter dislike the fine print attached to their membership

If hotel revenue managers want to be more competitive and increase RevPAR, taking a second look at their loyalty programs may be worthwhile. It provides customers with a sense of value and “being special” at a reasonable cost to the hotel. In addition, if these clients really become “loyal”, then yield management can drastically be improved over the long term. This can increase hotel sales and boost profitability: the two things all revenue managers aim for.

Integrity of Hotel Reviews May Have Been Compromised

Can too much of a good thing be bad? It is, if these “good” things are actually based on lies and misinformation. Similar to almost all industries in the world, revenue managers are not immune to the temptation of tricking people in an effort to boost hotel profitability. For example, some have resorted to posting fake reviews on popular web portals to increase their web popularity. It isn’t so bad if they can live up to these promises. But the problem lies mostly in principle.

As if that’s not bad enough, some hotel revenue management staff has even resorted to bad-mouthing their competitor online. This unethical practice undermines the credibility of user-generated content available on the internet. People used to trust to feedback of their peers but with these kinds of developments. However, as more people find out about the unethical practices of certain firms, they might start to think twice before looking into hotel reviews online again. It is possible that they might simply revert back to their old networks for information.

There are many other reasons why faking reviews should not be done for the purpose of increasing RevPAR and boosting hotel sales. Popular portals such as TripAdvisor.com are now cracking down on unscrupulous hoteliers. In fact, the site has already posted a warning as well as a disclaimer telling users to be careful about the practices of certain establishments.

Tripadvisor.com is not alone in its quest to clean out fraudulent reviews. Beyond the hospitality revenue management industry, technology companies like Apple are also utilizing certain measures to preserve the credibility of its site. For example, the tech company had required customers to download or purchase its products first before they get a chance to review it on the site.

These developments should serve as a warning to yield management teams not to engage in misleading practices. Technology is fast catching up and soon, they will not only be penalized, their reputation will also be destroyed if they get caught.

Should You Train the Staff in Revenue Optimization?

Is it a good idea to put hotel revenue management at the hands of the hotel staff? The Carlton Hotels seem to think so. Many hotel revenue managers see yield management as a centralized function that should be done at the top. With the new technologies available today though, it has become possible to decentralize this function efficiently to the hotel staff. Each hotel revenue management personnel can be empowered to make data-drive revenue management decisions that can help the hotel take advantage of opportunities in the market.

However, before you think that this is a good idea, it is important to train hotel revenue management staff sufficiently to make important decisions. Jumping into this blindly may do more harm than good over the short and long term. For example, if one employee gave a bigger discount than another to clients in the same market, the guest who paid more might become disappointed. There should be a reason why certain levels of discounts are given. Pricing decisions in the hotel cannot be based on gut feel alone.

It is also important to realize that there are software requirements involved in this strategy. Currently, most revenue management platforms are designed for profit optimization through using historical data, market trends, and demand forecasting. This is already a good platform. Customizing it further might be necessary depending on the accessibility the revenue manager wants to give the staff.

RevPAR Guru is a good software for this purpose. It can transform the way yield management is conducted in the marketplace. In addition, the software has the capability to aggregate current data into the hospitality revenue management process to increase RevPAR and provide best results. Because the creators of RevPAR Guru also realize that the marketplace is highly dynamic, this platform is created to be stable and flexible at the same it.

Avoid Hotel Price Cuts With These 5 Tips

At first, many hoteliers might have tried to focus on providing value to their loyal clients by giving excellent service, great amenities, and following-up with them. For many though, these efforts are not nearly enough.

Before giving hotel rate discounting a try though, it might be a good idea to look into relevant historical facts. Economic downturns and recessions are not a new phenomenon. Sure, many younger hotel revenue managers today might have focused more on keeping up with demand instead of stimulating it because their experience mainly occurred during the good times.

A look at the hotel price cuts from 2001-2002 reveal that this yield management strategy had short-term and long-term consequences. Instead of boosting profitability, it did just the opposite because it had damaged the entire hotel sector. When one hotel tries to increase occupancy by cutting their price, this is quickly copied by their competition. Once it happens, the trend is hard to stop and it might affect the organization for many years to come.

Fortunately, there are effective hotel revenue management alternatives that can increase RevPAR and increase hotel sales even during the bad times. Among these include:

1. Concentrate on Increasing Ancillary Hotel Profits – follow the example of airlines. A significant part of their revenue comes from fees and various charges. For example, United Airlines expects to derive $1.2 billion from ancillary revenue alone.
2. Consider Opaque Channels – these types of hotel distribution channels become more useful during an economic downturn. It will help sell excess hotel rooms without the lure of a discount.
3. Use Smart Discounting – drastic price cuts are not on the same league as smart discounting. Innovative and profitable packages can be created by the yield management team.
4. Study Customer Segments More Deeply – divide your customer base according to price sensitively. Afterwards, gauge how discounting will affect your hotel operations over the short and long term.
5. Think of Ways to Add Value – value-added factors are important to the customer. They need to feel that they are getting their money’s worth from your hotel. Provide value effectively and see achieve profit optimization.

Should hotel revenue management team go for hotel rate discounting to rev-up demand? While it goes against the better judgment of many yield managers, this option is becoming increasingly hard to resist. But with the tips above, there is no reason for you to resort to price cuts.

Google City Tours: How Will It Impact Hotels

Technology giant Google has recently released their latest lab project called the “City Tours”. Their foray into the travel industry was launched relatively silently compared to their other ventures. Nevertheless, being Google, this development will inevitably have a very big impact on hospitality revenue management and the industry as a whole. There are many implications related to this application.

It is crucial not to forget that Google is a powerhouse in anything internet-related. If it so desires, it can release any travel application with various functionalities. And if it makes the decision to create a travel portal, it may very well kill its competition. The company could have developed a hotel comparison software, a search engine for airline flights around the world, or even a review aggregation tool. Instead, Google decided to concentrate on local attractions using the Google Maps API.

The Google City Tours is good news for everyone in the hotel industry from the hotel revenue manager to the yield management staff. On the part of Google itself, their strategy is a good move. It is related to their thrust to provide tools and features that will supplement their current application. For example, the Google Local Search as well as their business database from partners will help travelers get suggested itineraries anywhere in the world.

Using the interface is very easy as well. Though the features are currently limited, its potential is immense. Every hotel revenue management teams from the US to Asia should know how to utilize this application as soon as possible. Tourism will be influenced greatly by the colossal amount of data that points to this index. Once it is integrated into mobile devices, hotels and other hospitality organizations that are included here will experience increase RevPAR, an increase in hotel sales, and optimal profits.

Maintaining Rate Integrity to Increase Hotel Profitability

In the twenty years that revenue management was put into practice within the hotel industry, most of the philosophies and techniques that had been learned were from a strong economy. This presents a very challenging problem in today’s environment because hotel revenue managers are ill-equipped to deal with it. There is very little historical data that will show how yield management coped up during the tough times. Because of this, many hotel revenue management staff are still feeling their way and are committing trial-and-errors.

One notable mistake is that many companies engaged in the hospitality industry are dropping hotel rates in order to increase demand. This trend can be observed everywhere from the United States to Asia. Fortunately, there is still a significant number of hotel revenue management teams that has the current crisis in perspective. Even during the worst of times, many hoteliers strived to maintain rate integrity as not to compromise their future positions.

It should be noted that dropping prices is never an appropriate response. For one, it will take a lot of effort on the part of the hotel revenue management team to bring the price up again and increase hotel profitability. And for another, it will hurt the brand value so the hospitality establishment might not experience the full benefits of recovery once it happens.

Occupancy challenges can be solved with creativity, innovation, and appropriate yield management measures. It was widely agreed upon, in the Revenue Management Roundtable in Singapore, that strong emphasis should be given to the investment in tools, technology, and people. This is the best way to cope with the downturn. Going back to basics is important. If you get this right, then the hotel is operating on solid foundation. In no time, the establishment can experience more bookings, increased RevPAR, and profit optimization.

Hotel Revenue Management Success: 5 Web Analytic Signs You Should Watch Out For

Sign 1: You Don’t Know How to Use Analytics to Meet Business Objectives

It is highly likely that you bought the web analytics tool believing that you’ll get important information. And these data might already be in your hands. The problem lies in deciphering the charts, graphs, and percentages so it will make sense to your business objective. If you’re dealing with this situation right now, don’t panic because you’re not alone. Many yield management teams have a hard time determining how analytics can be aligned with business objectives.

One tip to stop the confusion includes establishing the figures that needs to be analyzed before looking at the database. For example, if the objective is to generate leads, then measuring the number of leads is the right measurement for this objective.

Sign 2: No One Understands What the Dashboard Means

You might have the most attractive dashboard around, but if no one understands what it means, then it is useless. A lot of hotel revenue managers cram every minute detail into the dashboard in their effort to boost hotel sales. In some cases, these make it impossible to read.

The solution to this would be to go back to the beginning. Redefine what the organization’s goals really are and then assign a key performance indicator for each. If you want to increase RevPAR, for example, then displaying the occupancy rate and the average room rate is important.

Sign 3: The Hotel Revenue Management Team Needs to Be Reminded of the Key Performance Indicators

Right now, it is true that the analytics jargon is not yet that popular. And it is understandable if your hospitality revenue management team needs some guidance. However, if this has been going on for more than a year already, then it is time for some guidelines. Continue stating the hotel’s objectives, framing campaigns, and getting information about the key performance indicators. It might be a good idea to start with one person at a time. The sooner this strategy begins the better.

Sign 4: The General Manager of the Hotel Asks about the Site’s Number of “Hits”

Asking about “hits” is a sign that the hotelier does not understand the importance of analytics. Beyond the number of traffic the hotel website receives, the more important thing is the conversion rate. In trying to achieve profit optimization, quality is far more important than quantity.

Would It Be A Good Idea to Use Twitter in the Hotel Industry?

During the past several months, Twitter has gained a lot of momentum and attracted everyone from techies to celebrities. Popular figures such as Oprah, Demi Moore, and successful internet marketers all use this tool to enhance their relationships with fans/subscribers. Sysomos Inc., a leading social media research institute, decided to conduct a study on how this social marketing giant became successful. Its data contains the trends about Twitter’s growth and how it is being used by millions around the world.

• 72.5 percent of Twitter users opened their accounts in the first five months of this year


• 85.3 percent of users update their accounts less than one time a day


• 21 percent never posted a single Tweet


• 5 percent of users account for 75 percent of the site’s activity


• 93.6 percent have less than 100 users following them


• 92.4 percent of users follow less than a hundred people


• New York has the most number of users


• 50 percent of all updates are posted using mobile, web-based, and other tools outside Twitter.com


• More women use Twitter than men

So what do all these figures have to do with hotel revenue management? It is crucial to note that Twitter experienced astronomical growth in a very short timeframe using one technique: viral marketing. Understanding the concept of viral marketing is important for the effective online and offline promotions of hotels. It is a great way to increase RevPAR and maximize hotel profits.

In today’s environment, it has become more challenging to attract a decent market share in the hotel industry. There are many important lessons that the Twitter example can give in yield management. First is not to underestimate word-of-mouth on the internet. And second, to build a core group of loyal clients or users that can sustain its operations.

Hotels can also use Twitter as a tool to promote their services on the internet. This will increase bookings and improve hotel profitability when done properly. Establishing a connection with the top users can be helpful in accomplishing this goal.

Knowing Your Customers Though Online Travel Communities

If you were asked how well you know your customers right now, what would you answer? Beyond demographics, it is important to understand what your customers are really like.

Many hospitality companies have composite profiles that give details about their customer’s job titles, frequency of travel, and purpose of visit. But while it is important to know these things, it is no longer enough. Relying on impersonal information makes it difficult for hotels to connect to their clients at the deeper level. In fact, some hotel revenue management staff even describes it as trying to converse with a cardboard. Experts at yield management know that customers are not likely to respond if the offer does not suit their needs.

It is critical to finally recognize that hotel guests are real people. They have genuine needs, issues, and motivations that drive their behavior. Companies in the hospitality revenue management industry must know them deeper in order to respond to their concerns. In addition, they are also very dynamic and their situation can change easily. For example, in this troubled economic times, some of them might have lost their jobs, lost money on investments, or are otherwise just cutting back in preparation for tougher times ahead.

In this kind of critical condition, better monitoring is not an option; it has become a necessity for hotels to survive and thrive. More comprehensive market research is required to boost profitability. But aside from relying on historical data, it might be a good idea to get connected to the consumers now. Joining online communities to observe and learn is highly recommended.

Online communities are a good place to pick the customer’s mind and increase RevPAR. Join a community that has enough members to get a wide range of perspectives. It will also give you an idea about what general sentiments are like. Better yet, you can start a discussion yourself so you can know their feedback and suggestions.

3 Tips for International Hotel Internet Marketing

Catering to an international audience is very important in the hospitality industry. For this reason, hotel revenue management teams should look beyond their borders and look at opportunities elsewhere. A lot of yield management practices make the mistake of focusing too much on developing an English website without considering how they can promote their hotel internationally. Some of the principles in search engine optimization in English-speaking countries are also applicable elsewhere.

