1. MARKET SOURCES
WEEK 7

2. INTRODUCTION
A business owner conducts research to understand his target market, outclass competitors, and improve his business plan and marketing strategy to sustain long-term growth. You must gather a range of information, such as statistics and industry reports from various sources, to gain a clear picture of market trends and anticipated or predicted changes in the market. Determining the market sources you need will require that you explore more than one research method.

3. HOW TO DETERMINE MARKET SOURCES
Contact business owners working in your industry who aren't your regional competitors and ask them where they gather information for their market research. Ask vendors, manufacturers and others in your industry whom you interact with on a regular basis, and who conduct similar research, if they would be willing to compare research methods and share market data or market sources. Seek assistance from trade or other associations, your local chamber of commerce, and regional or online business resource centers that have the market information you need or can direct you to the best places to acquire it.

4. Check out general business and industry-specific print and online news and association publications and outlets. Look for links and references related to market information, or other publications or outlets that can provide the information. Visit public, business and college libraries and use reference catalog systems to search for general or industry-specific papers, magazines, books and other information. In addition, ask a reference librarian or other library staff for help. Go to a business college or a university business department and ask for assistance from professors who are experts in your industry or in marketing or market research. They often conduct market research to gather information for related lessons and for papers they intend to publish. Contact the authors of articles, books or newsletters relevant to your industry who have already conducted this type of research and can provide you with data or sources.

5. Hotel Market Segmentation
One of the components needed to apply hotel revenue management is market segmentation. It allows you to target and market to a variety of consumer groups with different behavior with an offer that matches their needs and budget level. Your hotel market segmentation shall help to identify the purpose of the trip: either business or leisure. The price does not decide of the market segmentation. Clear distinction must also be achieved between individual and group business. The market segmentation shall help you identify the trends of your business: Length of Stay Day of Weeks stays Total Revenue per room, Total Revenue per client Booking Lead Time Cancellation % No Show ratio

6. Today's ways of booking make it difficult to identify the purpose of the trip. Segment by default the individual bookings for short midweek stays as business. Identify as leisure reservations of double rooms over the week-end. And which market segment to apply to Internet bookings? You can also introduce the following question in the reservation process on your hotel website: Is your reservation for business stay or leisure? You may want to introduce sub-segments such as your pricing points such as BAR and how yieldable the segment is.

7. Here an example of a hotel market segmentation :
Public
BAR Website -  Best Available Rate sold throught the website
BAR Direct - Best Available Rate sold direct by phone, , fax
BAR Indirect Commissionable  - Best Available Rate sold trough commissionable online travel agencies
BAR Indirect Net - Best Available Rate sold trough net rate online travel agencies
Promotions
Opaque; hidden hotel discount programs
Flash Sales; promotional website offering membership discounts
Mobile; mobile websites offering sameday or lastminute discounts
Online Campaigns; internet publication offers and packages
Offline campaigns; print publication offers and packages
Special Event; packages and offers during holidays, festivals, concerts

8. Negotiated Rates
Corporate Dynamic Rates
Corpororate Flat Rates
Government
Crew
Groups
Leisure
Business
Conference / Banquet
Incentive
Wedding
Events

9. Wholesale
FIT
Tour Operators
Wholesalers
Other
Complimentary
Barter
Walk-In
Overbooking (from another hotel)
House Use
Time Share

10. Yieldable vs. Non-Yieldable Segments
How much of your business is yieldable? And how much of your business in non-yieldable? Or how much of your business allows you to really apply revenue management? These questions are crucial for your hotel revenue management strategy.
The non-yieldable market segments are the bookings which you can not reject even if you could sell at a higher rate on those dates i.e. Last Room Availability You should have a clear picture of when your contracted accounts produce. How many times in the year do you have to accept contracted bookings when you could sell at higher rates? (LRA) corporate contracts, Tour Operators allotment, etc. Of course your accounts should be producing year through. Still it is recommended to make the evaluation to recognize which months you may be losing revenue against the months the accounts bring additional revenue. The balance should of course be positive!

11. Displacement Calculation
Are your contracted non-yieldable segments adding to your bottom line? Or are they displacing revenues that can be generated by selling public transient rates? Important questions from a revenue management perspective. In the example below, if a LRA (Last Room Availability) account books 2 nights arriving 04 February, the hotel will have to accept the reservation. Let's say that the account contracted rate is 100 euro. The hotel will lose with that stay 200 euro (corporate room value minus the last room value.

13. The last room value (LRV) is the total value of the last rooms to sell
The last room value (LRV) is the total value of the last rooms to sell. It can also include the Total Revenue or the Total Net Revenue. A displacement calculation or analysis should be regularly performed on your main accounts to evaluate the revenue gain: revenue displaced on identified dates minus the positive revenue on non-constrained dates. In hotel revenue management that requires extracting the day by day production of your TOP accounts (Tour Operators, Corporate, Consortia and IDSs) and evaluating day by day the possible displacements.

14. Hotel Revenue Management Action Steps 2
Based on the previous articles on the components of revenue management, KPI, market segmentation, yieldable and non-yieldable business and displacement calculations have defined a few simple action steps for hotels revenue management
Here are your second steps in our Revenue Management action plan:
Challenge your market segmentation, should you introduce pricing points?
Identify non-Yieldable segments, and try to move them to become semi- yieldable.
Can you identify trends and KPI per market segments? Check which PMS reports can provide knowledge on;
Length of stay per arrivale date.
Lead time information per day of the week and segement.
Cancellation ratio per day of the week.
Total revenue per client and market segment
Can you move some of your non-yieldable segments to become yieldable or semi-yieldable?
Review the production of your main clients on basis of the displacement analysis. What is their true revenue gain? Assess if you could revise your pricing accordingly.