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Published byJohnathan Kelly Modified over 9 years ago
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Wes Anderson Regional Director Revenue Management, North America InterContinental Hotels
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Caribbean Hotel & Tourism Association Agenda The New Revenue Management Linkages to Marketing/Sales Questions
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Revenue Management Fundamentals Price Optimization Optimize Channels of Distribution Optimal Business Mix & Yielding Product Class Opportunity
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Revenue Management Methodology Data Consolidation and Analysis Strategy Development and Buy-in Tactical Application Measure Success (via Data Consolidation and Analysis)
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Revenue Management Fundamentals Price Optimization Consumer Based Pricing Model Competitive Based Pricing Model Niche Pricing Model Margin Based Pricing Model
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Consumer Based Pricing Model Pricing Elasticity of Demand –When markets are elastic, lower rates –When markets are inelastic, raise rates
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Competitor Based Pricing Model Peg rates off of competitor’s rates Assumes you are not the market leader Risk of “Greater Fool” effect –Use a rate shopping service to ensure no anti-trust infringement
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Niche Pricing Model You’ve got to pay my rates to keep the company I’m offering at my hotels… -Isadore Sharp, Founder of Four Seasons Hotels Risk of occupancy depletion in Elastic Markets Requires clear marketing message or positioning
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Margin Based Pricing Model Fluctuates by Supply and Demand Assumes minimum acceptable profit level Works for mid market and luxury hotels
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Optimizing Channels of Distribution Its about Discovery and Persuasion
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Optimizing Channels of Distribution Demand is inherent in channels
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Optimizing Channels of Distribution GDS Retail Internet (Expedia/Travelocity) Opaque (Priceline/Hotwire) Hotel Web Site Hotel Direct (Voice Reservation Services)
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Optimizing Channels, GDS Discovery –Marketing in the GDS –Biasing shelf space placement Persuasion –Content and Pricing
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Optimizing Channels, Retail Internet Discovery –Conversion Percentage –Social Media Presence –Parity Compliance / discount online forwarding –Market Manager Involvement –TravelAds Persuasion –Content and Pricing
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Optimizing Channels, Opaque Discovery –Pricing Persuasion –Pricing and Content
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Optimizing Channels, Hotel Web Site Discovery –Search Engine Optimization Organic vs. Pay Per Click –Measuring Effectiveness Google Analytics Persuasion –Content & Pricing
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Optimizing Channels, Hotel Direct Discovery –Marketing –Public Relations –Sales Efforts –Affiliation with Associations Persuasion –Well Trained Staff –Staff Incentives –Promotions
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Optimizing Business Mix Yielding, the root of Revenue Management Segmenting your business Business Mix / Channels of Distribution / Lead Time
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Product Class Optimization Product Class - rooms priced at different levels Goal against ADR capture of Price Differential Balanced Inventory vs. Fractured Inventory
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Linkages Between Revenue Management and Marketing Marketing/PR generates Demand Revenue Management manipulates Demand
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Linkages Between Revenue Management and Marketing Social Media Responsibilities –Incoming (Trip Advisor) vs. – Outgoing (Facebook) Marketing owns Facebook/Twitter
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Outgoing Social Media Marketing owns Facebook / Twitter, etc Revenue Management prices offers
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Incoming Social Media PR or Departments owns review response Revenue Management owns increasing review volume (Optimizing Channels)
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