But it is also crucial to remember that there are cultural connotations in the wording of these sites. People will type the content differently. Improving hotel SEO means that hotels should be aware of these differences and think of ways to take advantage of it. It is challenging to optimize a hotel website for an international audience at the same time to boost profitability. There are certain guidelines that can help your online hotel distribution strategy a success though. Among these are:

Language Targeting – obviously, targeting an international audience means creating a website in that language. However, some hotel revenue managers make the mistake of simply translating their English content to another language. Direct translation would not be that effective in this case, it is important to consider accurate translation containing words international audiences use.

Register at Local Search Engines – registering at top sites like Google and Yahoo is a must. But in certain countries, there are preferred search engines that locals patronize. In addition, registering a physical address in that location may also be beneficial. It will give you the advantage of local listing. The process is pretty straightforward and is quite effective.

Relocate Your Site’s Hosting – one highly overlooked factor is where your site is hosted. Most hotel revenue managers will simply set up a virtual host in their existing server. While this is acceptable, it is important to note that Google and other search engines actually give priority to web servers located to the origin of the search. That is, if your targeted searcher is searching in France, Google prioritize the sites hosted in that country.

Finding the Right Online Marketing Channel to Increase Hotel Profitability

If you have $1 million dollar to invest in one online hotel marketing channel, which one should you choose? This is a very challenging question that every hotel revenue manager should know the answer to. It is a given that using a variety of tools is very helpful. But among these tools, there will always be one that stands out. Once you find the right tool for your site, it will generate a dramatically higher number of visitors.

With so many different hotel online marketing solutions available in the market though, it is easy to get confused. Fortunately, the tips below will give you a guideline on what hotel revenue management tool you should concentrate on. The right yield management solution lies in the individual strengths of the hotel, its capabilities, and its goals. So here are the hotel internet marketing channels available today:

• Display advertising – essentially means putting advertisements on third-party websites to generate traffic and create brand awareness. Some ad formals include overlays, banners, and interactive ads.
• Email marketing – the system of collecting email address (leads) and then sending their newsletters through emails.
• Pay per click advertising (PPC) – bidding for a placement in popular search engines on your niche. It gives instant visibility based on the keywords chosen
• Online public relations – this strategy mainly uses media online outlets to earn brand recognition and increase hotel sales.
• Search engine optimization (SEO) – SEO should always be part of a hotel online distribution strategy. Majority of users uses search engines to look for products, information, services, and ideas. If you’re not listed at the first page of the results page, then your hotel is missing out on an opportunity to increase RevPAR and boost hotel sales.
• Social Media Marketing – characterized by the method of using social media platforms to improve visibility through word-of-mouth and relationships.

As you can see, there are many ways to market your hotel online. The right strategy for your hotel depends on the company goals in revenue management (whether the focus is educating readers, increasing raw traffic, or boosting hotel sales). The budget and available resources within the company are important factors as well.

If the hotel has strong development resources then Search engine optimization and using viral content might be the best idea. On the other hand, if the hotel has strong creative resources then email marketing (copywriters) and banner advertising (graphic designers) is the best option. And if the company has strong social resources then obviously social marketing is the solution to hotel profitability.

Optimize Hotel GDS Distribution

The objective of improving the hotel distribution system lies in the Global Distribution System and it is not really as difficult as it first appears. Effective hotel revenue managers know that they can easily take control of their hotel GDS by knowing the opportunities available in their properties. These opportunities can range from marketing the hotel using targeted advertising so that they can be placed at the top of hotel listings.

Meanwhile, doing simple steps like using revenue management features such as “Hotel UpSell” and “Best Available Rate” can help as well. It is important to realize that there are actually tons of available opportunities to advertise within the hotel GDS. Still though, hotel revenue management teams should determine when the best time to advertise is and what messages should be given.

Specific GDS Promotions

Specific messages should also be promoted. For example, in some cases, hotels want to market a specific destination while some are pushing their brand to a new target market. A lot of GDS today can provide personalized programs that are customized according to the hotel’s needs. It can include various advertising tools that are available in the hotel distribution system.

Effective advertising tools usually available from major GDS include:
• Sign-in Advertising – direct advertising messages during at the period of signing in to the GDS by agents.

• Targeted Textual Advertising – helps hotels promote the products and services to the target market during the time when they are ready to make their decisions.

• Travel Agency Portals – usually related to graphical user interface or GUI. Hotel GUIs allows hotels to use the combination of text and graphics to make a bigger impact. Because of this, the tool is particularly beneficial when promoting brand awareness or a certain property with pictures.

• Online Itineraries – more visual content is used in this case. The strong images coupled with the strong push marketing strategy helps hotels make a greater impact in the minds of their consumers. This can ultimately increase hotel sales.

Each GDS should provide targeted promotional tools so that hotels can use this to further promote their brand or properties. Meanwhile, online hotel GDS can be composed of travel agency portals, internet brochures, and online itineraries; these can be maintained by the hotel itself depending on the GDS in question.

High-End Hotels Should Focus on "Best Customers"

Luxury brands that have established a name for themselves are now finding themselves in a bind. The bad economy has taken its toll on everyone. In fact, even highly successful establishments that had successfully invested in image marketing are forced to rethink their strategies and come up with new approaches. Does this mean that they need to lower their prices? It may be an option but this is not necessarily a good idea.

A lot of hotel revenue managers have found out that exploring strategies like the packaged goods approach can yield rewards. The so-called symbolic clients or those households with incomes ranging from $250,000 to $500,000 have become fewer. Because of this, the very definition of luxury is evolving. Though genuine luxury will still be noted for its inherent value, guests are now looking for great experiences including those that produce unforgettable memories, give unique experiences, or are sensually orchestrated. Taking advantage of these changing trends can increase hotel sales.

Boosting profitability also means getting out the comfort zone. Some luxury hotels are now experimenting with time-out travel such as relaxing vacations, eco-travel, and exotic travel. All these will aid in helping hotels thrive, increase RevPAR, and increase hotel profitability even during bad times. Luxury clients are usually educated consumers. They know when to put a premium of things even if it cost little or nothing. For example, luxury buyers are happy when they get dry firewood, can enjoy a hot bath, eat fresh food, or receive something in elegant packaging.

Smart hotel revenue management teams are now trying to focus on their best consumers in order to surprise and delight the. The “best customer” is defined as one who is more loyal, spends more, and refers friends to the hotel. In addition, customers who forgive readily when some errors are committed are the most preferred customers. And most of all, they are value-sensitive and not just price-sensitive.
Luxury brands need to identify who their “best customers” are and cater to their needs and wants especially during bad economic times. It will help them boost hotel sales and enhance overall profitability of the hotel.

Understanding American Behavior in Booking Travel

It is no secret that American travelers are now using the internet to get the best travel deals for their family. And once they are on vacation, it is their desire to spend as much time with their loved ones as possible. The chairman and CEO of Ypartnership, Peter Yesawich, provided an overview of consumer behavior with regards to their travel and leisure activities.

Citing the findings of the National Travel Monitor, he revealed that social values and technology play a big part in influencing American travelers. According to the findings, technology is especially important because 61 percent of travelers cited that they used the internet exclusively for their purchase decisions. In addition, the 2009 Monitor further declared that 56 percent of these travelers make their online travel bookings.

Based on the study, it seems that only 7 percent of American still go to travel agents exclusively for help. Meanwhile, 24 percent said that they used both travel agents and the internet in making their decisions. Aside from researching online, American travelers are also increasingly becoming active in online communities.

Price-Driven Market

Americans are using websites to check out the lowest possible price for their requirements. It remains the most important feature for searchers with 87 percent of them citing that this is the main reason they browse online. Another feature that can help boost hotel sales is the booking capability.

Effective yield management staff knows that this can significantly increase RevPAR and help maximize profits. In fact, 74 percent o f the respondents said that they prefer to book conveniently from the website. Other features such as the capability to share media content like photographs, videos, and articles are also very helpful.

Family Values is Still the Most Important

But before you think that price is the most critical factor, the Monitor discovered that Americans are actually more interested in spending quality time with their families. The intergenerational travel packages are quite hot because of this. In addition, many people still value their time. So they would much prefer to get personalized services than do everything themselves from scratch.

Information: Key to Successful Social Networking in the Hospitality Industry

In an increasingly interconnected world, social networking has become an integral part of hotel revenue management or any type of business organization in the service industry for that matter. Companies have struggled to discover how to take advantage of this opportunity. New research has shown though, that the to being successful on social networking is information acquisition. It will help boost hotel profitability.

This finding was recently published at the Information Technology & Tourism Journal. The reasons why people join social networking are because of the Social-Psychological and Hedonic benefits it provides. Their attitude towards online social communities such as VirtualTourist.com and Tripadvisor.com is heavily influenced by this.

Why Information Acquisition is Important

It is easy to assume that the reasons people join hotel social networking sites is because of the sense of belonging it provides. However, studies show that this reason only comes second to information acquisition. Consumers primarily search the internet for updated information, deals, and travel news. Meanwhile, hedonic benefits such as entertainment and amusement come third. Hotel channel management needs to focus on the three factors.

The survey, which these findings are based on, was divided into five categories including: benefits of online community activities, attitude towards the travel community, level of participation in these travel social networking sites, frequently used sources, and demographic profiling. Majority of the respondents were students and professionals in their 20’s and 30’s.

In essence, the research findings just proved what most hotel revenue managers knew all along. As according to the author, “tourism is one of the highest involvement industries” and because of this people “want to get as much knowledge as they can do reduce risk”. If you’re an hotelier, you can be sure that your company will benefit with increase RevPAR and hotel sales when you provide the necessary information.

In addition, providing relevant information that is up-to-date will help the travel community overall, attract web visitors, and increase your chances of converting these searchers into actual guests.

Hotel SEO: The Next Big Technique to Boost Profitability

Previously, hotels can simply rely on their location and brand image to drive revenues. Some just piggybacked on their partnerships with travel agencies and booking websites. But as the market becomes more competitive, it is becoming clear that conducting their own internet marketing and search engine optimization (SEO) initiatives is a key driver to future growth.

Getting bookings directly from the hotel’s website can dramatically increase hotel sales and overall revenue. Basically, the establishment would no longer need to pay a certain “commission” to their partners so the profits derived all remain within the hotel. Ranking high on the search engine has an added advantage. Customers can directly access the website and will be able to make judgments for themselves without bias. Other channel distribution partners might have existing agreements with other hotels and the establishment might not be optimally promoted using this medium.

Implementing other marketing technique will also be very helpful. Among the things you can consider include:

Copywriting and Blogging – helps the company become recognized leader in the field. It also connects the hotel with the consumers so it can create a lot of buzz. In addition, it is a proven yield management technique to increase traffic and improve visitor loyalty.

Web Marketing – in order to boost profitability, an all around web marketing strategy needs to be effected. It can increase hotel bookings, improve RevPAR, and maximize profitability.

Video Marketing and Social Networking – it has been proven, time and again that using Web 2.0 tools like videos, images, and blogs increases hotel revenue. Video marketing is becoming particularly popular these days especially when it comes to connecting social networks. Hotels can greatly benefit from this.

Email Marketing – newsletters essentially keeps you on the top of mind of your targeted consumers. This is because the audience will frequently be reminded of the hotel’s brand, its amenities, and the level of service it provides. If done properly, it can greatly increase RevPAR and boost hotel profitability.

How Does Hotel Internet Marketing Work?

Last August 2008, the Prophis eResearch conducted an in-depth study on consumer behavior when it comes to booking hotels online. The research involved 433 American consumers and it aimed to determine how much influence user-generated content, reviews, video, and other social media influenced their buying decisions. In addition, it also tried to explore how much impact meandering search engines and other websites had on their opinion of the hotels.

In essence, the research body discovered that while people still very much value the feedback of their family and friends (it ranks number 1 in terms of influencing their hotel booking), social media comes in second. Offline and online, this proves that word-of-mouth is the top trusted source of decisions. Online, hotels can take advantage of features such as “forward to friend”, e-newsletters, and reviews to enhance their brand image and boost profitability.

There are specific steps they can implement in their online hotel revenue management promotional strategies. Among these are:

• Web Copy – some hotels stop their website efforts after the initial site has been set up. It is important to continue updating the website with press release, news feeds, and other interesting info to keep consumers interested. This can drastically help increase RevPAR and hotel sales.

• Keyword Research – any internet marketer will tell you that research should be the foundation of any hotel online sales strategy. This is because promoting your site using the wrong keywords is just pointless.

• Alt Tag Placement – each web page needs to be appropriate alt tags for search engine optimization

• Meta Tag Placement – some hotel revenue managers underestimate the value of placing proper meta tags on the website. Relevant and original meta tags have been cited as one of the top reasons why certain websites rank highly on the search engine results page. The structure of the meta-tags will be discovered by search engine spiders and when it is found relevant, it will be ranked as such.

Hotel revenue managers can benefit greatly from the hotel online marketing trend if they come up with effective yield management strategies.

Hotel Industry Expectations for the Second Half of 2009

According to the PKF Hospitality Research, RevPAR which is an important indicator of the hotel industry’s health, will bottom out in the third quarter of 2009. After months of decline, it is expected that the industry will finally rebound. This news is bound to give hotel revenue managers around the world a sense of relief. The escalating trend of declining hotel revenue began in the third quarter of 2008 so it really does come full cycle if this trend reverses itself in a one-year timeframe.

