5 years ago

The new reality in hotel revenue management – a check-list for 2013

A new year and many changes are on the horizon that are impacting heavily your hotel’s pricing and distribution strategy.

Indeed, it looks like 2013 will be quite an interesting year from a revenue management perspective.

So here our hotel revenue management tips for the remainder of the year (and beyond):

Google Hotel Finder

This will probably become one of the most talked about topics this year. But how does this impact a revenue manager? Well, simplly it is yet another distribution channel that needs to be monitored.

Google is aggressively rolling out this new price search engine and giving it dominant exposure in SERPs (search engines result pages). So we can expect quite a few consumers to shift in this direction for their hotel searches.

As a first step, make sure your property is listed. This can be achieved by registering your hotel in Google Local Pages. Make sure your content is well updated with the correct descriptions and fresh images.

Unfortunately independent hotels cannot yet integrate with the Google API for Hotel Price Ads, which means that you will have to push your representation company (CRS/GDS) to do so.

Otherwise there will only be online travel agencies listed in Google Hotel Finder, which of course would have a negative impact on your direct sales.

Metasearch price manipulation

OTAs are aggressively fighting for growth and market share and will do almost anything to get a sale. Most disturbing that we have seen is some sites reducing the taxes and fees to be cheaper to be listed on top on price comparison websites.

You also have to be careful your package and FIT (free indepedent travel) rates are not published online and are listed with only a small mark-up on websites such as Trivago, HotelsCombined, Kayak or Google Hotel Finder.

All of this completely undermines your pricing strategy and could end up hurting direct sales significantly.

Mobile pricing strategies

We have noticed OTAs requesting special rates for mobile devices, including tablets. Strangely enough hotels seem to be willing to dilute their prices on tablets vs their position on desktops/laptops.

Be careful you are not simply undermining your own rate strategy.

Brand protection

Are you protecting your hotel name/brand from advertising hijacking? OTAs and other travel websites bid on search engines on your hotel name and divert people looking for your hotel to their intermediary website.

This will cost you commission on what should be a direct transaction.

Reputation is everything

In the era of online reviews and consumer feedback it is crucial for a revenue manager to have a good reputation and review score.

It directly impacts your ability to drive ADR (average daily rate). Set up a combined task force together with the operations team to improve the service level of the hotel, and tackle concerns or suggestions raised by guests.

Assist in making your hotel outshine the competition!

But it is not just about service. You need to get reviews, so don’t forget to ask guests to write something about their stay on your hotel’s TripAdvisor or Google+ profile. It will help you move up in the ranks.

Diversify distribution

Don’t put all your eggs in one basket, and make sure you are diversifying your distribution. Create a balance between the different OTAs and segments to avoid depending on one or two large OTAs for the majority of your revenue.

Explore new channels to expand your reach. Don’t look only at OTA that sell BAR (best available rate), but also explore promotional campaigns to promote packages.

Find channels that can help you spread out your business.

Grow direct sales

You need to help your marketing team to secure a relevant budget to grow direct sales. Make sure your website is well optimized and conversions high.

Work together with them to improve your look to book ratio. And don’t forget mobile is growing rapidly and you need to be ready to sell on tablet and smart phone devices.

What other marketing tools or initiatives are included in your digital marketing strategy? SEO, SEM, PPC, email marketing, display advertising, mobile marketing, local search linking, social media, retargeting, remarketing, video, reputation management and blogs.

As a revenue manager you need to assist to make sure they have what they need for an all round strategy and have the pricing, distribution and digital marketing strategies seamlessly connect with each other to ensure growth and reduce dependence from third party distributors.

Call center sales

How is your reservations team performing? The reservations office is a crucially important point of sales for a hotel, and we have to make sure it generates a good revenue stream.

Performance has to be measured with KPI and ongoing training programs are needed to keep conversion levels up.

It is often a neglected department, regarded as merely operational, but it is where everything comes together and the money is made in the end. Make sure it is well managed.


Get your CRS or PMS to connect directly to distributors or channel manager with a two-way interface. It will reduce errors in rate uploading and data entry of reservations.

Just make sure you don’t simply connect your full inventory without safety triggers. Otherwise a distributor could potentially sell your entire hotel at the same rate.

You would certainly have left money on the table if you come back after the weekend and a high demand event day went from 20% to 100% occupancy, without any yielding.

Keep planning ahead

This is not new for 2013 of course, but as we are starting a new year it is a chance to get longer term planning established correctly.

Make sure you build a demand calendar for a 12 to 13-month rolling period, and continue do so each month. Add events and market trends to next year’s calendar develop your strategy and load your rates right away.

Don’t procrastinate and leave it for later. You will forget many important details which are now still fresh in your memory.

We encourage revenue managers to step up to the plate in 2013 and get involved in their business beyond analysis of pick-up trends and subsequently adjusting rates.

They need to develop a more holistic understanding of the hotel(s) they manage and see how they can contribute to generate more demand, improve conversion, and control cost.

The job of a revenue manager is to make more money, you will need to go beyond your traditional role to help your hotel outperform the market.

NB: More hotel management tips.

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Patrick Landman

About the Writer :: Patrick Landman

Patrick Landman is a contributor to tnooz and founder and CEO of Xotels. This hotel management group assists independent hotels with revenue management, online marketing and internet distribution strategies.

They offer outsourcing services, coaching, consulting and training. In his blog, Patrick challenges hoteliers to think out of the box and not to accept the established order.

Through a passionate drive for growth and improvement he brings creative tips, ideas and best practices to the table that can help hotels drive up their bottom line.

In previous roles he has helped to develop businesses like RateTiger and Hotels.com into industry leaders. 



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