New Year, Fresh Revenue Strategy Perspective - Takeover your hotel again!

It's that time of year again when you start hearing those same buzzwords being thrown around by everyone. Words like new, fresh, change, resolutions, beginnings, reset, and starting over can be heard in almost every conversation in January. These words all hint at taking a new perspective on something and making changes accordingly to show growth, improvement, and overall renewed satisfaction. Those same words and sentiments are very relevant to our role as revenue leaders in the hospitality industry. Now is a critical time for revenue strategists to look at their properties in a new way with a unique perspective, and the best way to do this is as if they are "taking over" the property for the first time. This idea of the hypothetical hotel takeover makes it possible for you to take a step back and look at all aspects of revenue strategy with a fresh set of eyes and a clean slate to do what is needed to keep moving the needle in a positive direction with no preconceived notions. What does this look like in a tangible way as far as implementation? It really focuses on five main areas for revenue strategists to dive into and reassess: competitive set/market dynamics, pricing philosophy, revenue system settings, segmentation, and use of available resources. 

Validate your competitors 

A great starting place is to relook at your STR competitive set and see if it still makes sense for your property. Are the competitors listed true, viable comparisons for business segments in your hotel? Are there any anomalies that happened in the previous year that would cause a hotel to be removed/added to your competitive set? Examples could include (but are not limited to) a hotel closure, a new hotel opening, a brand change, and product/amenity changes. It's important to analyze your true competitive set at least once a year (twice is even better) to see an accurate view of your performance and potential revenue opportunities. You can always keep your original competitive set but shift it to a secondary set for tracking purposes if it's tied to a proforma or needed by ownership/management for any reason. If your primary competitive set isn't who you really compete against, then the data becomes irrelevant. Being able to know your key competitors means there is a solid understanding of the overall market dynamics – what's changed, what we need to focus on now, what has shifted between hotels, what new business segments and demand generators are there? These are all questions that should be discussed as part of this process to determine the validity of your primary competitive set. 

Re-imagine and align your pricing philosophy 

Does the current pricing strategy in place match what you are trying to achieve financially for your hotel? Budgets and goals are different each year, and we already know that market dynamics can change vastly. Is your pricing strategy keeping up with these changes? This is a critical step to analyze with your full revenue team for the hotel. A stale or stagnant pricing strategy can lead to an obvious miss of budgetary goals, losses in market share, and a much bigger loss in credibility for a revenue leader. Look at your hotel as if your company just took it over and analyze seasonality, day of week trends, Best Available Rate (BAR) & Member Rate comp set trends, demand patterns, lead times, length of stays, room type differentials, sell out efficiency and understand what Key Performance Indicators (KPIs) should be maximized for given periods to ensure all financial drivers are being met. That is true pricing power at play!

System deep dive & tune-up 

Audit! Audit! Audit! No setting gets unchecked – dig deep here – spend the extra time needed as this best practice doesn't get completed as often as it should. Now that you have a clear idea of your key competitors and overall pricing philosophy, it's time to "pop the hood" on all your systems that directly impact revenue performance. Picture yourself seeing these settings for the first time and ask the questions of why they are in place, and there should be a change moving forward. Some of these systems include the Property Management System (PMS), Central Reservation System (CRS), Revenue Management System (RMS), and Online Travel Agency (OTA) extranets. This could also apply to other applications, such as RFP programs and BI tools. It should be a granular approach to understanding what specific settings need to be in place for all policies, rate plans, room types, restrictions, and revenue-generating actions. Curiosity is your best friend here, and questioning everything allows you to think if it's really the correct setting in place. 

Optimal business segment remix 

Are your revenue strategies targeting the most optimal business segments for your property? Your ideal business segments for your property should be broken out day by day in your rooms budget and then detailed further in your strategic business plan – the next step is determining if your sell strategies directly support these goals/plans for driving production through these targeted segments for the full annual year 

and beyond. Yes, it will get tweaked through the year, but it's important to set the hotel up for success from the start. Strategies by segment are analyzed by season, day of the week, and demand level to ensure we are always going after the best business for your hotels. Segmentation trends can look very different by market, location, chain scales, brand, and product offerings and can change each year. Take an outside perspective looking in, and see if your strategies are deployed effectively. This segmentation discussion should be a part of your collaboration with your full Commercial Strategy team to include both Sales & Digital Marketing. Their key insight toward targeting the most optimal segments for the hotel will be very beneficial and lead to effective strategy implementation.  

Use everything in your arsenal 

There are hundreds of available tools and resources out there. Some are complimentary, and some are costly. It's critical to know which ones could help give your hotel that competitive edge while driving production and exceeding your performance metrics. Even after all tools and resources have been identified and activated, it's how you use them that ultimately matters. Relook at previous usage of tools 

to see what action needs to be taken to either improve usage or remove them altogether if no longer applicable. The goal is to take advantage of everything available to your hotel and make it work for you. This is where "do what matters most" comes into play as you want to spend your time and money wisely, so it results in the highest return on revenue for your properties. Work with your Sales & Digital Marketing teams, do the research together, and know what is out there for business analytics & intelligence, as it could reap major results if utilized effectively.

Re-Takeover your hotel & see what actions can translate to increased revenues, profits, and market share 

Approach your hotel as if it's day one, and you have just been handed the revenue reins! It's time to see how to outperform yourself by staying open-minded while taking an outsider-looking approach to everything. Get your full Commercial Strategy team involved through this whole process. Each new perspective can help identify new strategies and ensure nothing is being completed in a silo. This best practice should be done a minimum of once a year and can bring immediate positive revenue impact. Every hotel can benefit from this regardless of if it is a stable hotel that continues to crush or a struggling hotel that is in a tougher market. There's always room for improvement, and sometimes it's just about mindset – hypothetical hotel takeover for the win!