The President of PKF Hospitality Research Mark Woodworth said that while their finding is welcome news, 2009 will still post the “weakest year on record for the domestic lodging industry”. In addition, revenue per available room for 2010 will still be disappointing even if it is not as bad as this year. Taking into consideration the employment level and the demand for lodging, it becomes clear that RevPAR can decline by 17.5% overall for 2009. In 2010, decline in RevPAR will not be as bad but it is still at 3.5%.

These factors point to the conclusion that effective yield management should still be practiced by the revenue management team. Also, the hotel revenue management strategies such as increasing online presence, using hotel software, and training the service staff should be continued and further strengthened to give hotels a competitive edge.

Mr. Woodworth further added that “If you are wondering when we’ll start to see actual growth in RevPAR, then you’ll have to wait until 2011” though the “operating environment is going to get a little less painful”. The decline for lodgings in the United States peaked during the first quarter of 2009 at 8 percent. According to the Hotel Horizons, demand will continue to regress but at a diminishing rate.

For the remainder of 2009, the projected quarterly decline is 4.7 percent on the average. Overall, hotel revenue will decrease by 16 percent this year because of the decline in RevPAR. Beyond the year 2009, there will be an average annual increase of 3.2 percent in the next four years according to the same study.

How to Implement Yield Management Strategy at the Front Desk

In today’s highly modern environment, it might be tempting to focus on new hotel distribution channels such as popular travel portals and agency partnerships but there is an important segment that hotel revenue managers need to focus on as well: walk-in clients. Though this market may not be as big as the number of consumers you will receive from the internet and elsewhere, it presents great opportunities for the hotel. Walk-in consumers are usually those who had experienced the hotel’s service in the past, were referred by their friends, or simply received the hotel’s value proposition.

The front desk staff, in this instance, will assume that the walk-in client is a booking client but this is sometimes not the case. This is because they might be put off for some reason whether it is the high rates being charged to them or the “curb appeal” of the hotel does not suit their preferences. Whatever the case, there are techniques that will help improve hotel sales and boost profitability from this market:

Connect with Clients – it cannot be stressed enough that establishments in the hospitality industry, particularly hotels, should focus on service. The front desk staff and everyone in the front line should be trained to meet the needs of the clients whether during the peak or off-peak season to optimize hotel profit. Employees need to establish eye content, smile, and greet guests before they are greeted.

Offer Alternatives – depending on the availability of hotel rooms, which can use established using the inventory software, hotel revenue managers can offer two or more choices to the guest. For example, instead of quoting the highest rates, options should be given upon the guest’s inquiry. Some alternatives can include room vs. suite, view vs. non-view, and standard vs. deluxe among others. Doing this helps changes the question on the client’s mind from “should I book here?” to “what room should I get?”

Describe the Hotel’s Offering Properly – instead of directly using terms like “deluxe rooms” and “continental breakfast”, it might be a good idea to fully describe what these services entail. Put yourself in the guest’s shoes and talk in the kind of language they would appreciate. This is hotel revenue management at its best.

Increase RevPAR Using Online Distribution Channels

Utilizing direct online bookings seems to be the best solution for struggling hotels. With the credit crunch all over the United States, Europe, and Asia, it seems clear that innovations should be of utmost consideration among hotel revenue managers. Most companies, especially those involved in the hospitality industry, are working to simplify their current processes and benchmark against market leaders to boost profitability. At the center of this initiative is the utilization of cutting-edge technologies that will help increase RevPAR and improve hotel revenue from the internet.

For most hotels, increasing their online presence will effectively lower their cost and reduce the need for other hotel distribution channels. Doing so will help improve direct brand recognition as well as improve their profit for every booking. And if you add the convenient and opportunity of being available 24/7 on the internet, it is only to be expected that hotel sales will shoot up dramatically.

Using software applications such as the RevPAR Guru can help in this instance. After all, it is not enough to be available anymore. It is important for hotel revenue managers to concentrate at their yield management. They need to use inventory software and useful hotel software to find out when they should lower their rates and when they can charge more.

In addition, it is also important to take note that transforming the hotel’s website into a 24/7 booking channel is crucial. Certain individuals prefer to do everything online instead of getting up and calling on the phone for reservations. There is a huge opportunity in this segment. Implementing all this can lead to minimal distribution spending, enhanced loyalty, and increased hotel sales.

The first step into reaping all these benefit is to realize that internet marketing, search engine optimization, pay-per-click campaigns, and other online strategies can be useful. As the internet becomes an even more important part of generating hotel sales, hotel establishments that offer online booking solutions have a better possibility of attracting untapped markets.

3 Tips to Increase Hotel Sales This 2009

Even though the market is tough and almost every hotel is struggling to survive, it is still possible to increase hotel sales in 2009. It is just important to think of innovative ways to grow hotel revenue and provide value to the consumer. Jumpstarting hotel revenue starts by looking at the opportunities in the market with increasing hotel bookings, RevPAR, and average rate in mind.

Boosting profitability starts with knowing what your customers want and need. Determine how the inventory can be best utilized. In addition, providing a complete hospitality experience by setting up meeting space, restaurants, and fitness facilities can provide a good experience for the guests. Here are other 5 tips to increase RevPAR and increase your hotel revenue this year.

Cater to Families – hotel revenue managers can guarantee adjoining rooms to meet the needs of people traveling in groups. Charging a minimal surcharge will ensure that your hotel will be the preferred option compared to your competitors. And when you’re offering complimentary breakfast, make sure that there is a package for the whole family too. Just charge $5-$10 for the third or fourth child to get their loyalty. Adding a menu for children is likewise a good idea.

Last-Minute Getaways will Continue – most people have unpredictable schedules. That’s why last-minute bookings will still be prevalent even if majority of customers prefer to schedule everything in advance. With this in mind, make sure you take advantage of this opportunity by creating a suit package. Make sure you promote your last-minute deals online by utilizing email marketing, search engine optimization, pay per click, or adding your site to travel portals.

Closer-to-Home-Vacations – another apparent trend nowadays is that both leisure and business travelers are deciding to meet or take a vacation somewhere closer to their home. Though this may sound like bad news for hotels that rely on foreign travelers, it actually presents an opportunity for many. Consider advertising locally more than you used to. You might be surprised by the resulting increase in RevPAR and profit optimization.

Coping Strategies for Revenue Managers during a Recession

During a soft economy, hotel revenue managers struggle to increase hotel sales. Because hotel revenue was strong during the past few years, they are used to managing demand, not generating them. Out of panic or perhaps desperation, some are slashing rates too low. For the whole industry, this can be a bad signal because everyone will suffer. The already low hotel revenue might dip even further. Responsible discounting should be practiced by all players in the hospitality industry.

Beyond that, there are certain revenue management strategies you can implement to keep your brand strong and your profitability high.

Watch Your Competitors – it may be tempting to cut your price drastically to attract a large market share and boost profitability. But this strategy simply won’t work. You’ll just get one-off customers instead of loyal ones. Instead, you should research on the competitors’ hotel rates and look at market data. Here, you can decide how much you can lower your rates and which market you should lower it to.

Look at the Needs of the Clients – instead of looking at what your hotel can offer, start looking at what the clients actually need. Determine the requirements of your target market and strive to meet it. In addition, it is also important to be visible so look at specific mediums your customers frequent.

Improve Your Hotel Rate Distribution Strategy – distributing your service using online distribution channels is a method worth a look. At the same time, be aware that your hotel has various types of clients. If the 80/20 rule holds true, effort should be concentrated on the 20 percent market that gives 80 percent of your income.

Reduce Commoditization – it all comes down to what you can offer the customers. Revenue management is not about competing with the lowest price possible; it is competing based on giving value to clients. Ultimately, most customers will choose a hotel they think will give then the best value for money based on the location, facilities, and service of the hotel.

Tips for Effective Hotel Channel Management

With the recessionary economy today, travel decisions have changed dramatically. For hotel revenue managers to maximize profits, they need to understand where their customers are coming from. One of the biggest hotel booking channel is the coordination with meeting and travel planners. Understanding how this segment operates is important to maintain consistent profits and boost hotel profitability.

Golf, spas, and clubs are taking second place. Travel and meeting planners are pressured to come up with value for money proposals that are in-tune with the business environment. Expectations of the hotel facilities go back to the basics. Among the things that are necessary include reasonably price food and beverage, internet access, cable TV, desk, chairs, and comfortable bedding.

In addition, a lot of planners need to minimize travel expenses. Thus, most of the sites they choose for meetings need to be close to airports, the office, or the area should have affordable rental cars and other transportation. As you can see, yield management today is more focused on providing the most basic amenities with excellence. And as always, the hotel service of the establishment itself is of foremost consideration. The reasons why all these changes were made include:

Practicality – the practicality the hotel provides is a crucial consideration for planners. It is important to give an impression that the establishment offers value for money. And that everything that is needed by the guest is already provided by the hotel.

Reliability – before closing in and increasing hotel bookings, smooth transactions are required. No one wants to deal with an unreliable hotel with changing policies. Being reliable also help those in the hospitality industry build relationship and increase hotel sales in the future.

Building on these Relationships – once relationships have been established, it should be maintained. Hotels will be giving up their advantage if they don’t strengthen these types of relationships especially if it involves a profitable hotel distribution channel. Joining social networks, getting recommendations, and receiving good feedback will all inspire others to try the hotel.

Relationship Marketing Online Can Improve Hotel Sales

If there’s one thing certain in today’s economy, it’s the fact that hotels will not thrive if they cut-off their marketing budget. In this instance, it is important not to completely eliminate advertising and promotions; it is to make every cent count. Revenue management will play a big role in this instance. Making do with less is the key to optimizing hotel sales and boosting profitability. Delivering effective and customized messages through all major hotel sales distribution fronts including print, web, and through partnerships will establish an emotional connection with consumers.

It is a recognized fact that conducting a personalized campaign such as creating customized landing pages, demographic profiling, and joining online communities will enable hotels to connect with customers emotionally. This will deliver unforgettable experiences that can form continuous relationships and long-term profitability with the hotel.

Creating Relationships Online

Because of the relatively impersonal nature of online marketing, most hotel revenue managers mistakenly believe that just setting up advertising campaigns such as pay-per-click (PPC) and banner advertising is enough to generate online hotel sales. This cannot be farther from the truth. With the emergence of social networking sites, consumers are seeking personalized service from the hotel.

In addition, prospects, now more than ever, have access to information and reviews that were previously unavailable. Instead of looking at this as a threat, those involved in the hospitality industry can look at this as an opportunity. If they provide good experiences to their existing guests, these customers can provide good feedback on their service.

Positive reviews have the potential to significantly increase hotel online bookings and ultimately, improve hotel profitability. Existing customers can reach others through user-generated content sites and blogs. Meanwhile, hotels can further enhance relationships through email marketing, networking, and community participation.

Studies also reveal that search engine optimization and marketing also rank high in terms of generating internet revenue. Combining all these better business ideas will inevitably improve hotel revenue.

From Managing to Generating Customer Demand in Revenue Management

With the stagnation in the market today, hotel revenue managers need to shift their focus from managing demand to generating demand. Supply will remain consistent because with the exception of capacity expansion, this inventory is fixed. Previously, hotel revenue management was designed to maximize profits during the high and peak season. After all, any yield management teams are always on the lookout for better business ideas that will increase hotel sales and boost profitability.

No one probably expected that such a drastic turnaround can occur within such a short timeframe. Right now, every hotelier is scrambling to use hotel revenue software not to manage demand but to increase it through accurate price predications, improve hotel online channel distribution, and analyze market conditions. Nevertheless, it is important to recognize that hotel revenue management plays an even bigger role in the tough times than in the good ones. To help you improve your yield management strategy, below are some tips:

Analyze Existing Market Strategies – before reacting to current difficulties in a “panic” mode, it is important to step back and see what methodologies are currently effective. If the previous marketing plan implemented by the hotel is still working, it would be best to complement it instead of eliminating it altogether.

Restructure the Value Proposition of the Property – what kind of message does the hotel send out to prospects? Looking into the value proposition found on the website, travel portals, and even travel agencies have a great impact on the customer’s buying decision. It is crucial to know whether you should brand your hotel as a “family-friendly” establishment, a “pet friendly environment”, a “business accommodations hotel” or any other proposition.

Make the Customer Find You – potential customers cannot stay at your hotel if they don’t know you exist? Market your hotel effectively online and offline. Your business should be visible across all hotel sales channels. This is one of the key methods of increasing hotel bookings and RevPAR.

Hotel Profits to Increase - Goldman Sachs

While everything in the hotel industry seem kind of grim these days, an analyst at Goldman Sachs thinks otherwise. Steven Kent said that investors should be buying hotels shares already because it presents a huge opportunity in terms of future earnings. As expected though, market sentiment to his perspective was lukewarm. He further added that the “economy is not too hot” that’s why expense control remain present. On the other hand, it also is “not too cold” that’s why travel purposes are loosening up.

