Revenue Managers to ‘adapt and Adopt’ in 2018

Charlestowne Hotels, a management company, works with 43 properties—both boutique and franchised brands—across 13 states.

“When entering a new year, we are always looking for two major types of demand generators. The first is repeat events in markets, which include items like marathons, festivals, school calendars (college graduations, parents weekend, alumni weekends) and sporting events. The other type of demand generators we are looking for are one-time events. This last year was a great example of that with the eclipse … we had a few markets fall within the path of totality, and as an once-in-a-lifetime events that fell on a weekday, it presented an incredible revenue opportunity for these hotels.

“The revenue management behind these generators is rather detailed and stressful, and to take full advantage of the opportunity you need to be well out-in-front of this … identify these events as early as possible. Staying in contact with local governing bodies, chambers, visitors bureaus, etc. will usually allow you to get this communication prior to public knowledge. Once we’ve established the events happening, we then use our own data, any competitive market data and sometimes data from other markets that have hosted the same or similar events to set pricing restrictions… (for) longer events … make setting length-of-stay restrictions and pricing interesting. The final factors considered are cancellation and deposit policies. With these events often booked in larger booking windows, and many guests holding rooms before actually having tickets, or committing to a trip, properties need to consider whether to put stricter policies in place to protect revenue over these days.”

Twenty Four Seven Hotels manages brands like Marriott International, Hyatt Hotels Corporation and Hilton, across California, Arizona, Nevada and Idaho.

“One key date to consider every year will be where the Easter holiday falls on the calendar. This year Easter will be on 1 April. This date typically creates a condensed holiday break with more public schools going on recess during the same period. This should allow revenue managers the opportunity to account for a more compact timeframe of demand in leisure travel on spring break and as a result, less of a decline on corporate pace throughout the month. Revenue managers can maximize opportunities and get ahead of calendar shifts and holiday trends by reviewing these dates well before the booking window arrives and understanding how the elements of demand will differ during these periods. … Our revenue-management team is already taking the time to identify these calendar shifts now and adjust sell strategies for the entire year 2018. By adjusting the sell strategies outside of the booking window, we will be able to truly understand the adverse effect on market demand these calendar shifts can create.”

Chesapeake Hospitality focuses on full-service hotel management with properties under Marriott, InterContinental Hotels Group, Hilton and several independents in the U.S.

“We have been budgeting and forecasting by segment, day by day, for years. Our granular process allows for day/demand/event shift analysis from year to year as our system remembers all prior and one-time impacts. Due to the rationality of our portfolio, the strength and severity of the northern (United States) winter patterns are a key driver for us, as well as fluctuations in Latin American tour and travel demand. In order to compensate for fluctuations and capture opportunity, we monitor three business bands at all time—a tier above our determined peer set, our peer set and a tier below. This banded analysis can help identity opportunities as each individual market assimilates to changes in demand, supply, etc.”

RLH Corporation is a franchise-focused company with properties in most states, as well as Canada, South Korea and India.

“We fully expect to see cancellation trends continue to increase into 2018 due to market price transparency coupled with more and more competitors that are willing to chase demand by lowering rates. This means understanding wash trends by segments, channel and day of week in order to compensate earlier in the booking window. A simple philosophy suggests that a price that isn’t selling is the wrong price—taking full advantage of the full booking window has never been more important than now.”

Shaner Hotels develops, owns and operates globally with brands like Choice Hotels, Hilton, IHG, Marriott and several independents.

“In all (of) our markets, we are watching the increased impact of international travel. We recognize projections for travel from the BRIC (Brazil, Russia, India and China) countries will have significant impact to some of our key markets. We have significant international travelers in many markets and are proactively engaging emerging travel markets.”

Interstate Hotels & Resorts manages and develops a 400-hotel global portfolio.

“At Interstate, our advanced revenue system … addresses the complexities of big data, distribution channels, digital/social media marketing and e-commerce to give above-property and hotel revenue leaders a total hotel revenue picture including historical and forward-looking data, among other tools, to manage around these macro shifts.”

Capps: “In the event there is a threat approaching, there are a few tactics we take to make sure the revenue ‘damage’ is minimized. That starts with training the front desk on taking calls related to these events. … Included with that staff communication is the flexibility in cancellation policies and rebooking. Policies are often relaxed if not even removed totally during weather-related events, but we also try to rebook the guest for future dates and retain any bookings.

