6 Ways Revenue Managers
Use Data to
MAKE THEIR
HOTEL
SMARTER
WWW.NETAFFINITY.COM
Your Net Gain
1
Per Channel
Not All Historical
FOCUS ON 2
Data is Bad
CLARITY AND
DATA-DRIVEN 3 Looking to the
Future
DECISIONS
When People are
4
(Actually) Booking
Who's Actually
5
Staying
6 Who Didn't Stay
YOUR NET GAIN PER
CHANNEL
Instead of reviewing the demand for each
channel, analyse the net gain for each channel.
That's simply the revenue from that channel,
minus all costs associated with it (advertising
costs, commissions, etc.).
When you look at how much you get from each
channel, you can only get a true sense of its
value when you also understand how much
you give to that channel.
How much does each channel return when
commission costs are accounted for?
What’s the Average Daily Rate for the
channel? It may surprise to see it’s your brand
site delivering that higher ADR!
Do your own analysis, and remember: numbers
don’t lie.
NOT ALL
HISTORICAL
DATA IS BAD
Looking back helps you plan for the future.
Analyse the spend and lifetime patterns of each channel to
understand if they have steadily raised or lowered the amount of
revenue they bring in, whether they have non-revenue
benefits (like exposure) that outweigh costs, and more.
EXAMPLE: DEAL SITES
Yes, the rate is low and the commission can be high – but the
exposure is great! Exposure, however, doesn’t pay the bills.
You need to analyse the lifetime value of guests that came to you
from deal sites. Did they book again? Did they spend more than
guests from other channels? If you can justify that short term pain
to reward you in the long term, then it is worth doing.
However, if you find that the majority of guests from deal sites do
not stay again, or do not spend more while staying, it may not be
worth your while.
LOOK TO THE FUTURE
Now that we've looked at what you can gain
from the past, let's look to the future.
Decisions on the best action to take must be
based on hotel pace reports. A hotel pace
report, or pick-up report, typically shows total
rooms performance by market, putting the
year in context. You can also create room type
pace reports, week parts (weekday vs
weekend) pace reports, and recurring events
reports for things like New Year’s or a big
local event.
Pace reports enable you to see your likely
demand levels for the months ahead. Find
ways to filter the data in ways that are the
most useful to your hotel.
Balance your own pace reports with industry
pace reports. As we all know, you have to look
further than your own front door to
understand demand patterns.
WHEN PEOPLE ARE
(ACTUALLY) BOOKING
Looking at the average lead in time is important, but this
does not account for outliers. Failing to look at outliers can
be catastrophic – what if your average booking window
for a certain day is 20, but, with outliers removed from the
data set, really should be more like 10?
If you plan and execute a marketing campaign based on
the wrong booking window, you’ll be essentially throwing
money away.
You need to look at each booking window: examine who is
booking and what they're booking in each window.
WHO'S ACTUALLY
STAYING?
There is a world of difference between booked and
stayed business for some channels. You may be busily
inputting or seeing bookings coming in from a particular
channel, but they are not necessarily the ones producing
the stays.
This is where sentiment may become an issue, so watch
out for your or your team’s feelings conflicting with the
facts! A channel might be perceived as being of the
utmost importance because that channel is front and
centre in someone’s mind, but the reality can be different.
It all comes down to the data.
EXAMPLE: AIRBNB
Hoteliers have been expressing concern over Airbnb
for several years now. However, according to pace
statistics from TravelClick, they are forecasting 5.8%
growth in occupancy for Q3 despite Airbnb. Airbnb
certainly is cutting into the market in certain areas
and causing rent and space problems in cities which
are tight on housing, but it is not (yet) a Goliath that
Davidian hoteliers must face down.
The vast majority of their business operates in a
different market than the traditional hotel market.
While there is crossover and lessons to be learned
from both sides, the bottom line is that data should
speak here – not fear.
WHO DIDN'T STAY
Look at the booking lead in time for each channel's
cancellations. Is there a pattern of longer lead
bookings having higher cancellation rates?
If so, how do you deal with it? How do you engage
the person still months from arrival?
We suggest two ways: examining the cancellation
pace and moving on from fixed overbooking policies.
Look at cancellation pace. Normally, the pace report
on bookings will exclude cancellations to give a real
sense of demand. It’s important to look at the
cancellation pace specifically, though, so you can
gauge the expected cancellations for a future date
at any given point.
Move on from the idea having a fixed over booking
policy of a set percentage or a set number. There is
a world of diffidence in being minus 20% on
inventory 3 months out, versus 3 days out.
THE REMIT OF A REVENUE
MANGER IS EVER-EVOLVING
AND ALL ENCOMPASSING.
Be sure all major decisions are based on data. The accuracy and
relevancy of the data you have will depend on the tools you
have.
Your hotel's software applications need substantial and ongoing
investment. Is your hotel ready for success?
We are a team of creative experts, leading the way in hotel technology
since 2000. Our digital marketers, web designers and account
managers are all focused on helping the independent hotelier.
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