Spot Light on Revenue Management for Small & Independent Hotels
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Spot Light on Revenue Management for Small & Independent Hotels



This presentations shares the best practices which yielded results for properties in New York City...

This presentations shares the best practices which yielded results for properties in New York City...
This was presented in a recent Eye For Travel conference.



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Spot Light on Revenue Management for Small & Independent Hotels Spot Light on Revenue Management for Small & Independent Hotels Presentation Transcript

  • Spotlight on Revenue Management for Small & Independent Hotels Sameer Mehra Regional VP – Revenue & Distribution Highgate Hotels
    • Investors - formed in 1986 with properties in US, Canada and Europe
    • Owners – over $5 Billion Assets
    • Managers – 15,000 keys in management
    Highgate Hotels OUR STRATEGY Acquire hotel assets in key markets ( NYC, SFO & LAS ) and dramatically improve profitability through: 1) Revenue & Distribution 2) Cost Control
  • Spotlight on Revenue Management for Small & Independent Hotels
    • Unique challenges?
    • Reservations managers as potential revenue managers?
    • Suitable Revenue Management technology?
    • Build guest loyalty with a rational pricing strategy?
    • Increase revenues when you've got high occupancy rates?
  • 1. What are the unique challenges posed by small and independent hotels?
    • Absence of Brand Name
      • Weaker Distribution Network
      • Inability to position the property globally
      • No Loyalty Program
    • Challenge to promote own Website & capture market share
    • High dependency on OTA’s
  • How do we strengthen the Distribution Network? It's all about Reach...
  • Focus on strengthening presence on GDS GDS Campaign
  • GDS Ads-Promo Spots Promotional Message tag line attached to air & hotel availability displays. The one line message directed to Travel Agents guides them to promo-spot text screen for details about your property
  • Text Screen for details...
  • Sabre Spotlight Take care of sort order on GDS screens
  • Graphical badge ad with a click through screen functionality MySabre Graphical
  • How do we position the property globally? Expanding your Reach
  • Expose the property globally
    • Join hands & develop relationship with key suppliers to market your property and generate demand
      • Tour Operators has strong presence in specific markets
  • OTA Small & Indy Hotel
  • How do we build loyalty?
  • Alternate to Loyalty Program
    • Attract customers through incentives as a substitute of points…( Cash Back !!!)
    • Unique experience and not cookie cutter brand experience
    • Capture e-mail through all sources on guest booking and inter-actions – e-mail marketing
  • Website Market Share
  • Website Awareness to Capture Market Share
    • Design and Develop a High-Conversion Website
    • Maximize Free Traffic from Search Engines
    • Protect Your Brand Name
    • Capture New Demand in Paid Search
    • Partner Strategically with Other Websites
    • Keep Consumers Engaged Via E-mail
  • Step A : Develop a High- Conversion Website Prominent Promotional Section Large Image Space Easy To Use Navigation Strong Calls to Action
    • The design should be image- rich and fit the style of your hotel
    • Prominent calls to action are imperative - reservation links, special offers and short-time promotions should be highlighted
  • Step B : Maximize Free Traffic
    • 70-80% of online travel searches are brand-agnostic terms
    • Organic search takes 3- 9 months to start to see placement, but it is free traffic for the life of your placements
    • Select the most relevant , highly searched terms for your website
  • Step B Cont… : Maximize Free Traffic- Local SEO
    • Local SEO is now part of all standard search results
    • Opportunity to own additional real estate on major search engines
    • Information to directories - Google, Yahoo!, and Bing as well as a variety of Internet Yellow Page and directory sites
  • Step C : Protect Your Brand Name
    • Third Parties will bid on your brand name in paid search - independent hotels must spend aggressively in this arena to protect against channel cannibalization
    • Ad copy should convey a best rate guarantee & compelling offers to keep loyal guests off of 3 rd party sites
    • Monitor your reviews on user-generated content sites and respond frequently to mitigate any negative feedback
  • Step D : Capture New Demand in Paid Search
    • Complement Organic Search by offering timely special offers rate specials to attract demand
    • Track all activity so that money is only spent on campaigns that work and the best converting offers become most often promoted
  • Step E: Partner Strategically With Local & National Travel Sites
    • Partner with websites that attract your target traveler to drive traffic directly back to your website
    • Partner with local, national and regional travel sites
    • Partner with demand drivers like attractions, universities and partnerships
  • Step F: Keep Users Engaged With E-Mail
    • Once a traveler has visited your website or stayed at your property, the best way to keep them engaged with your website is via e-mail marketing
    • Tailored offers by segmenting your guests
    • Respect subscribers by staying within CAN-SPAM laws and only reaching out with compelling offers to avoid high “unsubscribe” rates
    • Keep e-mail design and tone consistent with website and other marketing materials
  • High dependency on OTA's Higher Margins -> Lower ADR's
  • OTA’s can benefit you
    • They are 800 pound gorillas
      • Take advantage of their merchandising power
      • BILLBOARD effect to reduce your cost of doing business (helps ADR and marketing)
      • Sort order placement
      • Rate parity with you own website to increase ADR
    48 hrs Sale on OTA’s & Website (Book now for $99) OTA’s 1000 RNTS @ $75 Website 2000 RNTS @ $99 Hotel 3000 RNTS @ $91 Generated business & reduced cost by 16% Increased RevPAR Index by 15% for that month
  • 2. Should you look to reservations managers as potential revenue managers?
    • Why?
      • Very knowledgeable with systems and product
      • Familiarization with source of business could be very helpful in managing the distribution network for profitability
      • May have ample ideas
    • What you should look for?
      • Experience
      • Skill sets (education, analytical skills and computer knowledge)
      • Aptitude
      • Change management skills and open to ideas
      • Social inter-action skills with excellent communication to interact across all management levels and suppliers
      • Strong negotiation skills
      • Above all… Go Getter !!!
  • But be sure he/she…
    • Steps out of Reservations mode
    & lifts hotel through yielding...
  • 3. What revenue management technology is suitable and affordable for your business?
    • Typically the software’s available off the shelf are expensive, too elaborate in data collection and complicated to work with
    • What we should look for?
    • Easy
    • Simple upload
    • Quick snap shots & reports
    • Generate trends
    • Easy to extract output
    • Not expensive
  • Date comparison with past data
  • DOW Trend
  • 4. How can small and independent hotels build guest loyalty with a rational pricing strategy?
    • Rate parity
    • Offer options at different price points
    • Travel agent incentives
    • Reward and appreciation of repeat guest
    • Monitor guest reviews and respond frequently
    • Clearly communicating the price in booking process
    • Ease of booking
  • Options Offered
  • Instant display of rebate
  • Higher Occupancy leads to Higher Revenue Not Really!!!
  • 5. How do you increase revenues when you've got high occupancy rates? Critical Dates Make it or Break it...
  • RevPAR Index 150%
    • Premiums on room types
    • Distribution network management for higher ADR’s
    • Control contracted rates
    • Displacement analysis for bulk business
    • Prevent over-booking of lower room types and promote higher room types
    • Promote upsell at booking time and at arrival
    5…contd… How do you increase revenues when you've got high occupancy rates?
  • Snap Shot
    • Partnering with key suppliers
    • Strengthen your distribution network
    • Participate in OTA’s
    • Build loyalty through unique guest experience
    • 100% focus of driving market share through your own website
    • Invest in a dedicated Revenue Manager
    • Invest in a suitable software to help the Revenue Manager
  • Thanx Sameer Mehra Regional VP – Revenue & Distribution Highgate Hotels