October FOCUS

Revenue Management: Focus On Profit

Revenue Management: Focus On Profit

Revenue Management is still a relatively new profession within hotel operations and as such, it continues to evolve. One significant trend in this area is a shift away from using revenue as the foundation to generate key performance indicators (KPIs) and to instead place the emphasis on profit. Traditionally, revenue managers have relied on total revenue per available room (TrevPAR) and revenue per available room (RevPAR) as the basis of their KPIs. Now, some revenue managers are using gross operating profit per available room (GOPPAR) as their primary KPI. This puts profit at the center of revenue management strategy, and managers are increasingly searching for new ways to increase the profitability of their hotels. Return on Investment is the objective of any hotel investment, so it is only logical that profitability and ROI will be emphasized going forward. Another trend is an expanded focus on direct hotel bookings. Revenue managers know that one way to increase profitability is to steer guests away from online travel agencies (OTAs) and book directly with the hotel. This tactic also reinforces brand identity and loyalty, and encourages repeat business. In addition, it provides a valuable platform to market the hotel directly to the customer, and to upsell room upgrades or other services to them. Another trend for revenue managers involves automation in their software programs. Revenue management systems with automation are far more desirable than those without it. Automating data entry and logistics increases efficiency, allowing managers to spend more time on formulating strategy. As a bonus, an automated system helps with aggregating and interpreting data. The October issue of the Hotel Business Review will address these developments and document how some leading hotels are executing their revenue management strategies.

Library Archives


Last month's feature articles...

Robert Post

From where we sit in the hospitality space, we are seeing the industry suffer from an over-reliance on inbound as the primary source of group business. This dependence is leading us to a commoditization within group, where rates are becoming the only differentiator between properties. But what if we could change that? What if there was another source of business that would allow hotels to reclaim their control of group sales, allow them to build stronger repeat business and ultimately a more profitable property? In this article we will explore why hotels are struggling today to meet group targets and propose alternative ways to sell group that are more profitable. READ MORE

Lawrence Adams

Traditional goals for business conferences include Education and Learning, Sales and Business Development, Networking; Team Building and Industry Innovation. But meeting planners have been focused on a new trend in recent years: Experience Creation. And in that endeavor we are seeing amazing new technology applied to creating unique and inspiring experiences for meeting goers. In this article we will explore some of the latest technological developments and methodologies, including Virtual Reality (VR), Augmented Reality (AR) and Holography, as they apply to the enhancement of all of the aforementioned meeting goals. READ MORE

Greg Pesik

The management of groups, especially small groups and meetings, is at an inflection point in the industry. The industry has long relied on antiquated methods, such as room lists, as a core component of that management process. However, room lists are just symptomatic of a non-guest, non-planner centric approach to the process. The industry is not only poised for change, but must change to meet the demands of the digital age. READ MORE

Sherrif Karamat

Business events are more than just meetings, trade shows or conferences at hotels and convention centers. The $1.05 trillion industry is a platform for economic and social transformation in addition to driving organizational success. There's a powerful community legacy created by business events through social impact and job creation. And, there's a knowledge exchange that benefits us all. Discover how global business events with different purposes contribute to the greater good and how business events can tackle complex issues in our society. READ MORE

Cheryl Ferguson

After three decades in the hospitality business, one of the biggest shifts I have seen has been in the role of the meeting planner. Long gone are the days of just booking a location, setting up the AV and rolling out the buffet. Today's meeting planners are big idea people, technical wizards, curators of culture and deliverers of WOW experiences. The realm of group meetings has become competitively charged, keeping planners on their toes, as they must address the rapid evolution of technology and continuous flow of new trends. Here are some trends, tips and best practices for planning your next group meeting to create pathways to inspiration, memorable experiences, and lasting connections. READ MORE

Allison Handy

Because high-quality hotel meeting and conference facilities are a reliable way to generate revenue and drive food & beverage profitability, experienced hotel owners and operators understand the value of great meeting and event spaces. The question is what does a "great" meeting space look like, and how has this changed in recent times. There is no one answer, of course, but with the growing trend of businesses and leaders looking for creative and non-traditional spaces for their professional events, more hoteliers are finding innovative ways to identify or create those unique environments and memorable experiences. READ MORE

JC Chang

When planning an event, the venue is vital to creating an engaging experience for attendees. A meeting space is no longer a place for people to sit and listen to someone talking on stage; it's an opportunity to engage and transport attendees with a memorable and creative atmosphere. To cut through the "predictability," it pays to choose a fresh space that break from convention. Because client entertainment is an important part of doing business, we've identified five venue categories that work as stand-alone experiences or as part of multi-event programs to meet relationship-building, client education and ROI-generating event goals. READ MORE

