In the second article of the series devoted to hotel revenue management we will examine its main components.  

Segmentation

The need for segmentation is a logical consequence of diversity among clients (business travel and tourists, individuals and groups, domestic or foreign, etc.) and the services offered by the hotel (room categories, length and conditions of stay, packages, etc.). Segmentation allows to optimize availability, rates and revenues within individual segments of the hotel’s services. It is important to precisely determine the results of your activity in individual sectors. The concept of segmentation has changed very little since the beginnings of Revenue Management, however, it must currently take into account the enormous changes that took place in the distribution of hotel services within the last few years and the associated increase in rate transparency. 

Forecasting 

Forecasting is the most complex area of Revenue Management and is often based on complex calculations. It is also the hardest element of Revenue Management to implement. Effective usage of forecasting to boost sales and maximize revenues requires hotels to utilize a broad set of techniques and simultaneously prepare demand forecasts, revenue forecasts, strategic forecasts and operational forecasts. Each type of forecast serves a different goal and requires a different approach while having its own specific role in the overall maximization of hotel revenues.  

The revenue management strategy

Although a clearly defined Revenue Management strategy is crucial, effectively communicating its goals and convincing all of the hotel staff to accept them is equally important.  The Revenue Manager will only be successful if he takes into account the point of view of all departments while keeping in mind that the opinions of the management are as important as those held by lower-level employees. Some hotels go as far as to include the customers in their decision-making process and, thus, make use of an objective, external opinion when devising a sales strategy. 

A Revenue Management strategy should set precise, achievable goals and outline a clear set of criteria used to determine whether they are being met. Each of the hotel’s departments should be held accountable for lacking performance and be rewarded for successfully implementing the strategy. 

Rates

Revenue Management is a key tool for setting hotel room rates. The goal is to select the right product for the right customer and sell it at the right time for the right price. Setting the most beneficial hotel rates requires adopting a scientific approach, but nevertheless remains an art. Inadequate rates, being a result of adopting an incorrect customer habits model for example, may lead to lost opportunities for increasing hotel revenue. It is important to observe discipline when introducing Revenue Management and to not bend under external pressure – lowering rates when faced with decreased demand, for example, may cause a spiral of rate drops in the market and have an impact on the long-term profitability of the hotel.  

Availability strategies

Decisions regarding availability, coupled with a rate strategy, have a profound impact on hotel revenue and profitability. Offering a product meant for the right client at the right time is the key to success. It is also very important to effectively manage availability across all distribution channels and to not focus solely on privileged clients.  

Social networks and client opinions on the Internet

Many hotel operators wonder how best to use the potential of social media and websites that allow customers to publish opinions. These media have a direct influence on the manner in which you conduct your business and the new modes of communication allow to build and maintain more effective relationships with customers. Hotels must learn to use this to their advantage and those that do gain a competitive edge. 

Measuring and analyzing effectiveness

That which can be measured is easier to achieve. This holds true for many sectors and is especially important in the hotel industry. Setting precise goals and comparing outcomes with objectives using appropriate indicators (KPI – key performance indicators) is crucial. Implementing a remuneration system that rewards individuals who contribute to hotel revenues is equally important. Employees will focus on increasing sales and maximizing profits if appraisals and remunerations are based on hotel revenue and profitability. 

This article was meant to present the key elements of Revenue Management. The next article in this series will delve into more detail on segmentation, rate strategies, forecasts and comparative analyses of hotels.   

Read PART 1: A step-by-step guide to achieving success with revenue management.

About the Author 

Zak Ali, the Global Revenue Development Director at YieldPlanet, has over 12 years of experience in Revenue Management and hotel distribution. Zak has managed hotels of various sizes in many of the world’s key markets, including London, Dubai and Singapore. He has also taken part in creating a global rate application which has been implemented in 3000 hotels. Zak is a Certified Revenue Management Executive (CRME), a title awarded by the Hospitality Sales and Marketing Association International (HSMAI). 

Instagram strategies to attract gourmets

Food tourism has developed significantly in the recent years. Interests of travellers began to change, which allowed us to fill a niche on the market: the market of travellers who are food lovers.

This market niche chooses its tourist destination to enjoy a unique culinary experience. Tasting the local cuisine and going out to dinner is a way to discover places and contact with the local people.

This romance involving food and travellers is an excellent marketing opportunity for hotels.

Undoubtedly, Instagram is the ideal channel to attract the attention of food lovers travelling or popularly known as Foodies (gourmets). It is visual and makes it easier for travellers to make decisions.

Why Instagram?

Instagram is fashionable. Instagram is in the full sense of the word a social medium for travelling gourmets. Not using this social medium would be a bad strategy.

Many visitors to hotel restaurants will familiarize themselves with their profile on the Instagram to help them decide in advance what to order from the card.

Therefore, hotels are developing their menu in the most photogenic way possible to attract more customers and encourage more frequent sharing of comments on Instagram or other social media of the same kind.

In a recent survey of about 300 hotels, restaurants and food were the most frequently discussed (11,700 posts) topic in social media posts, followed by “Beverages/Bar”. (6,400 posts). This is something you should take into account in your Instagram strategy.

These results show how important it is for hotel guests to share culinary experiences and the fact that hotels use social media to promote their own visually appealing dishes and attract more travellers obsessed with food.

Hotels using Instagram marketing to sell food to food lovers can thus differentiate themselves from the competition, delight hotel guests staying in their homes with food, and at the same time increase the willingness to book, which in the long run means higher income.

