Strategic revenue management and technology quickly leads hotels to make decisions that bring in higher revenue and profits – and translate into cash flow that impresses any hotel owner.
Since every hotel requires substantial financial investment, you can be certain your owner cares significantly about seeing the value of their asset increase.
NB: This is a viewpoint by Blake Madril, a revenue technology strategist at.
And since impressing your owner remains high on your revenue management priority list, there are some things you should avoid saying to keep them from feeling less than impressed.
Below are five things you never want to tell your hotel owner:
“Our hotel doesn’t need automation”
Your hotel has been using the same manual revenue practices for years, so how could you possibly benefit from automation? Many hotels experience immediate improvements in average daily rate (ADR), occupancy and shoulder night increases once they implement an automated revenue management system.
In fact, one of the top benefits of automated technology is that it frees up time previously spent on manual activities to allow you to prioritize and focus on revenue strategy.
Plus, it does more than just improve revenue performance; it also improves the organization’s overall revenue management culture to mutually focus all departments on achieving profitable hotel goals.
“I just have a feeling about this Saturday night”
Increases in revenue performance always catch the eye of an owner, but relying heavily on gut feelings and risks can quickly turn your revenue results into a bad roll of the dice. Rather than discussing what you think might happen based on what happened before, focus on what the best possible outcome could be.
Use your advanced analytics to detect demand patterns not readily detectible to the human eye. These could include distinctive patterns in length of stay, days to arrival, seasonality, cancellations, and more.
Assessing your hotel demand from an analytical viewpoint gives you the ability to discuss and improve revenue performance based on valuable insights – not on a gut feeling.
“Yeah, but our occupancy index was high…”
Owners expect more than just high occupancy and “heads in beds”. The hotel’s ADR and RevPAR are good financial indicators of hotel health, and hotel operators are paying more attention to gross operating profit per available room (GOPPAR) and total revenue per occupied room (TrevPOR).
For improvements in GOPPAR and TrevPOR, the ideal guests need to be attracted at the ideal price. Hotels can be tempted to sell out their rooms to lower-rated business, but they end up losing out on higher-rated business that would have stayed more nights and made them more money.
Understanding how your public rates affect all related business (including linked and derived business) and establishing the ideal pricing balance will drive optimal bottom line performance for your hotel.
“We can’t sell out without walking guests”
Most front desk staff will tell you they dread walking guests, and rightfully so, which is why hotels often go to great lengths to avoid overbooking. It’s not enough to book a reservation for every room a hotel has to sell, and not overbooking results in missed occupancy at your highest ADR and revenue opportunities.
When overbooking by room type is done strategically through analytics, you can understand the wash and cancellation patterns of market segments, and plan ahead to overbook with exceptional results.
These same analytics can also be used to establish an optimal upgrade strategy – helping you determine when to offer premium upgrades over complimentary, or when to deploy greater length of stay controls to your higher demand room types.
“I only focus on transient revenue”
Group, meetings and events revenue can contribute 40-60% of a hotel’s total revenue, which makes managing group business a critical component of revenue management success.
However, disrupting your normal guest booking patterns by accepting less profitable group business that displaces higher valued transient business can be a costly mistake. This is something every revenue manager should being paying attention to. Your advanced analytical technology can help you assess displaced inventory and group profitability so you can confidently accept the pieces of business that drive optimal revenue increases for your hotel in the long run.
By avoiding these five stumbling blocks, and by using strategic revenue management practices and insightful analytics, you can confidently increase your hotel’s revenue performance and value – and exceed your owner’s expectations.
At least until they set even higher ones.
NB: This is a viewpoint by Blake Madril, a revenue technology strategist at. It appears here as part of Tnooz’s sponsored content initiative.
NB2: Image by