We invited Hazel to offer her personal advice regarding everything revenue management, online distribution and marketing. Hazel is a wealth of knowledge who was only to happy to share her expertise with anyone seeking help in this very important area of running an accommodation business.
Read and watch on for some invaluable advice!
WHY IS REVENUE MANAGEMENT IMPORTANT FOR ACCOMMODATION PROVIDERS?
Revenue Management is regarded as a valued discipline within the travel space due to its high impact benefit to the business on delivering profit. It’s been said a lot before but this line has always stuck with me – it’s about serving the customer the right room, at the right price, at the right time, in the right place (i.e. channel)!
There’s a fine balance from a pricing point of view where you might go too far and lose the booking because the customer thought you were overpriced, compared to when you’re priced too low, as the customer would have paid a higher price and so money was left on the table.
WHAT ARE SOME COMMON MISTAKES YOU SEE WITH ACCOMMODATION OWNERS AND THEIR REVENUE MANAGEMENT?
I think common mistakes tend to be when properties think they have implemented dynamic pricing but really they have just updated more seasonal rates or weekend/weekday rates and it doesn’t actually relate to supply and demand. Another common mistake I see is when properties only alter pricing when their competitors do, making it a very reactionary role and relying on another provider knowing what they are doing.
Revenue management isn’t just about pricing, it’s about all of the components that come together to formulate a business strategy, which makes it a very exciting topic and challenging one at times.
WHY DO YOU SUSPECT SOME OPERATORS SHY AWAY FROM DYNAMIC PRICING?
I suspect there may be a perception that revenue management is only applicable to the bigger properties or that it doesn’t apply to them because all other providers operate with seasonal rates in their market. Revenue management practices can actually be applied to something as small as a 2-room property as well as other areas of the business such as meeting room space and leisure facilities.
Another factor could be a concern for the time required to manage dynamic pricing, which is a totally valid concern since there is much consideration of what needs to formulate a dynamic pricing strategy and this is ongoing and changing constantly.
I think it can also be a bit intimidating as there is a lot of jargon used and perhaps that might be a barrier for some people. Ultimately it is about implementing the best pricing strategy that’s good for the business and good for the customer.
WHAT ARE YOUR TOP TIPS FOR ANYONE NEW TO THE INDUSTRY WITH NO EXPERIENCE IN REVENUE MANAGEMENT?
Ok, so I have a few…. 😊
- Understand your strengths and weakness as a business by conducting a SWOT analysis – what are your unique selling features and how can you tell this story to the customer?
- Understand your current business mix – set up market segmentation which could be as simple as corporate versus leisure business.
- Review your channel mix and set up meetings with the relevant OTAs (online travel agents) and other distribution partners to learn what the opportunities are. If you are operating with a large corporate base of clients this may well involve needing to be connected to the GDS (global distribution systems) through a distribution partner. It will also depend upon whether you are working with TMC’s (travel management companies). You may also be working with wholesale or inbound operators. Having a good understanding on how all of your channels operate and where and how your rates are being distributed and the cost of working with these channels are fundamental to understanding how best to manage your property from a revenue management perspective.
- Understand and know your competition – how does their product compare, what are their main selling features and how are you different?
- Gather market intelligence through local associations or by subscribing to STR to understand how well you are performing against your competition for benchmarking purposes. Any revenue management strategies you then employ can be easily measured.
- Start reporting at a basic level on key daily rate information such as occupancy, ADR (average daily rate) and RevPar (revenue per available room).
- Set up a way to keep informed on city wide events and conferences (if relevant) so you can ensure you maximise rates at peak periods.
- Set up a pick-up report so you can start to forecast supply and demand and then be able to implement the correct pricing strategy.
- Ensure you have systems in place that will assist you with being able to implement revenue management such as a PMS, channel manager, direct booking engine and responsive website.
- Upskill by reading and attending free online forums and sessions.
- Depending upon the property size, consider employing an expert in this field or contracting with an outside agency for assistance. It’s an ever-changing topic that needs constant work and attention for the business to gain the most.
And putting on my marketing hat which ties in nicely with revenue (and always overlap), here are a few top tips;
- Make the most of the free online tools to help with visibility of your business, i.e. your Google listing and TripAdvisor’s listing.
- Ensure that great imagery is at the top of your list and is updated regularly on all channels.
- Only have a website and booking engine that is responsive so it is viewable on any device and ensure you have full access to the content management system to regularly update it. It also needs to be friendly to the search engines for organic traffic (this is its own massive topic!).
- Choose a booking engine that is easy for the customer to complete a reservation on to increase conversions.
- Ensure you have detailed content on your own website about what is important to people such as the location and how to get there, facilities such as car parking, restaurants etc… and key events in the area.
- Know what your customers are saying about your property and engage where you can with them online and offline. Take all feedback on board and work on improvements to help build a positive guest experience. Guest reviews have a big impact on bookings and conversions.
- Consider engaging on appropriate social media platforms with your guests if you have the time and expertise to resource this properly. A note here that for visibility on these platforms a small budget will be required.
- Having clean and complete guest profiles in your PMS enables you to help deliver a great experience while at the property. You may also like to consider engaging with your guests pre and post stay by email and to encourage repeat visits (ensuring an appropriate platform is used for emails to meet legislative requirements).
Hazel Rigler has established a strong career within the Hotel industry, specifically in the complex field of Marketing, Sales and e-Commerce. She has been employed for the past ten years at the Wellington based Head Office for Grand Chancellor Hotels, Australia and New Zealand; a role which she has brought a wealth of international experience and expertise to from her management positions in Dublin and London. Her drive and tenacity has seen her go above and beyond for the company, and her ability to keep the Group ahead of change secured her status as a finalist in the prestigious New Zealand Hotel Industry Awards in 2018.
As Director of Marketing & e-Commerce, Hazel drives the relationships between the Directors of Sales & Marketing, Revenue Managers and Human Resource Managers across the ten Hotels, whilst also working closely with the General Managers at each property. She has investment in a diverse range of Hotel systems and processes, from e-Commerce (website, e-marketing, search engine marketing), data integration, revenue, sales, loyalty and brand management. Hazel ensures each area of Marketing & e-Commerce is integrated into the overall Group strategy, and carefully manages the supplier relationships, always negotiating the best possible outcome for the company. The fast-paced nature of the online world, hotel distribution and marketing landscape also results in the need for careful change management. Hazel is an expert at communicating changes and disruptions with the senior teams, providing a careful balance between energetic enthusiasm and diplomatic discussion.