So what does this announcement mean for hotel revenue managers? Well, as supply contracts, it will group to a halt over the short term. In the next few years, room rates can drastically increase because of shortage and asset values will start to go up. Another factor Kent points out is the revenue per available room. Though everyone certainly wants to increase RevPAR, it is also a good indication that this key measure didn’t turn negative until the second part of 2008 even as other industries suffered.

Hotel Revenue Management Techniques for Today

While waiting for the market to get better, there are many yield management strategies that can be implemented to increase hotel profitability. This is because while the future holds a lot of potential, today’s market conditions are still undeniably challenging. Maximizing RevPAR entails getting a pricing software, inventory software, and hotel revenue management software that can predict market behavior accurately. That way, the hotel revenue management can know when to increase their prices and when to give discounts to customers.

RevPAR Guru offers the kind of technology necessary to survive and even thrive in the best or worst economic conditions. With its seamless integration of various features, it can accurately keep tract of hotel inventory and predict how much should be charged during particular seasons to boost hotel profitability.

Increasing Brand Loyalty through Your Online Presence

There is no doubt that the information age is upon us. Hotels that previously relied on their brand names and popularity are now finding themselves competing with previously unknown properties. This is because the web has made the world a smaller place and hotel revenue managers need to accept that fact. A lot of less-popular establishments are being discovered online because of their service, affordability, and even location. The only way to survive is to compete head-to-head not only with direct competitors but by making your hotel stand out amidst the internet clutter.

Today, the first generation (the brochure sites) and the second generation websites (online bookings, etc) have become outdated. The third generation websites, the latest in the field, is all about being interactive with the consumers. A lot of travel portals today let consumers post their positive or negative review about any particular institution they wish. Web 2.0, or even Web 3.0 as it is referred to today, not only gives consumers the benefit of convenience, it also gives them the benefit of choices.

Rather than seeing this as a threat though, smart hotel revenue managers see this change as an opportunity. After all, if they give the right information at the right time at the acceptable price range, more people will find their hotel online and make their internet hotel bookings. In this case, it is crucial to place all relevant data on the hotel’s website. Consumers will not make an extra effort to call your hotel and waste if competing establishments informs the web visitor about everything.

If the right process is done, the result is a significant increase in hotel sales. In addition, the property can achieve profit optimization through increasing RevPAR. In addition, after trying out the hotel’s services, the time comes for the guest to make a decision. Will he go back to the same hotel or not? If he answers yes, then you have gained another loyal customer.

U.S. And Europe-Based Hotels Took a Big Hit in RevPAR

With the latest industry data being analyzed, it was revealed that the hotel industry took a sharp decline in RevPAR last April 2009 according to the Smith Travel Research. Even as the financial markets stabilize and the overall economy gain momentum, the hospitality industry is taking its time to respond.

The data revealed that all four major regions including Europe, Asia Pacific, the Middle East, and the Americas suffered from double-digit decreases in all fronts. From their occupancy level to their revenue per share (RevPAR), everything was down compared to 2008.

These revelations are not surprising at all for an industry that’s reeling from the effects of the economic downturn. Almost every known strategy is being implemented to increase hotel sales and boost profitability even during the trouble times. Some hotels are resorting to price cuts while some are focusing more on their hotel revenue management endeavor. Whatever the case, it is clear that the path to recovery will not be easy given this data.

In the Americas, occupancy declined by 11.3%. It now stands at 56.5%. The bad news doesn’t stop there because the average daily rate also declined by 10 percent. Meanwhile, RevPAR which is an important indicator of a hotel’s financial health, dropped by 20 percent as well. Now, hotel revenue managers need to determine what they should do with this inventory. It is the only way to maximize hotel profits.

In London, the same grim situation is happening. RevPAR has dropped by 9.7% in the capital, London, while it declined by up to 14.6% in the nearly provinces. It is apparent that the city experienced a drop in occupancy rate and average room rate as well. But the situation is not as bad in the United Kingdom as it is in the United States at this point. Occupancy is still at 71.4%. It is only a question of whether this rate can be sustained or improved.

Revenue Management Takes Center Stage during Bad Times

It is said that a good brand will prosper in good times but it will be one of the first ones to struggle during adverse economic conditions. One of the reasons why include its price. Traditionally, price has always been pointed out as the culprit that determines whether a hotel will survive or not. However, during today’s times with the internet and globalization, this need not be accurate.

Particular attention should be given to online hotel distribution because it can lead to profit optimization and increase RevPAR. Using technology to make things happen will maximize current resources and competitive advantage even during the tough times. Though the sentiment today can be described as “declined”, “down”, or “depressed”, this doesn’t necessary imply that this spells the end of major hotel brands.

Take the example of the Asia Pacific region. Hotel transaction in the area was actually down in 2008 from its high in 2007. But this does not signal its doom though because on the fourth quarter of the same year, 2008, hotel sales actually grew marginally. Revenue management plays a significant role in this. In addition, certain hotels even take the weather into consideration.

For example, if stormy weather and dark clouds are predicted, hotel revenue managers know that customers are more likely than not, will stay indoors and search online for the best travel deals. These hoteliers also realize that once online hotel sales become the norm as customers become used to it, they will need to adapt. There is an advantage because shorter lead times will result from it.

It should also be noted that as lead times become shorter, previous historical data will no longer be relevant as it used to be. It will have limited value for the future so more extensive data gathering initiatives for yield optimization may be required.

RevPAR Guru Helps Hotels Increase Conversion Rate

From the United States to Asia, hotel occupancy, hotel rates, and RevPAR are at their all-time lows. It is said that desperate times calls for desperate strategies. However, while this saying may be true in certain instances, smart strategies are more important in tacking revenue problems in this case. Improving hotel revenue will take so much more than just crossing your fingers. It involves a comprehensive strategy that will enable the hotel, as a business organization, to move forward even during the bad times.

Some of the areas that hotel revenue managers need to focus on to improve RevPAR include:

System Automation

Majority of hotels have a complex system regarding pricing, inventory, and marketing. Manually doing all these tasks can be time-consuming and expensive especially if you add the amount of market research that hotels usually conduct. In addition, relying on humans is subject to errors so this can mean lost income for the hotel. Implementing a good system that can eliminate human error will help hotels achieve sustainable growth especially if they use a stable inventory and pricing software like RevPAR Guru.

Integrating Hotel Operations

As was mentioned earlier, hotels have a complex system wherein everything must work together to function cohesively. In theory, every area of hotel operation is “compatible” with each other. However, in the actual environment, multiple systems do not usually work cohesively with each other. In order to eliminate incompatibility problems and boost hotel sales, the revenue management team needs to look for a RMS system that has a stable platform and user-friendly interface. Software applications like RevPAR Guru will empower an organization to improve online rate distribution, reach pricing optimization, and boost profitability.

Increase in Conversion Rate

One of the major things that hotel revenue managers need to focus on is establishing an effective web presence on the internet. This does not mean merely creating a website and optimizing the pages to achieve rankings. It also means promoting the service to the right target market. Having a lot of traffic does not necessarily lead to high conversion.

Hotel RevPAR to Peak in 2013

The current economic crisis makes it difficult for hotel revenue managers to think beyond the current year or the next year. However, the Jones Lang LaSalle Hotels have released their forecast that the industry will turnabout completely in the next several years. As if that’s not enough, it is also projected that the revenue per available room or RevPAR will actually increase to its highest levels in 2013. It is estimated to reach as much as $68.28 which is even higher than the previous peak in 2007.

It is undeniable though that the market is about to get worse before it gets better. The same firm also expects RevPAR to regress by 12.1 percent because of the 5.1 percent decline in occupancy and 7.4 percent drop in daily rate. Everything is seen to bottom out by 2010. So it is a good indication that upward momentum is on its way.

As you can see though, growth will not be achieved overnight. In fact, it is expected there will only be a slight growth of 4.7 percent in 2011. Despite all this, it is undeniable that the gradual increase in hotel ADR and increase hotel occupancy will contribute to more hotel transaction and propel the RevPAR growth even further. If you are wondering about the accuracy of this forecast, then it is important to take note that these figures are the result of a comprehensive study of current economic indicators.

Some economic data that were used include gross metro product, gross domestic product, US retail sales, Standard & Poor’s 500 Index, and the customer price index among others. In the past, the indicators have shown dramatic correlation with hotel sales and profit optimization. By studying these statistics and coming up with a comprehensive strategies that will address present issues in the market, hotels will be able to boost profitability.

Another significant aspect that will contribute to the said growth is the fact that investment in new hotel structures is quite limited at this time. The supply pipeline is experiencing attrition because only a limited number of new rooms are not scheduled to be delivered with today’s economy. As a result, the supply does not grow at the rate it should even as the demand picks up as the economy recovers.

Maximizing Hotel Yield Management

Yield management, at its core, is based on the concept of supply and demand. This economic theory tries to maximize profit at times when demand is at its highest. In the hospitality industry, that means asking for the premium rate during the peak season and lowering the hotel rate during periods of lean season. It is important to take note that revenue management also depends on studying the number if inventory available in the market. When the supply is limited, prices will inevitably rise and when there is over-supply, prices will drop.

In most cases, clients with the least flexibility in location and date are those who are willing to shell out the highest amount. At the same time though, he would expect those in the hospitality business including the airline and his hotel to give him a level of flexibility in case he decides to change his current arrangement. On the other hand, clients that have a high level of flexibility will expect the lowest price possible. However, this client also recognizes that once he books, flexibility becomes limited.

In essence, hotel yield management operates in the industry in terms of these aspects:

• Inventory is relatively fixed
• Demand comes from, distinguished segments of the market
• “Perishable” inventory (ie. rooms that are unsold today cannot be sold tomorrow)
• The product is paid for before actual consumption
• Demand dramatically fluctuates depending on the season

In this case, yield can be described as the percentage which is the room revenue as a part of the total potential hotel sales revenue. The closer the figure becomes to 100, the higher the hotel yield is. It has been observed that an average hotel will typically achieve a 60 percent yield. A measurement on revenue management in an international scale enables hotel revenue managers know how their market is coping and what they can do to achieve profit optimization.

Comparing hotel RevPAR is highly important. This is because the figure is derived by dividing the total revenue by the total number of available inventory in varied price structure. Some hoteliers might be dismayed to find that the figure is lower compared to the traditional measurement of hotel occupancy and average rate. But doing this will help them discover the true reflection of the market.

Strategies that will Boost Hotel Sales during Tough Times

Anyone who has been reading this blog for some time has probably seen the importance of using the internet stressed many times over. This is because the power of the online marketplace in the travel industry is now undeniable. If in the past, travel agencies hold the power over the hospitality, it is no longer true now. For better or for worse, travelers are seeking the best deals from the internet. Smart hotel revenue managers need to utilize this tool to increase RevPAR and achieve profit optimization.

Using Third Party Websites

Third party websites have significant power in the travel industry. Even if these sites ask for a certain percentage in the profits, there are many instances when getting these services is a necessity. The hotel revenue management sometimes hesitates before using these services because of the high commissions. But this type of hesitation is a reflection of short-term strategizing.

In a lot of cases, the increased occupancy from online GDS systems could not have been generated using another technique. Unless the revenue managers can come up with ways to increase RevPAR any other way, it is a wise decision to use third party aggregator.

Complaints like this do not reflect the true essence of yield management. If travel portals are able to give you a base business, it becomes possible for you to increase hotel rates on the remaining inventory in order to improve overall RevPAR.

Generally, internet travel portals provide an international audience for your hotel. This is difficult to establish on your own. Since these sites are spending millions in advertisement alone, you can be sure that joining these sites would be an investment well worth it over the long term.

Give Travelers a Reason to Stay

With a few exceptions, hotels are rarely the end destination of travelers. They merely stay in the hotel because of its convenient location. If you want to increase hotel revenue, go back to the main target audience of your hotel. Evaluate the hotels competitive advantage and focus on it. For example, if you are near the city center, focus on location instead of trying to promote the spa inside the hotel.

Recognize that there are essential and non-essential reasons why clients choose your hotel. They will stay there for the location, for instance. But you can offer them the services of the spa once they know you exist.

Selling Hotel Rooms in a Sluggish Economy

In a sluggish market, using the core concepts of revenue management can definitely help hotels increase their occupancy rate and average room rate. Even during harsh economic conditions, it is possible for hotels to generate high demand with the right implementation of yield management. In addition, recognizing periods when the demand for hotel rooms significantly increases is critical. This enables hotel revenue managers to drive rates when they can and modify rates to charge customers lower during periods of low demand.

Although predicting these instances may be time-consuming, it can pay off big time. Hotels that practice effective revenue management can make the right decisions that provide the best value for the entire operations. The premise of any strategy is to have good data. However, collecting data is not guesswork. It requires diligent and thorough research about the market including the competition. Some of the techniques you can implement include:

Re-examine the Competition

Although some hoteliers might not realize it, competition actually becomes tougher during hard times. This is because even high-end hotels will try to get mid-range clients and vice-versa. Other hotels will try to capture additional market share that previously weren’t even theirs.

In a sluggish economy, knowing who your competition is is an absolute necessity. Take note that by competition, this does not necessarily mean the hotel down the corner; it can also mean other hotels in the city or even the travel packages available on the internet. But this can also mean a lot of opportunities if hoteliers know how to take advantage of the situation.