Peter Strebel

As meeting planners strive to integrate unusual settings into their events, more and more business is being driven away from hotels and resorts in favor of off-site venues such as zoos, aquariums, botanical gardens and museums. For our industry, it presents both a challenge and an opportunity to evolve our business in a way that meets the needs of meeting planners' shifting priorities. The way to maintain their business on-property is to adapt with creative, inventive ways to ensure hotels are just as authentic to their destination as any of these alternate sites. READ MORE

John R. Hunt

Offsite events in the hospitality industry have become increasingly popular. While these vary in the kinds of activities and venues involved, all of them require some advance consideration of the risks that may arise. For example, some events may involve a greater danger of possible physical injuries while others may create the potential for employment-based claims. As a result, meeting planners, the company sponsoring the event, and even hotels should review these risks during the planning stage of the event along with possible insurance coverages. The following article explores this kind of assessment in greater detail. READ MORE

Brian McSherry

In an effort to stimulate creative thinking and encourage team-building among their groups, event planners are breaking the conventional mold by moving out of traditional conference facilities and convention hotels into university lecture halls, community theaters, warehouses and even tents. They concurrently are teaming up with nonprofits in conjunction with their organizations' community outreach programs. Nontraditional venues typically present a new set of challenges for planners who, regardless of the venue, are still are expected to exceed expectations. READ MORE

Johan Terve

Meetings planners constantly up the ante with exciting conference destinations, utilizing memorable venues such as zoos, museums and outdoor locations. These uncommon venues pose a unique challenge: that of bringing must-have internet connectivity to these extraordinary locations. Wi-Fi is the way to bring in internet quickly, at reasonable cost, and with minimal effort. This article will discuss bringing a carrier class guest Wi-Fi experience to even the most uncommon of destinations. It will cover how to pop-up temporary Wi-Fi services, with and without existing Wi-Fi infrastructure, what It takes to provide "Wi-Fi in a box," and how to leverage Wi-Fi for loyalty and marketing purposes. READ MORE

Dawn McClure

Market conditions impact our planners tasked to make decisions on destinations for future meetings and events. Taking a strategic look into the cycle to source and confirm the right venue to host your program we explore best practices to find availability in first tier destinations, what to look for when you cannot find availability in your destination of choice, and other costs and concerns driven by the market to be mindful of when sourcing an upcoming program. These practices have proven results navigating the uncertain market conditions of today and the future and could set your programs up for success. READ MORE

Jessica Levin

Corporate Social Responsibility (CSR) is not just a trend, but a common business value. For over a decade, major corporations have implemented CSR initiatives focused on sustainable practices, ethical business, investment in the community, health and wellbeing of employees and general philosophies about being good citizens of the planet. For events, CSR appears in various formats like incorporating sustainable practices of going paperless or having water stations instead of plastic bottles or volunteer projects like supporting a local charity. These initiatives play a role in venue selection and offer opportunities to use non-traditional space as part of a meeting or conference. READ MORE

Sophie Neubauer

Generation Y, The Millennials. Generation Next - These are just a few of the names attributed to the generation born between 1980 and 1999. Millennials, now 19 to 39 years old, were the first to grow up in a digital world, they are the so-called digital natives. To put an entire generation into one category is a crude generalization, however, this generation does share various characteristics. They are characterized by an absolutely experienced approach to the World Wide Web and social media and they not only use but master all of the advantages of the digital world. This article will explain what Millennial "Bleisure" travels expect from the hotel industry and why independent hotels are the perfect match. READ MORE

Coming up in September 2020...

Hotel Law: Protecting Guest Privacy

Every business is obligated to protect their customers from identity theft but unfortunately, data breaches have become all too common. In an effort to protect a guest's right to privacy and to safeguard their personal data, the European Union passed a General Data Protection Regulation (GDPR) that could hold hotels legally liable for any breaches that expose a customer's sensitive personal information. Though the GDPR only pertains to EU citizens' data, any international business that mishandles their data can be legally responsible. Another legal issue of concern is the fight involving hotel "resort fees." Several states attorney generals have recently filed suit against two major hotel chains in an effort to litigate this practice. Their suit alleges that these companies are "engaged in deceptive and misleading pricing practices and their failure to disclose fees is in violation of consumer protection laws." The suit seeks to force the hotel chains to advertise the true price of their hotel rooms. There are several other legal issues that the industry is being forced to address. Sexual harassment prevention in the workplace is still top of mind for hotel employers-particularly in New York and California, which now statutorily require harassment training. Hotels and motels in California will also soon be required to train all their employees on human trafficking awareness. Immigration issues are also of major concern to hotel employers, especially in the midst of a severe labor shortage. The government is issuing fewer H2B visas for low-skilled workers, as well as J-1 visas for temporary workers. Though there is little hope for any comprehensive immigration reform, hotel lobbying groups are actively seeking legal remedies to alleviate this problem. These are just a few of the critical issues that the December issue of the Hotel Business Review will examine in the area of hotel law.