Therefore, we share below the four most successful strategies on Instagram to attract gourmets and get more bookings at the hotel.

1. Work with influencers

Working with social influencers is an excellent way to gain credibility and promote the hotel restaurant to a wider audience.

Prepare a list of influencers that fit into the profile of your hotel and your style. Contact them and implement your strategy. Reach out to a wider audience and be more visible in different parts of the world.

Be creative. Invite a travel writer or culinary blogger to your hotel and let them taste the tasting menu comprised of your outstanding dishes. We assure you that the results will be excellent

2. Choose the right hashtags

In addition, choosing the right combination of hashtags can have a huge impact on the effectiveness of posts on the Instagram. Make sure you choose a general range of hashtags as well as the one from the market niche you want to reach.

Do not forget that your hashtags should always be related to the content of your images. It is important to test the hashtags to determine which have the greatest impact on hotel comments, likes and bookings.

3. Comments increase engagement

It is also important to add contextual comments to the images, such as the name of the food, its origin or information about a special ingredient worth mentioning.

Not all dishes have a story, but a funny comment or conversation starter can help increase the involvement of your fans and new gourmets who will be following your account through interesting and visual posts on your hotel profile. Let people talk about your hotel.

4. Optimize your profile on Instagram

And don’t forget to constantly optimize your Instagram profile in line with trends in social media, hospitality and F&B. Don’t forget that both the quality of the images and the descriptive part of your profile are of great importance. Be creative and distinguish yourself from others.

As revenue management in the hospitality industry grows, hospitality professionals need to be aware of their key role in the hotel sales strategy, paying particular attention to new market trends. Technology and customer behaviour are basic aspects that every professional should take into account and evaluate. All the latest trends in revenue management focus on changing customer preferences and technology that acts as an obstacle and a supporting element at the same time.

Below you will find three trends in revenue management and how hoteliers should approach them:

1. Prices for regular customers

Loyal customers of your brand are ready to pay more for your product or service. However, in order to get more direct bookings, many hotels can offer discounts to clients who book directly through the hotel’s website.

In fact, revenue managers need to explore all booking channels and the marketing costs of each of them (including the direct channel) to avoid situations where guests make bookings through OTA (Online Travel Agents) that charge high commissions.

The direct booking channel also involves costs, but the task of the revenue manager is to optimise the costs across different channels.

2. New sales channels

Although OTA and meta search engines have long been dominant in online distribution channels, Google and Airbnb seem to be prepared to throw them off the pedestal.

Google, which is a step ahead of Kayak in terms of airline references, now enables customers to book hotels instantly using the travel tool. Google offers the same selection range and good or better conversion rates compared to Expedia or Booking.com. To this must be added the 3.5 billion searches made every day at Google. Google has a fixed rate of about 10 percent, which is much less than the commission charged by some OTAs, which can reach 30%.

In addition, Airbnb has officially opened its hotel distribution platform. Boutique and B&B hotels are tempted by offers without long-term contracts and low “service rates” ranging from 3 to 5 percent.

3. Personalization for generating direct bookings

In a survey conducted in the United States, more than half of consumers check their email 10 times a day and prefer to receive brand updates via email than via regular mail, mobile applications or social media.

When it comes to brand updates related to travel and accommodation, 84 percent of respondents prefer these emails to be personalised.

The personalization process is not only carried out in the company itself, on the spot. The new trend shows that personalisation must start during the booking process.

It is not necessary to have a database with preferences or specific data, but the ability to analyse and anticipate the needs of clients based on characteristics or similar attributes of their stay.

The three new trends in revenue management that we find interesting this year are: pricing strategy, personalization and the inclusion of new players in online distribution.

This year, FITUR, the leading fair in the Spanish and Ibero-American market, will be held from 23 to 27 January 2019 at the Feria de Madrid with a larger exhibition area than past years.
FITUR 2019 is preparing one of its most complete editions, in which sustainability, technology and specialization, will continue to have a prominent role.
Yieldplanet will be present with two of its tools: Channel Manager and Price Optimizer, to help your establishment increase revenue.
YieldPlanet Channel Manager is an extremely fast and accurate distribution solution. It allows you to synchronize data between your establishment with hundreds of OTAs, GDS and your own web page. YieldPlanet offers the most flexible solution on the market to optimize the prices of your rooms and your offers.

The YieldPlanet’s Channel Manager is the most flexible Channel Manager in the market, allowing you to combine formulas within the mapping without limitations, assigning maximum or minimum quotas for a certain type of room, even if you include it in the general shared quota, in addition to combining discount supplements or meal plan loaded by occupation or by room.
On Wednesday, January 23, we will offer a Master Demo of the Yieldplanet’s Channel Manager in our Stand at Pavilion 10 10B17 at 17:30. You cannot miss this opportunity!

YieldPlanet’s Price Optimizer is a combination of an income management system and a channel manager for intelligent distribution of prices. Price Optimizer drives your RevPAR through effective and fast performance management.
It optimizes prices, availability and restrictions, and distribute them according to the strategy that you define automatically to all connected channels.
And it works connected to your PMS as a comprehensive solution, so you can effortlessly manage your dynamic pricing strategy.
On Thursday, January 24, we will offer a Master Demo of Price Optimizer in our Stand at Pavilion 10 10B17 at 17:30. You cannot miss it!

If you want to know more about our tools, request an appointment with us at FITUR or visit us at Stand number 10B17 in the FITUR KNOW HOW EXPORT pavilion.

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