Strengthening Your Web Presence

As is oft repeated on this blog time and again, internet sales are absolutely crucial in today’s time. It is a fact that 70% of all travelers search the internet for travel deals and accommodations. Now, there is a question of whether they can locate your hotel or not. Improving web presence can increase hotel sales; in fact, you can even significantly increase occupancy and even room rate with this technique.

The internet can mean the difference between success and failure. This particular hotel distribution channel has come a long way from its beginnings. Some would even say that it revolutionized the industry because travelers no longer need to plan for months ahead, they can travel immediately within a few days of their arrangements.

Integrating Web 2.0 in Hospitality Revenue Management

Marketing and revenue management, at its core, have the same aim which is to improve profit and minimize expenses. Yet, the effectiveness and efficiency between the two systems can sometimes contradict each other. There is an undeniable tension because while both are aiming for increased hotel revenue, there is also the possibility that the brand integrity will be compromised. This is an issue that is sensitive for both parties.

Other issues that both marketing and hotel revenue management needs to deal with is the emergence of new technologies. With the internet becoming a significant player in the travel industry, it has now become more important to create a positive image online. This can be done through creating a website, forming partnerships, and most importantly making use of viral marketing.

New media capabilities, both informal and informal, can drive tons of traffic into a hotel’s website. Once the visitor goes into the site, there is a high chance that this will convert into sales especially if the hotel is in the location the traveler wants to go to. According to travel industry experts, the social media is the new television. Children, young adults, and even the older audience are familiar with the way the internet works. In fact, a significant portion of the population spends more time on the internet than watching television.

Now, the question that most hoteliers face is, how can they take advantage of viral marketing to boost profitability over the long term? The answer is both simple and complicated: building relationships with customers and prospects. This will enable the hotel to increase brand awareness through word of mouth.

It is true that paying for advertisements and other paid programs can still work. However, internet users have more choices than they do in television. They can’t be forced to think one way when there are so many choices available to them at the click of the mouse. What changes their mind and make them prefer one destination over the others are the opinions of their peers and the feedback they receive. If hotels are able to utilize viral marketing well, it will help them increase RevPAR and increase hotel sales overall.

RevPAR Helps With Yield Management

As an important contemporary management practice, yield management helps hotels maximize profits and minimize expenses. Essentially, it guides the hotel to sell hotel rooms to the right customer, at the right price, at the right time. Hotel management should not price hotel rooms at discounted rates if it can be sold at rack rates the next day. Likewise, it is important not to price rooms at peak-season rates during the lean times because it will remain empty otherwise.

RevPAR Guru enables hotel revenue managers to increase hotel sales by letting them know when to price higher or lower and when. This inventory software and hotel revenue management software is the perfect assistant when it comes to generating hotel sales. Developing new strategies that fit with the times is possible with this automated software solution. In order to appreciate how RevPAR Guru works though, it might be a good idea to go back to the core of revenue management.

The creators of this application understand that each individual hotel has its own needs. After all, it has its own historical data about their customer’s stay frequency, length of stay, group statistics, number of meeting, and corporate clients that pay either the rack rate or the discounted rate. By using these data coupled with market information, competitive analysis, and accurate forecast, the future need not be a foggy environment.

Future demand can be predicted accurately. The positive and negative demand can also be integrated into the business model to provide the most effective results possible. This model can be updated real time depending on the trends in the market. For example, if an unexpected local event is scheduled in the near future, hotels in the area can increase their rates to increase RevPAR and improve hotel revenue.

Being aware of these happenings in the travel industry, RevPAR Guru is created with a flexible module that enables hotel revenue managers to make changes when appropriate. This hotel management software can also deal with unexpected cancellation, early check-out, additional demand, no-shows, and a variety of other instances that are subject to human preference. As a result, hotels that use RevPAR Guru as their software can expect additional hotel sales and profit optimization.

How Yield Management Can Improve Hotel Revenue in 2009

Hotel yield management has always been an important concept for hotels especially because the demand for hotel inventory fluctuates according to the season. Through the years, hotels have been able to cope with the changing supply, demand, and profitability to be had from the market. But almost none of them have encountered the unique challenges present in 2009.

Many hotels are now fighting for their very survival. As the financial market sank in 2008, the reverberations of this trend are still being felt today. In this period of RevPAR stagnancy or decline, it is important for hotel revenue managers to look outside the box and create innovative solutions.

Creating a Revenue Management Strategy

It is important to go back to the essence of yield management. At its core, it means maximizing profits from a perishable source. So how is a hotel inventory perishable? Well, a year’s worth of inventory will lessens each day whether or not someone occupies it. Effective yield management helps create gains in revenue as against expenses.
Looking beyond the actual room rate to increase RevPAR into the value that the hotel can offer is a good yield management tactic. If the hotel revenue managers are attuned to the economy, they can cope with the situation better. This means they need to analyze market tendencies, research the hotel’s main market and submarkets, and track the performance of competing establishments.

Coming up with accurate figures will help hotels boost profitability especially during slow periods because it can potentially increase the hotel occupancy rate significantly. In addition, an effective revenue management strategy also necessitates the access to updated market area. For example, the vicinity of the airport, the number of surrounding offices, and the scenic location are all factors that might contribute to the increase or decrease of hotel sales.

Putting Yield Management to Work

The market is now wiser than ever before and this has affected how yield management is practiced in the hotel industry. In theory, these practices might be straightforward but in actuality, it requires you to be on top of your game.

If you previously offered hotel rate discounts for convention participants to lengthen the duration of their stay, hoteliers today need to know the tendencies of each segment in order to maximize it. Offering actual solutions instead of price cuts is the more effective way to increase RevPAR and ultimately hotel profits.

Market Demand: Should You Lower Hotel Rates?

Anyone involved in revenue management can reveal that the reveal that the hotel demand pattern nowadays is completely different than they were previously. Now, the question remains, will this trend continue or will it revert back to its previous pattern? This is a very important concern because it determines whether hotel revenue managers should “hang on” until the times get better or if they should think out-of-the-box and implement innovative measures that will ensure their survival in the future.

From all indications, the impact of business and leisure travel on hotel sales has been significant. Companies around the world are cost-cutting by reducing spending including corporate travel. Instead of cutting back on travel completely though, they are choosing shorter trips and less-expensive hotels. Meanwhile, leisure travelers have also changed their attitude. Many are opting for travel packages to save money. In addition, around 84 percent of all American travelers are trying to cut cost by staying fewer nights or taking more day trips.

It is apparent that the current trend has become the “new normal” today and in the future. This is because even if the economy picks up, old habits will be difficult to break. People who are used to spending less are most likely to set aside the same amount for their travels in the future. Also, as business and leisure travelers realize that there are a lot of deals (due to price cuts) out there, they will demand the same pricing level next time.

So is there a positive aspect in all this? Innovative hotel revenue managers will certainly answer yes. The current condition gives them a chance to increase RevPAR, improve electronic hotel sales, and boost profitability all at the same time. It is true that the knee-jerk reaction for most will be to lower hotel rates to maximize profits. Yet, the true essence of yield management doesn’t work that way.

Do not lower hotel rates too drastically. You may be thinking that “it is easy for you to say” but over the long-term, you will see that this is a good strategy in revenue management. The profitability of hotels lie on its perceived value compared to the competition. If your value proposition is low-rates, then you will not be able to increase hotel revenue as much as you can. Balancing hotel rate and its value is the task that good hoteliers should complete.

Revenue Management and the Internet

Within the hospitality industry, there is an ongoing revolution. Internet marketing and revenue management is increasingly overlapping. In fact, is now almost impossible to think about yield management without considering online hotel sales. For this reason, hotel revenue managers need to find how the two disciplines will evolve in the future in order to anticipate it.

In today’s challenging environment, travelers are becoming budget-conscious. One of the most popular mediums they look into is the internet. However, simply classifying the online marketplace as the “internet” is not sufficient. There are so many things that are involved in strategizing it. For example, some hotels focus too much resource on creating their website and home page. Meanwhile, others try to increase their web presence through SEO even as the content of their site suffers.

To find out the best strategy you can use for this hotel electronic sales channel, it is important to know your target market. If your target customers frequent one particular forum, for instance, then placing advertisement within that site might be a good idea. On the other hand, if they are more likely to type “Budget Hotels Florida” on the search engines, then optimizing your web pages using effective search engine optimization techniques is highly adviced.

Another strategy is to get into the Web 2.0 or even Web 3.0 phenomenon today. Social networking, social bookmarking, and other user-generated websites are popular among virtually all internet users. This is because they trust the opinions of their peers more than they do the brochure of the company. No matter what market you’re targeting, getting links and positive reviews from these websites will be very helpful.

And of course, there are the travel portals. Depending on the rate of the hotel, some properties shy away from these sites while some use it as an important medium to increase RevPAR and improve hotel sales. Some shy away because of the cut these travel portals get every time a guest books a room from the site. The commissions can sometimes be rather high. Sometimes, certain hotels can ill-afford to give it. If your main concern at this point is promotion and brand image though, this should be considered as an investment rather than a cost because of the potential it brings.

Going Back to the Basics of Revenue Management

Successful hoteliers know that focusing on hotel revenue management is the key to success. It is the single most important factor that contributes to bottom-line profits. In most cases, yield management concentrates on deriving the most value from rooms but it can be applied in other areas of the hotel as well. Hotels are a business and therefore, it is critical to boost profits and increase hotel revenue.
There are several core ideas that should be recognized in revenue management. Among these are:

• Replacing cost-based pricing with a competitive-based pricing
• Selling to niche markets rather than mass markets
• Saving the product (in this case inventory) for the most valuable clients
• Focusing on price rather than cost
• Decision-making is based on facts rather than guesswork
• Exploiting opportunities in the product’s value cycle (peak season vs. lean season)
• Evaluation revenue opportunities on a consistent basis

Though revenue management traces its roots back to hotels, it is actually applicable in many types of businesses. For example, airlines are now using this type of strategy in order to maximize their revenue. Previously, they didn’t until they became deregulated. Aside from those in the travel industry, the concepts of revenue management can also be used in other industries.

For example, service businesses like food or salons can give discounts during weak points of the week in order to attract customers. If a particular market wants to avoid the Saturday crowd in a salon, they will be encouraged to go during the day the discount is offered to benefit. They don’t need to deal with a long waiting list and they get a discount to boot.

While this may be an effective strategy, it is not always advised to provide cuts on prices though. Going back to hotel, the industry is probably the first to implement revenue management. Thus, it sets a precedent that other industries can follow.

Wise hotel revenue managers know that it is not always essential to focus on price. Combining perceived value with a positive real to the stay in the hotel is the key to increase RevPAR, increase sales, and improve profitability. For any other industry that is struggling with their yield management, the example of successful hotels may be the one that should be followed.

Boost Profitability By Competing

Over the years, people hoteliers have come up with many different versions of revenue management. Whether it is referred to as yield management or any other term, it is undeniable that it can mean different things to different people. No matter what it’s called though, everyone agrees that it can work wonders if it is implemented property.

At its core, hotel revenue management can be described as the process of managing the business flow of the property. This “flow” should be tailor-fit to the individual needs of the hotel, its goals, and its target market. The primary goal should be to take advantage of occupancy demand whenever it’s available.

Certain hotels may leave profit optimization to the local management while some dedicate an entire team for this endeavor. The choice of who is put in charge with this important responsibility will have a significant impact on the hotel’s bottom line. There are several critical elements of revenue management. Right now, we will focus on knowing your competition.

Importance of Knowing Your Competition

Revenue management is both an art and a science. Gut feel alone isn’t enough to make it work. Serious work needs to be invested on it. Aside from knowing your internal cost, it is also crucial to find out the situation in the competitive business environment.

There is a popular saying “stay close to your friends, but even closer to your enemies”. Though you shouldn’t think of your competition as the enemy, the same concept holds true. Hotel revenue managers need to know the ins and outs of their own hotel. But they also need to find out what makes their competition stand out in order to boost hotel revenue.

Look into industry sources and compare your hotel to others in terms of hotel average rate, occupancy rate, and RevPAR. Doing this will determine how you can position the property you’re managing in the marketplace.

Right now, many hotels particularly independent properties are still placing themselves in a box. They don’t look further than their immediate surroundings. Well, this is one of the biggest mistakes they can make. After all, it is difficult to set competitive rates that will increase RevPAR and improve yield management if you don’t know what others are offering.

Hidden Ways to Increase Hotel Revenue

The goal of every hotel revenue manager is to optimize sales from every channel including the central reservations office. A lot of hoteliers make the mistake of overlooking this area. Depending on your target market, the total contribution from the central reservation system can be anywhere from 10 percent to over 35 percent. It is important to give every hotel sales channel the best tool for conversion.

Increasingly, hotels are concentrating their efforts on increasing hotel online sales. There is nothing wrong about that especially since online bookings have been experiencing significant growth year in and year out. But this development doesn’t mean that other sources should be overlooked. On the contrary, it is possible to achieve profit optimization in both.

In addition, the two hotel distribution channels can actually complement each other. Today’s savvy deal-seeker is checking both mediums. For example, they try to look for the best rates online before calling the reservations system so they can be sure that they are given the bets rate possible. Realizing the interconnectivity of hotel electronic sales and offline sales can prove to be beneficial for property managers especially in today’s economic crisis.

