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.”

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.”

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.

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.

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.

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.

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.

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.

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.

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.