# Revenue Management Service

We can provide the full scope of revenue management services to your hotel
  • What tools do you currently have available within your property for revenue management?
  • What is the quality of the information these tools produce?
  • What actions are taken with the information from the sources available?
Benefit: ensure that any current investment made in revenue management tools is properly utilized.
Report for the room sales, revenue, average room rate production from;
  • Market Segmentations,
  • Channels & Sources
  • Distribution
  • Guest Geographical
  • Social Media
For Food & Beverage Outlets we can make the following reports,
  • Revenue per outlet
  • Revenue per shift
  • Revenue per team member
  • Tracking top selling items
  • Cost effectiveness of promotions
For Spa’s and Wellness Centers we can make the following monthly reports,
  • Revenue
  • Revenue per treatment
  • Revenue per therapist
  • Revenue per time of day
  • Cost effectiveness of promotions
Plus, comparison to previous years, analysis and recommendation. (subject to availability and quality of the information)
Benefits
  • provide clear, systematic reports that show developments in the different room revenue producing areas of the hotel.
  • Ensure your staff responsible for revenue production are producing revenue and not spending their time making reports.
Monthly report that shows the productivity of each of the sales resources (managers, executives, directors).
  • Sales calls performed per day / week
  • Results from Sales Calls
  • Revenue derived from sales calls
  • Time per company / agent vs revenue produced
Plus, comparison to previous years, analysis and recommendation. (subject to availability of the information from previous years)
Benefits:
  • Provide a clear report showing the return on investment (ROI) from each sales resource.
  • Provide a means of ensuring the right focus is given to the top producing companies / agents
  • Ensure your staff responsible for revenue production are producing revenue and not spending their time making reports.
Monthly report for next 12 months with the daily suggested optimum pricing levels for each room type on website and OTA’s. The suggested rates consider the hotels value index and the competitors pricing strategies.
Ensure correct prices, rates, rate codes and room types across the hotels OTA’s.
Work with the OTA’s on improving the ranking, assist in solving rate parity issues.
Monthly report showing the specific selection criteria compared to your property. We identify the major selection criteria for each segment, and evaluate your strengths and weaknesses compared to your competitors for each of these points. Some examples of selection criteria are:
  • By service scale / quality
  • By geographical location and accessibility
  • By event organizing capacity
  • By total number of rooms to welcome large groups
  • By leisure facilities (swimming pool, spa, gym, etc.)
Daily check on Tripadvisor and other online review portals. Verifying information with the hotel operational teams, advising actions to remedy issues and responding appropriately to all reviews.
Benefit:
  • Showing the guests looking to make a reservation, that any issues raised are dealt with in a timely and effective manner. Thus giving them the reassurance that they will be in good hands when they make a reservations.
  • Ensuring there is a constant guest experience focused improvement management in place assisted by an experienced operational staff to suggest remedies to the local hotel team.

Revenue Management is the technique of looking at all sources of revenue and optimizing them to strike a balance between risk and profit.

It is both an art and a science as it is very unlikely that any 2 properties will have the same driver components. I.e.

  • be the same in terms of size, room types, room sizes, facilities
  • have the same location
  • have the same customer base
  • offer the same guest experience pre-, on site and post stay
  • have the same management and staff interaction with the guests
  • have the same loyalty programs.

The science looks at the data analytic part and includes:

  • Historical hotel occupancy, hotel room rate,
  • Historical specific room type occupancy, specific room type rates
  • Pick up trends for the whole hotel and the specific room types
  • Dividing the market up into market segments with similarities then tracking booking patterns with average length of stay, lead times, likely hood of cancellations and lead time for them, .
  • Changes regarding booking patterns per market segment around specific events (weekends, holidays, events (eg annual city-wide conventions, festivals, annual marathon, F1 races)
  • Extra revenue sales per market segment and geographical origin (meeting rooms, spa, restaurants)
  • Breakfast sales per market segment (and geographical guest origin) for room only sales

The art part looks at other aspects that an algorithm cannot take into account that will (possibly) impact the demand for the property and how to make changes to the rate, availability, sales conditions or other methods to influence occupancy to counteract or use these to the properties advantage.

  • Local disasters (sinking of the Phoenix with 44 Chinese visitors killed in Thailand, volcano in Bali),
  • Currency exchange issues eg. a significant drop in the value of currency from major producing customer bases (eg. Euro, Dollar, Rubel have all dropped significantly in relation to SE Asian currencies over the years)
  • Local politics (eg expected political instability can lead to visitors postponing trips or going to another nearby country)
  • Global / regional economic growth
  • Non-annual events (MICE event, one of festival)
  • Expected road works near or around the hotel impacting the guest experience

The good revenue manager understands that you cannot just rely on the science of the algorithms but needs to add in the art to be truly effective.

Yield Management is the method developed to look at the profitability of all revenue streams.

Where revenue management looks at the revenue optimization, yield management looks at the costs associated with the booking channels, market segments to find the combination of market segments, booking channels that lead to the best profit and profitability for the properties.

The way to do this is to first look at the fixed costs of selling your hotel room. This includes;

  • Average time taken by housekeepers to clean a stay over and departing room
  • Cost of daily cleaning (amenities and linen replenishment)
  • Average electricity cost per room (type) sold (best if this can be tracked specifically to market segments / geographical origin of customers) per night
  • Average water costs (per room type) per night
  • Average capture rates for breakfast per market segment for rooms sold inclusive of breakfast.

After that it is necessary to look at specific costs associated with specific market segments.

E.g. Travel Agency Sales

  • Sales Manager Salaries and Benefits
  • Sales Manager incentive programs
  • Client familiarization trips
  • Trade shows, road shows and fairs
  • Brochure costs
  • Travel costs
  • Marketing production costs

With this understanding the profitability per market segment can be understood. It could well show that some guests booking at low hotel room rates, are such good users of the spa and restaurants that their net profitability is higher than that of guests paying the highest room rates.

The science part of Revenue Management focuses on data analysis to maximize and optimize the profits of a hospitality company. Revenue Management can be implemented in an existing company that needs revenue and process improvements. The same exists for a newly built business as the basis for future success.

Revenue Management is thus a data and art driven process that identifies the distribution needs of a hotel. Through the close study of the internal and external environments, SkyPoint can develop internal processes to maximize the company’s overall revenue.

The detailed study of guest behavioral patterns of already acquired guests enables us to develop trends that identify the exact needs of the already captured market and identifies what the hotel needs to do to maximize guest assessments and in turn maximize profits. Tracking guest behavior patterns also helps identify where future business can be found.

Once all processes are identified and followed, every sales and marketing campaign becomes more concrete, because it focuses on the exact needs of the business, meaning that every investment in sales and marketing will deliver better results and higher profits.

Big data lays the foundation for the success of all sales and marketing activities and can help develop an effective marketing plan that maximizes all investments and, as a result of the data collection, lay the foundation for the success of all future campaigns. Streamlining marketing activities will result in a more target driven focus that delivers better financial results.

The primary aim of hotel Revenue Management is selling the right product to the right guest at the right time for the right price.