Below are some tips that can help you increase hotel profit:

Use Alluring Descriptions – first of all, it is important to go beyond the standard feature of the hotel and highlight the things that make your property stand out. Also use words that entice rather than simply inform. Most clients will respond to visually descriptive language that paint pictures on their minds. In many cases, they will book their reservation even if the rate is priced higher than the competitor when the picture is already painted on their minds.

Update Property Information – keeping the information updated on both the hotel’s website and the central reservation every six months is critical. All data that is no longer relevant should be eliminated. Otherwise, guests might expect certain features that are not available anymore or miss out on new developments about the property.

Make Sure All Key Attractions are referenced – probably one of the primary reasons why people stay at hotels is its location. If you are located near business parks, entertainment centers, or even a popular business complex, be sure to include it in marketing. Also, major events including festivals, air shows, and sporting events among others might interest the guest.

By following the tips outlined above, your hotel will hopefully enjoy increased RevPAR. This is especially possible if it uses RevPAR Guru as a tool for profit optimization.

Automated Revenue Management Will Improve Efficiency

When organic hotel sales start to go down, hotel revenue management takes on a new level of importance. This is because it becomes critical for hotels to go after the remaining market. The marketing department will also experience the same problems and opportunities. To reduce redundancies, the two can be meshed together.

Avoiding Redundancies

Implementing technologies such as the RevPAR Guru can help boost efficiency greatly. This solution can provide automated forecasting not only for North American properties but for properties anywhere in the world. A significant number of man-hours can be saved. And the best part is, the result of the system will increase RevPAR and manifest itself to profit optimization.

More than using technology though, there should also be cooperation between the hotels sales & marketing department and revenue management. By working together, hotel managers can identify areas for promotions and what the optimal hotel rate should be.

In the previous articles, we have discussed the tension between the two groups. For example, the misconception of hotel managers that sales are only interested in profits. This type of thinking should be eliminated for any type of effective cooperation to take place.

RevPAR Guru as a Tool

Before RevPAR Guru has been introduced, hotel revenue managers simply used Excel to calculate the appropriate rate. This is time-consuming and typically inaccurate. But there is no need to say with this old style. By using algorithm processes to process data, the software is able to project how much the hotel can expect from its transient sales.

However, thinking that any software application can replace the touch of an employee is quite misguided. It should be seen as a tool rather than the ultimate solution. For example, it is not a substitute for hotel revenue managers. Some tasks that are related to hotel management are things that only a human being with actual experience and rational thinking can solve.

With this in mind, it is even more important to respect the capabilities of hotel revenue managers. It is true that technology today is incredibly advanced. Booking software, inventory software, and revenue management software are impressive. Without a human to feed and interpret data though, software applications can do just the opposite of what they were designed to do.

Boosting Electronic Hotel Sales with Social Media

With the number of user-generated content websites and social media sites today, making sales is all about interaction. These interactions need to go beyond the one-on-one interactions that characterized the hotel’s strategy in the past. Now, it is all about networked relationships that connect different people to events, places, and other people. How can this be done? Well, in most instances, the best medium for this type of interaction is the internet.

Aside from the fact that internet users and travelers booking travel over the internet has been steadily increasing, technological innovations also made it possible for properties to boost hotel sales through interactive hotel electronic sales channels. With the effective utilization of social media, hotels can increase RevPAR and achieve profit optimization.

It is important for hotel revenue managers to realize the potential of investing in technologies that will enable them to build relationship with consumers online through conversations, customer service, and honest reviews. Hotels should focus on websites where their target consumers spend significant number of hours. Social media and user-generated content can provide free marketing, connection, and commerce to the hospitality industry and ultimately increase hotel sales.

But before you engage in such endeavor, it is also important to note that leveraging on this trend relies on consumer reach and brand awareness through effective placement in social networking sites. There are some tips that will help you in this.

Identify the Most Appropriate Social Media Sites – there are numerous Web 2.0 websites over the internet. It can get expensive and confusing if you try to use every single one of them. The key is to concentrate your efforts only on the most appropriate sites to increase hotel sales and boost revenue.

Interact with the Target Market – interaction can be tricky. For example, if you decide to open a MySpace or Facebook account, it is essential for your market to be added as your “friends”. Meanwhile, blog sites can likewise be effective but it takes time and consistency to gain the loyalty of your readers.

Provide Packages that Offer Value – after you gain the trust of your target customers, the next step is to offer hotel packages or special discounts with the goal of increasing hotel revenue while strengthening customer relationship. By interacting directly with the target customer, it becomes possible to offer to best rates because it cuts the middleman, such as travel portals, out of the picture.

The Rate Game: How Should You Set Room Rates?

There are many misconceptions about what hotel rates should be. It is true that rates fluctuate up and down depending on specific market conditions. But the questions that most hotel revenue managers need to face is, how high or how low should they go to achieve profit optimization. Some yield management strategist still holds to the belief that they can keep their rates consistent with previous years. Meanwhile, some are adapting a more aggressive hotel pricing strategy in order to keep up with the challenges today.

Trying to maintain the same rate because the “product is worth it” simply does not make sense during today’s economic downturn because hotels risk losing their remaining market share. Don’t make the mistake of maintaining this mindset even if all evidence points to the contrary. Remember that a product, hotel inventory or otherwise, is only worth what consumers are willing to pay for it. If very few people are willing to pay, yield indices, RevPAR, and market share all become out of balance.

Meanwhile, it also isn’t a good idea to go as low as possible. Slashing rates below profitable levels may acquire market share but at the expense of increasing hotel profits. Both RevPAR and other yield indices suffer in this instance as well. So what is the solution? Effective hotel revenue management. With good yield management strategy, hotels can increase RevPAR without losing market share or profits.

Stop Tinkering with the Published Rate Structure

It is highly likely that you’ve experienced a drastic decline in revenue. Business and leisure travelers are cutting back and it is tempting to decrease your rates to go after a larger share of the market. But your “value rate” such as group rates, LNR, etc should be able to compensate for the rack segments.

Aggressively Seek Out Groups

Bid on one-time groups, tours, and large groups to increase your occupancy. Some steps you can take include looking back at files and prospects you previously rejected because the proposed rate was too low for you. Then watch out for tour buses and company vehicles in your company’s parking lot. Check your competitor’s rate and try to meet it.

Before you utilize this strategy though, it is essential for you to know just how low you can go. It is never good to be in the position of having to call back during the negotiation process. Act on the opportunity while it is available.

Implementing New Hotel Revenue Management Metrics

It has never been more imperative for hotel revenue management and hotel sales activities to set objective metrics that accurately measures effectiveness. Until the economic crisis, many hotel staff including those from the sales department and revenue management has been contented to go with the flow. It is important right now to let these individuals know that their strategies or skill set is no longer sufficient in this economy. Rather than firing those with inadequate skills, it might be a better idea to give them the opportunity to improve.

Right now, the benchmarking standards implemented by hotels can be described as arbitrary at best. Only a few hotel revenue managers seem to set metrics that measure the success of their strategies. But in today’s challenging environment, the importance of effective revenue management is at its highest. There are some steps you can take to develop these metrics and boost hotel sales. Below is an outline of what you can implement:

• Creating a Personal Sales Strategy – determine how many prospects you have, the alternatives, and the type of market you can attract. After you find out these things, it is essential to identity how you will find these prospects and what marketing activity they will most likely respond to.

• Prioritize and Organize – while organizing is important, it may not be as critical as prioritizing the right things. Learn to discipline yourself. Actually, no one cares if your desk is cluttered. But they will care of the hotel is not producing the kind of revenue it should. At the start of the day, know which tasks should be prioritized and what the hotel can do for them. This will enable you to increase hotel sales.

• Set Metrics – it is impossible to manage what you can’t measure. The concept behind this is simple; you can improve if you don’t have a solid measurement for success. The metrics can be as simple as setting how much online hotel sales you want to generate each month. Other metrics can include determining the productivity of each employee involved in sales.

The importance of setting metrics is undeniable. It sets acceptable standards that everyone in the sales and revenue management team should accomplish. In addition, it will enable quality output to be produced consistently. Hotel revenue managers who implemented effective metrics for their yield management strategy are deriving the benefits of this initiative. It will help hotels succeed even during the bad times.

Online Hotel Sales Revenue Management

It is no secret that hotels are now deriving a significant part of their revenue from internet sales, either it is from electronic distribution channels (GDS), franchise websites, or even the hotel’s own home page. For this reason, many hoteliers are concentrating their efforts online. Right now, many have already re-allocated their resources from traditional channels to internet marketing and promotions with the objective of manipulating their internet presence to increase hotel sales.

Hotel revenue managers are certainly correct in this initiative. After all, the internet presents a lot of growth opportunities for hotels that are struggling in today’s tough times. In addition, they can expect their yield management to be improved and increase hotel sales.

Frustrated hoteliers should remember the saying that if you “keep on doing what you have always done, you will continue to get what you have always gotten.” In the business environment today, this means diminishing hotel revenue unless they do something about it. The internet should be utilized as an effective tool to drive hotel sales. Before embarking on this initiative though, hoteliers must realize that it is important to include the sales department because the this revenue management strategy will ensure that the product positioning will be uniform across all hotel distribution channels.

The three main stages that hotels can take include:

• Target Market Positioning – this strategy mainly involves locating new markets when the existing customers are generating less revenue. Hoteliers make the decision to concentrate on markets that used to be ignored. The new market can be composed of affinity groups or even the government.

• Market Penetration Strategy – as its name implies, this means deciding on which method will penetrate the market best. In this stage, it is critical to know the “depth” of the market to ascertain its potential and boost profitability.

• Initial Approach – this third approach entails actually approaching the market. There are two ways to conduct this: traditional and cyber. Obviously, the approach implemented in the two channels should be different. For example, in the internet, the first contact may come from travel portals or third parties while in traditional marketing; it might come from travel agencies.

The three stages outlined above is only a brief overview of what hotel revenue managers and their sales department can do to reach new markets on the internet. However, while the online marketplace presents vast opportunities, it is also quite important for hotels to keep their current clients and maintain the level of relationships they always had.

Focusing on Increasing Hotel Sales

Sales forecast is not something that most hotel revenue managers want to focus on. But this is an essential element to consider because it will affect the company’s strategy, hotel rate positioning, and pricing strategies among others. Every start of the year, most people look back at what happened the previous year. And for the new strategy to be successful, it is critical to know what worked and what didn’t in the previous years and how these can be improved upon in the next year. In addition, hotel revenue managers should not only lay out the forecast and stick to it stubbornly. It is sometimes wise to consider the current market condition to change the hotel rate strategy appropriately.

After this step, the next one is implementation. This is where more problems start to occur. Many hotel revenue managers say that they have a problem about “time management”. They take unnecessary calls that could have been left to the secretary to answer. They welcome interruptions from different people within the hotel. And they spend too much time in redesigning work flow and other systems. While this initiative may be necessary, it is the task of the hotelier to know which area should be prioritized.

In truth, most revenue managers don’t have an issue with time management; they have sufficient organizational skills to manage their time effectively. Their main concern should be their lack of focus. Focus is different from management. It is not about organization but about prioritization. The organization with streamlined operations may not experience profit optimization if it is targeting the wrong market. In the same way, managers who put their time and effort into unproductive undertaking will yield no tangible results.

Fortunately, there are things that can help hoteliers and staff keep their focus on the right things. Among the steps they can take include:

Analyzing Daily Activity – writing down the activity of the day and then analyzing it will determine how productive the hotel revenue manager is. This will help them identify which tasks needs to be eliminated and which should be placed at the top of the list.

Prioritized Identified Areas – once the critical aspects of operations have been identified, the next step is to know which proposals, contracts, or any other tasks should be done for the day.

Reduce Interruptions – one of the things that make a person less productive is distractions. By eliminating interruptions and other unnecessary tasks, the main priority can be finished during the day or during the specified timeframe.

Integrating Revenue Drivers to Optimize Hotel Sales

Summer is usually the peak season for most hotels. But due to the economic climate today, hotel revenue managers are definitely expecting that hotel sales will not be as great as before. However, the fact remains that this is the most important time to maximize hotel profits. If this isn’t achieved during this season, hotels will have a difficult time meeting their sales target for the year. To achieve this, it is important to implement good revenue management.

Currently, customers are wiser than they used to be. They know how to look at the elements of their accommodation including location, hotel choice, facilities, and brand. It is important to get into the customer’s mind in order to provide the best service to them. Take note that revenue management can mean different things to different managers.

Basically though, the main aim of hotel revenue management is to increase RevPAR. Most have a pretty clear idea of how an increase in RevPAR can be achieved. However, based on data and consultations, many hotel revenue managers seem to lack coordination with their revenue drivers. These drivers include central reservation, hotel electronic distribution channels, sales department, and online sales. Overall, it provides the revenue for the entire organization.

One of the main concerns that a lot of hotel revenue managers expressed in many consultations is that they are unaware of the rate changes in their own hotels, specifically those that are posted in electronic distribution channels. Sometimes, it becomes too high that attendees from certain meetings have to book elsewhere instead of going for the group block. At other times, the rate posted is lower compared to what the hotels negotiated with third parties.