“Weather events can often be tragic and devastating, and communicating a silver lining seems tough when many struggle, but post-storm revenue opportunities do present themselves. Sales efforts to pick up business can start well before storms hit, as establishing contacts with first responders can lead to potential pickup right after the storm.”

Rodriguez: “Constant communication and accessibility to all revenue-impacting systems are two important key components to ensure an effective means to an unfortunate event are in place. Our revenue-management team utilizes and leverages individual group chatroom applications with all of our properties to ensure all necessary department and key leadership is kept aware of what is occurring at the property and local market level in real time. This allows the entire revenue strategy team the ability to make quick informed decisions and react to unforeseen impacts to market demand. We ensure each member of our entire revenue management department.”

Broussard: “To manage through unplanned events, we maintain demand-based pricing, based upon forward-looking data, by market segment and by channel versus a hotel’s competitive set.”

Anderson: “A prebaked plan for each occasion in all customer-acquisition departments is crucial. Typically revenue management holds a very offensive role in these scenarios where sales can action against customer bases and marketing can respond offensively … with prebaked promotions.”

Capps:“One disruptor for us as a company, and in many of our markets, is the addition of independent hotel supply. … We are starting to see this segment grow in many markets, including Charleston, Nashville and Atlanta. Supply growth with branded hotels can often be a non-factor for us, but a large influx of independent hotels can obviously cause us to review our positioning. On the revenue-management side, you do a lot of research from a SWOT (strengths, weaknesses, opportunities, threats) standpoint to understand your positioning versus a new independent hotel … a small amenity or service could mean the difference in a few occupancy points. We look for things like complimentary amenities and weigh those versus our offerings. When it comes to pricing, we direct our revenue and sales teams to do everything they can to stay connected to the entering supply.”

Rodriguez: “Increases in market supply is what we are monitoring closely. Additional brands and room supply will be added to most of our markets throughout the year. The revenue-strategy team will have to maintain constant vigilance to monitor when these properties will become bookable and what impact it will have to demand and price positioning.”

Green: “New supply has been our biggest challenge. Several of our key markets are oversupplied, which just creates a tough situation. The re-emergence of the condo hotel product in a few markets is impacting performance as well. I say pay attention to your fundamentals, fight to make more than your share of these all-time metrics and power through until we turn up again.”

Capps: “One major lesson for disruptors is to not overreact. I think you see it happening now with Airbnb compared to how the (online travel agencies) were handled. … By not overreacting and really understanding what is causing the disruption, the industry can try to adapt and adopt. For instance, there are components of the Airbnb booking process that hotels are following. … In seeing this, our revenue-management team has gone back to our booking-engine providers with this feedback, to integrate better booking and communication options.”

Rodriguez: “The biggest lesson we’ve learned is to not overreact and panic. Despite these disruptors, demand is still projected to continue to be strong in most national markets. As long as the revenue-strategy team is truly aware of the current demand generators in the local market and has developed a strategic digital marketing action plan to capture the opportunities, the property will be less vulnerable to disruptors.”

Green: “Understanding the market dynamics, utilizing technology and having the best data analytics is paramount to effective revenue management. Your revenue-management team needs to be proactive and focused—you can either find a way to win or give up; I prefer to win. You must be relentless, drill into what SRPs (special rate plans) or offers are booking, pinpoint the demand and market to channels that can move share to your proprietary booking systems. As far as Airbnb—it’s my opinion that we just need to be the best version of ourselves and ruthlessly pursue the segments we own.”

Anderson: “My guiding light when seeking to weigh out impending trends or disruptors is to ask if this change makes the customer-purchase path easier and the experience more personal. If you get a ‘yes’ to either question, buckle up for safety—the impact will be real. I never recommend a strategic change (like a more aggressive cancellation policy) that does the opposite of this.”

Broussard: “Airbnb and other alternative-lodging options primarily impact markets and traditional hotels during high demand and special event periods, increasing supply and diluting ADR. One of our guiding principles is to anticipate and forecast occupancy based upon published pipeline and new supply reports, over and above the alternate-lodging disruption already occurring.”