To avoid these problems, it is important to collaborate within all levels of the distribution channels and at all levels of the organization. This process will ensure continuity. Below are some tips that will help you do just that:

Product Positioning – it mainly involves the rate that will be charged for group bookings, competitive set, and reservations among others. It will need to be adjusted so monitoring the franchise yield management software is critical.

Look over Contracts – all existing and forecasted contracts should be analyzed. Everything from volume contracts with wholesalers, group contracts, and other obligations should be based on the rate structure. This should be determined by both the sales and revenue management department.

Online Presence – right now, many are finding their hotels through the search engines and hotel electronic sales channels. For a hotel property to increase hotel sales, they should look into these channels seriously.

Pre-Marketing Plan in Revenue Management Strategy

In any business undertaking, the marketing plan is seen as a crucial tool to success. But what many fail to consider is that revenue management should be an integral part of the marketing strategy and should be considered distinct from the marketing budget. Many hoteliers seem to think that the budget and the revenue management are one and the same thing. Even those who have a better understanding of it believe that the marketing budget and the revenue management strategy are interrelated and needs to be placed on the same page.

If there’s one thing you should know right now, it is the fact that this belief isn’t accurate. The hotel revenue management system needs to incorporate different revenue sources including the hotel web site, the electronic distribution channel, and the hotel GDS. In addition, it requires the involvement of all profit departments of the hotel such as the sales department. It is a revolving process that requires adjustment according to specific market conditions. This is very much unlike the budget wherein everything is set in stone.

A good hotel revenue management strategy requires profit optimization and tactics that will boost hotel sales. It should encompass everything from the cost of commissions to optimizing revenue. This means manipulating GDS, using electronic distribution channels, and allocating proper resources. Its development should enable sales to determine the inventory available in a given period and at what rate these rooms should be rented out. So how, exactly should this process work?

The Four Step Process

• Gather the Info – the process starts off by seeking relevant information that will provide an accurate forecast. The report logs from the previous years should be sorted out. In addition, a situational analysis should be completed to identity possible opportunities and challenges for the year ahead.
• Analyze Revenue Information – all revenue drivers should be looked into. Through this, those with the most potential will be identified. Currently, it is a well-known fact that a significant part of the hotel sales will come from the internet.
• Facilitation – everyone involved in increasing the hotel’s revenue should come together. This “meeting of the mind” will enable the best possible strategy to be identified.
• Revenue management strategy – after compromise, the situational analysis, and everything else, the revenue strategy should be created. The main aim is to increase RevPAR by utilizing an ideal mix of revenue, rate, and software solutions.

After the strategy has been created, it is important for the “facilitation” group to periodically meet in order to discuss the strategy. Reviewing it and basing it on reality is the key to successful hotel revenue management implementation.

People Behind the Revenue Management System

An effective hotel revenue management system is the key driver behind the hospitality industry’s ability to survive the economic crisis, retain and attract customers, and increase RevPAR. And the importance of revenue management has never been more important than now. Since the market is expected to decline overall, the average RevPAR and other hotel metrics will expectedly experience a downtrend as well. With a good system in place though, a hotel revenue manager can look past this into the real potential of his hotel.

Getting a deeper understanding of the hotel clients is crucial in this stage. For example, in a normal urban/suburban transient property for corporate executives, price sensitivity is lower because they are not the ones paying the bill. Even if the corporation is managing the cost of travel, the reality is that travelers will still prefer prime locations, complete facilities, and other amenities.

Another factor that should be considered is the bookings from hotel electronic sources. Because of the popularity of the internet, electronic hotel sales have been steadily increasing for the past decade. Hotel sales channels such as e-commerce, franchise web sites, and GDS systems should be looked into carefully. Usually, the hotel sales derived from these mediums come from leisure travelers who are looking for good deals.

It is important to measure the potential of each contract. This will enable both the hotel revenue manager as well as the sales staff determine how the business can be aligned in relation to their client profiles. But more than that, all the people involved in the hotel revenue management strategy should really believe that it is effective in order to execute it property and boost profitability.

If the people who are behind the yield management strategy and hotel software don’t believe in its capability, it will reflect on their performance. Remember that no matter how sophisticated inventory software, yield management software, or hotel software is; ultimately it is still people who use these tools. Unless it is utilized to increase RevPAR and increase hotel profitability, it will just be another tool that can be effective or ineffective in the decision-making process.

Improve Hotel Revenue Management During the Tough Times

There is a saying that a “rising tide floats all boats”. In the hospitality industry, it just means that when the market is doing well, there is a good chance that your hotel will do good as well. The problem starts when the market is doing badly. As all hotel revenue managers probably already know, today’s situation is unique than ever before. Travelling has become a popular activity until the recent economic crisis. And the result is that there are so many rooms and inventory from various hotel establishments. Some have no choice but to drastically lower their prices just to generate hotel sales.

If you have previously already discovering that going with the tide is not something you want for your hotel, then good for you. Your hotel revenue management system can probably withstand different conditions in the market. However, if you’ve been left behind because you have become too comfortable in the few years past, then all is not lost. You can still increase hotel sales and boost profitability by looking over these targeted areas:

• Hotel Rate Positioning – first and foremost, decide on the hotel rate structure. It is important to look at your market position as well as your competitive set. Where are you located and when is your peak season? Knowing who your clients are and what they can afford is critical in determining the hotel rate positioning.

• Revenue Management System – if you don’t have a hotel revenue management strategy in place already, it is critical to design one. Whether you are running a chain of inns or a 900-room resort, having a good system in place ensures that you generate the best hotel room rates based on facts. The revenue management system should encompass the booking software, inventory software, and historical data for more accurate results.

• Property Management Software – every hotel has certain reports and data that are used for management. The hotel revenue manager probably knows all about this and decides on the yield management strategy of the properly. However, the hotel staff should also know the system well. After they know the basic, additional training should be given to maximize the potential of the property management software.

There are other aspects that should be looked into in order to come up with the best overall strategy for the hotel. While looking through this endeavor, checking how the hotel is performing when it comes to hotel online sales is also important because majority of sales is expected to come from the internet for most hotels.

Is There a Disconnect Between Hotel Revenue Management and Sales Strategy?

Many would think that revenue management and sales strategies automatically complement each other. After all, these two are deeply interrelated to one another. However, this perception is idealistic at best because in reality the sales department and the hotel revenue management are usually at odds with each other. When this happens, frustration occurs and this can hinder the thought process that makes good decisions possible. It is a good thing that majority of hotel revenue managers are willing to compromise to bridge the gap.

In many cases, it has been observed that the frustrations of hotel revenue managers arise from the fact that the sales department wants to provide “sale” prices at inappropriate times because they want their bonus incentive when they reach their quota. This is against the revenue manager’s job of ensuring the profit is optimized at all times for the overall well-being of the hotel. While this perception may be true in some cases, it is important to look past this bias and look deeper into specific problems. Among those that can be identified include:

Inappropriate Discounting – using the discounting strategy to cope with low market demand is an almost automatic reaction for sales people. It has been the standard operating procedure (SOP) ever since the demand drastically decreased because of the deep recession. And when you couple this with travelers who have reduced their budget, sales people scramble to give the lowest rate possible. It is important to analyze the market first before giving drastic discounts. Effective yield management should be prioritized in this case.

Revenues from Different Profit Centers – the sales department is more likely than not to be familiar with the customer behavior. They can actually help the hotel revenue managers in this case by helping develop the hotel rate strategy for specific times of the week and the month. The highest demand from corporate travelers tends to occur during midweek while weekends are preferred by vacationers.

Building Client Relationships – this is a common cause of tension between sales and revenue managers. Though revenue managers know the value of building and maintaining relationships, it may not be their first priority in all cases. Meanwhile, sales people usually strive to accommodate all client requests at the expense of the hotel’s profitability. This needs to be ironed out for maximize hotel sales.

Using Hotel Revenue Management Software to Increase RevPAR

A Cornell University Study, published in the Analysis if Revenue Management Vol. 5, No. 6, in the April of 2005, revealed that hotels that price above their competitors have the most aggressive hotel revenue managers. They are the best when it comes to increasing RevPAR, improving yield management, and boosting profitability. Many hotels want to raise their room rates in order to increase RevPAR but this strategy may not always work. Its success depends on brand image, amount of available facilities, location, demand, the number of competition, and general economic condition.

It should be noted though that the most successful hotels when it comes to revenue per available room implements hotel revenue management strategies. However, it you should note that the requirements of revenue management systems for individual hotels are different. For example, the needs of a 50-room boutique establishment are far different form a 600-room chain hotel. Before buying inventory software, booking software, or a yield management software, establishing the exact requirements of the hotel in terms of RMS systems and functionality is important.

If you’re anticipating the implementation or the upgrade of a system, evaluating the potential return of investment of the revenue management systems including their sustainability needs to be done. Below are some guidelines that will help you find the best hotel revenue management software:

Departmental Needs – each department has its own requirement when it comes to documentations needs, report, and other data gathering and retrieval technique for effective decision making. Hotel revenue managers need to know the minimum and the optimal requirement of each department.

Existing Hotel Revenue Management System – if you already have a revenue management system in place, consider if it would be more cost effective to replace it or to add certain functionalities. In addition, be sure to find out what the exact requirements are. The last thing you want is to have the same problems in the new system.

Hotel Channel Management – most hotel applications have this feature. Finding the right one is only a matter of how complex your business structure and the promotional mix. A system that allows you to evaluate the different revenue streams is a particularly effective one.

Customer Behavior Analysis – a good revenue management system should be able to forecast customer behavior based on historical data and customer information. The information helps the hotel revenue managers make better decisions based on actual data, not on guess work.

Price Integrity for Hotel Revenue Management

Hotel revenue managers have started to understand that consumers are now more informed than ever. Right now, most travelers know about hotel rate parity, rate of day fluctuation, and the availability of rate types. As a result, they achieve more buying power. Property owners are left in the position of increasing their competitiveness using new technologies in order to boost hotel sales. It is important to find out what the real cost of using hotel distributions are including the returns each channel provides to profit optimization.

Given the importance of minimizing costs and the need to improve the yield of each channel, hotel revenue managers should encourage consumers to book using the most affordable and profitable channel possible. But there is a danger to this in rate parity. Remember that the hotel rate parity must not be overlooked so various levels of value in booking is a good option.

Many hoteliers have a lot of things to consider. Revenue management also involves analyzing the consumer’s acceptance of price strategy modifications. Some markets are more sensitive than others. In addition, the overall economic condition also contributes to price sensitivity. Hotel revenue management consultants also say that knowing about the current political and competitive environment is crucial because different consumer segments will react differently. Historical data, primary research, and the existing level of hotel sales all point to the price sensitivity of the consumer.

Price Integrity – Increasing Hotel Sales

No one in the hospitality industry can deny that price is a critical weapon. Outside the hotel industry, the same concept holds true. Price can make or break you. The consumers will only pay premium rates for something they perceive as having premium value. To encourage these types of sales, it is important to create confidence in the brand, hotel services, and overall impression.

In many instances, adaptive pricing strategies need to be implemented. When hotels want to increase occupancy, aggressive pricing can be used. Discount pricing is particularly notable during off-peak periods to boost profitability. There should also be packages that will appeal to various segments of the market. Certain segments need specific services while some need only basic accommodation.
All these factors need to be considered in hotel revenue management. But it is always important to keep in mind that offering the same packages at different rate is never a good idea. It will confuse the consumers and will make them feel cheated if they paid more.

Simple Ways to Increase Hotel Internet Sales Part 2

If you want to increase your hotel’s internet sales, it is important to allocate a significant amount of resources into internet marketing as well. Right now, it is believed that all major hotel brands are already generating more than 40 percent of their bookings through their hotel internet channels. By 2010, it is projected that 45 percent of bookings will be completed using internet booking software. Before you invest a significant amount of money in your online endeavors though, it is critical to know which areas and channels you need to focus on:

Paid Search Campaigns

Investing in search engine optimization (SEO) may be a good idea, but it takes time before results start to trickle in. An alternative to this is the pay per click campaign. Popular programs include Google AdWords and Yahoo Search Marketing. This program is worth considering for the hotel industry because it significantly improves web visibility. PPC is a particularly beneficial program while you’re waiting for your site to increase in ranking.

After your hotel website builds a good reputation, you can gradually stop this campaign. Some people use this as a replacement. However, it is never a good idea to use this over the long-term because of the extensive investment involved in order to sustain it. In addition, searchers are more inclined to trust search engine results instead of paid results. This will translate to better hotel revenue management on your bottom line.

Packages and Promotions

Just because you’re marketing your services online doesn’t mean you need to give up on offline marketing strategies altogether. Find out what packages click with your target audience and include it in your online service offerings. If people are booking your hotel because of its good location, free breakfast, corporate amenities, and scenic views, be sure to mention it on different hotel distribution channels including the internet.

User Generated Content

Some of the most successful websites today rely on users to generate its content. For example, video sharing sites, P2P, Wikipedia, and even YouTube depends on thousands of users to create and patronize its services. The same concept holds true in the hospitality industry. For example, social media sites can be very helpful in boosting hotel profitability. This is because people generally trust the opinions of others within their network; when their friends give reviews, they listen. In addition, travel-centric media sites that offer reviews are used by countless people when making purchase decisions.

Simple Ways to Increase Hotel Internet Sales Part 1

A decade ago, hotel revenue managers would never have thought that the internet will become the most important hotel distribution channel worldwide. In 2008, 37 to 38 percent of all hotel bookings are believed to have come from the internet. Aside from this, at least another third of hotel sales are influenced by online mediums although the actual reservation is done offline. For example, bookings done through walk-ins, call centers, and travel agencies are influenced, by a large part, by what people see and read online. It is not surprising then that certain hotels were able to cope with the tough times and even increase their hotel internet sales despite the tough times.

Creating and Updating Hotel Websites

Hotel internet marketing revolves around the main hotel website. It should be the first thing that a hotel revenue manager focuses on. In many cases, it is either the first contact or the last contact a company makes with the customer. It is important that the hotel’s website be a top priority especially since the market for hotel online sales is huge. The main objective would be to create an appealing overall image of the amenities.

A lot of hoteliers make the mistake of becoming contented with the same website they had five years ago. Time has changed drastically since then. Now, it is essential to have striking graphic design, internet hotel reservation software, real time information on prices, and booking software among others. If promoted properly, this can be a significant amount of business to the establishment.

Search Engine Optimization

Every person who has tried their hand in online promotions knows the importance of search engines. Majority of web traffic will come from search engines because this is the first tool people look into when trying to find information, product, or services on the internet. By SEO, it doesn’t mean that using popular key phrases on the content is enough.

Instead, a full-fledged campaign that involves link building, search engine submissions, and content optimization should be used. This is the best way to increase internet sales for your hotel. If you decide to hire a SEO specialist or an agency for this campaign, make sure you get those who have actual experience and knowledge about hotel revenue management.

The problem with most SEO companies in the market is that they have the tendency to focus merely on increasing traffic with no regards to its relevancy to the hotel. The result is low conversion rate and a lot of wasted money. Looking for someone with hotel industry knowledge is important.

Measuring Weekly Hotel Performance

It is no secret that the hospitality industry has been struggling in different fronts ever since the global economic crisis occurred. To get an accurate overview of the condition in the United States today, performance measurements for the week March 15-21 has been conducted. Metrics per month and per quarter are very helpful in determining financial performance, but this weekly year-on-year comparison provides a better overview of the real effects of the tough times.

Using this measurement, all three key measurements declined according to the STR. The occupancy rate fell by 4.7 percent, average daily rate declined 8.0 percent, and revenue per available room dropped to 12.3 percent this week. The average daily rate is now pegged at US$99092 while RevPAR is at $US58.45. If this is not alarming already, all major cities except for Washington DC showed declining performance during this timeframe.

Washington, DC was the only market that increased on its key performance measurements. However, even that increase is on the low side of the scale. Occupancy was 69 percent which is 1.7 percent. Meanwhile ADR was pegged at US$152.91 which is up 0.9 percent. And the RevPAR of the city increased to US$105.46 which is up 2.6 percent from last year.

Seeing that the United States is a very diverse market, its remaining top 25 cities showed mixed rates. For example, St. Louis, Illinois showed an increase in occupancy while Houston, Texas declined by 1.3 percent. One notable decrease is that from New York, New York. It dropped 25.5 percent in its ADR which is the largest in the research. The city also posted the largest RevPAR decrease because it dropped 36.6 percent to only US$151.05.

Given these severe setbacks in the hospitality industry, hotel revenue managers might wonder, is there still hope in increasing hotel sales in the next few months? The truth is, the condition today is one of the worst in history. In fact, economic performance has not been this bad since the Great Depression.

Yet, it is important to realize that the conditions from the previous eras are far different from the conditions today. Now, it is possible to use inventory software, hotel revenue management software, and internet marketing to reach a larger audience: a worldwide audience. With this fact in mind, the answer is yes. It is possible to increase RevPAR and boost hotel sales even during difficult economic times.

Increase Hotel Sales by Using RevPAR Guru

Despite the amount of sophisticated technology available today, a lot of hotels are still suffering from manual processing, and poor information flow. They fail to get updated and real-time information about guest, inventory levels, and industry data. This leads to reduced revenue and has a severe impact on hotel profitability. In today’s economic condition when the industry is struggling just to break-even, it is critical to utilize all available tools to improve RevPAR and boost hotel sales.

Among some of the most common mistake that a hotel revenue managers can make include focusing too much on administrative processes instead of sales, unreliable information flow among hotel distribution channels, lack of leads about sales statistics, redundant systems and infrastructure, and inflexible systems that cannot support new hotel rate strategies and new technologies.

Requirements of Hotel Revenue Management Software

• User-friendly interface
• Real time inventory information
• Modular structure
• Integrated technology elements including channel management, revenue management, account management, business management, and contact management
• Solid technology platform
• Data accuracy

These elements are very useful in when it comes to hotel management. It helps streamline processes, improve efficiency, and most importantly, increase hotel revenue.

RevPAR Guru: Solving your Problems in Real Time

With all these challenges, it is a good thing that a software application such as the RevPAR Guru exists to help hoteliers. It is a revenue management software, hotel booking software, and hotel management systems software combined into one. It is quick and easy to implement. With the right utilization, it can show a significant improvement on hotel sales.

It is critical to choose an application that has been specifically designed for hotel revenue management. There are many software solutions available but only a few of them can actually meet the unique needs of a hospitality business. It is true that certain technologies can be “modified” to adapt to the hotel’s requirements. However, it is very expensive and in some cases, it is not flexible enough to meet ongoing improvements. The RevPAR Guru is different because it understands all the challenges of the business. All functions are designed to deliver effective yield management and profit optimization.

It is not surprising that a lot of hotel revenue managers are turning to RevPAR Guru to help them cope with the changing times. The software application is very useful in both good economic conditions and bad.

Increase RevPAR by Improving Performance

Revenue per available room (RevPAR) is an undeniably an important factor in increasing hotel sales and boosting profitability overall. However, in some cases, it is also critical to look at other factors that might affect performance. Decisions surrounding the hotel size, long-term strategy, and service orientation all play a role in the hotel’s profitability. Take note that aside from RevPAR, another metric of the hotel’s financial health s performance. When times are lean, hotel revenue managers need to improve operational processes in order to enhance hotel profitability.

On the other hand, performance is also essential during the good times. It can be used as a tool for profit optimization. Effective hotel rate distribution, rate strategies, and the use of forecasting and inventory software are all helpful in ensuring the best results possible. Sometimes, certain hotel chains even take over their competitors in order to experience economies of scale through productivity gains.
There is no doubt that once hotel revenue managers understand how important productivity, RevPAR will increase. These two elements complement, rather than contradict, each other. But many make the mistake of concentrating on one but not the other. The balance between occupancy rate and hotel room rate can be categorized as RevPAR, it basically shows the income of the hotel. Meanwhile, performance and efficiency has more to do with controlling costs.

Hotels are generally labor-intensive but it does not necessarily mean that hotel revenue managers should allow the property to lose money just to keep up the current level of service. Improving efficiency may be a challenge but it is definitely possible to achieve. Today’s hoteliers find today’s condition particularly difficult though because there are too many rooms that are left unoccupied while fixed labor costs still remain.

Fortunately, there are tools like RevPAR Guru. This software application provides real time information about historical data, occupancy levels, and available amount of rooms. Good decisions can be made in real time. Prices can be adjusted according to actual demand and supply while unnecessary costs are eliminated through the use of this accurate forecasting software. It is not surprising that a lot of hoteliers are looking into this software for a solution. In tough economic times, there is no room for error. Basing your decisions on facts, and not guesswork, is your best bet in surviving the current downturn in the hotel industry.

Hotel Industry Performance In Europe

Most hotel revenue managers are probably tired of hearing about the economic crisis, its negative effects on the economy, and the falling occupancy. But for many, this is just the tip of the iceberg as people cut back on travel. One of the worst affected markets was the United States but its effects have spread throughout the world most notably Europe and Asia. Two cities in Europe show how grim the picture is for the hotel industry.

Vienna’s Hotel Rate Distribution and Sales

The hospitality industry in this city saw their profit decline by almost two-thirds per available room. This has significantly reduced their RevPAR. Other cities that took the brunt include Prague and Amsterdam. Prague saw its profit decline by half while Amsterdam declined by 45.2 percent. The single city that did not experience double-digit reduction was Hamburg.

The situation is particularly concerning in Vienna. Its labor costs now take up to 55.5 percent of its revenue. This incredibly high cost of labor is making it harder for the market to recover. Although the payroll expense traditionally has been high during the first part of the year when hotel sales are at its lowest, having the labor costs comprise of more than half the total revenue is not normal.

How London and Paris is Coping

Both London and Paris experienced almost the same level of decline in terms of occupancy rate. The occupancy rate in London is down to 70 percent while the figure is 69.3 in Paris. In terms of hotel profitability, the figure fell by 21.5 percent in London and 20.6 percent in Paris, France. These developments have forced London hotels to implement new hotel rate strategies. Most hotels have already provided discount for travelers.

Average room rate have now dropped by 8.4 percent in the city while Paris did not cut their rates that drastically. In their quest to improve hotel sales, hotel revenue managers are pulling all the stops. Discounts, customer service, expanded hotel distribution channels, and online presence are all utilized to boosts hotel profitability. Time will tell whether these initiatives are actually effective for the entire hospitality industry. Consumers need to build more confidence on the economy before they spend at the same levels they once did.

Increase Hotel Revenue Even During Tough Times

One of the biggest questions in the minds of hoteliers around the world is can consumers afford to take a vacation? Or rather, can they afford it? In the second part of the 20th century, vacationing seemed close to being human right. Everyone takes a vacation at one point or another during the year. And because of global competition and the internet, it has become very affordable as well. However, with the economic crunch being felt by both the corporate travelers and the individual consumer, hotel revenue managers are realizing that this “human right” is not necessarily concrete. They need to look for ways to increase RevPAR and boost profitability.

According to Norbert Walter, the Chief Economist of Deutsche Bank Research, the market will get worse before it gets better. Several economists share the same view. At the same time, there are also others who believe that the economy will recover by 2010. Only time will tell which prediction is true. But what is undeniable right now is that hotel sales are down and a lot of companies in the hospitality industry are cutting rates in order to cope.

Although the oil prices have fallen, the stable costs of transportation are not enough to get people back to traveling. The world is experiencing its deepest recession since the war, according to Dr. Walter. Because of this, it is critical for hotel revenue managers to be cautious about the next year. He said that “We have been trying a lot of different therapies to get us out of the crisis”. Yet, none of this provides an assurance for the future. The picture is far from being out of control though, because as of now, the government is doing what it can to help all industries.

Correctly interpreting the result of economic contraction, the chief economist focused on its effect on tourism. The crisis has undeniably dampened the outlook for hotel sales. In particular, the middle and upper segments took worst hit. As a result, it is predicted that the luxury enjoyed in the past will be difficult to regain. Despite all these setbacks though, traveling isn’t dead. It is important to realize that it is among every man’s dream to travel, explore new sights, and discover new sights. This will not change and the hotel industry will certainly gain momentum once the economy improves.

Profit Optimization by Boosting Hotel Selling Strategies

Throughout the years, five types of selling in the hospitality industry have emerged. This can be referred to as the 5C’s of the hotel industry. Most of the time, the changes were created as a reaction to the changing market and technological advancement. As the market is shifting, it is undeniable that some hotels were left behind while some embraced the changes. Taking a look at the past will let a hotel revenue manager know how to cope with the challenges of today’s economic condition.

It is a fact that each circumstance is unique from each other. Yet, from each generation, there are fundamental lessons that can be learned and implemented to boosts profitability and optimize yield management. Below are the most notable areas of hotel marketing and promotion that you can look into:

Cronyism – when sales methods were not yet sophisticated, the hotel sales personnel were personalized. Good service, while being provided, offers little or no differentiation. In addition, the rooms being offered are also mostly the same. In order to improve RevPAR, it is important to establish relationship and establish the right hotel rate.

Commodity Selling – the next method was commodity selling. This was usually seen during the 50’s and 60’s when hotels competed on price. Similar to the first problem, there was little differentiation among hotels. As a result, competition became mostly based on hotel rate distribution and prices.

Content Selling – it started on the 60’s and was popular until the 80’s. This type of selling involved the first efforts of the hotel industry to differentiate themselves from one another. Hotel marketers with the help of advertising created brand awareness about their product offerings. And this helped boost hotel sales and improve profitability.

Consultative Selling – hotel revenue managers then realized that while content selling may be better than its predecessors, it still does not completely provide for the needs of the consumers. This is because the hotel may be providing certain benefits the guests don’t want and missing opportunities for improvement. Consultative selling plugs this loophole because it aims to understand the deeper needs of the consumers.

Collaboration – this is the best approach to selling hotel room inventory so far. Its mentality approaches selling as a partnership between the hotel and the consumer. This results to better yield management, profit optimization, and satisfaction on the part of the hotel revenue manager and on the part of the hotel guests.