Revenue Strategy Management for Hoteliers

1. B. Idrissi
MBA-2B
Course Instructor: L.Craig

2. •Daniel E. Craig
•Josiah MacKenzie Directo of Business Development of ReviewPro
•Jason Lewis VP of Sales EMEA of Siteminder
•Chadi Farhat VP Revenue Mangement & Distribution of Morgans Hotel Grop
Presentator and Participants

3. Plan
• ReviewPro Presentation
• Reputation = Revenue
• Evolution of Revenue Management
• How to fight the rising cost of acquisition?
• How to increase direct booking?
• RevPar or ProPar?
• Recommendations

4. • ReviewPro collects reviews accross the web => tools to track and
evaluate performance with the Global Review Index and the
Sentiment Analysis.
• GRI is used to benchmark competition, maximize distribution
strategy,…

5. Reputation = Revenue
• The results of the Cornell University Research has shown that:
- Revenue can be maximized through online reputation.
- The impact of online reputation on revenue depends on the
demand, the pricing power and also the service/performance.

6. Evolution of Revenue Management
 Revenue Management (RM) is selling the right product to the right customer at the right time for the
right price.
 RM originated in airlines companies in 1980s, and had bing used to improve the performance of a lot of
business like hospitality industry in 1990s.
 To practice Revenue Management certain conditions is required : perishable inventory, fixed resources to
sell,…
 Nowadays Revenue manager has to be a good: analyst, arbitrator, strategist,… The role of revenue
manager continues to evolve: pricing, forecasting and budgeting is not enough anymore, now revenue
managers have to create the demand and work closely with other departments: sales, marketing…
 Today RM challenges : lot of intermediary (OTAs), review sites (tripadvisor)…

7. How to fight the rising cost of acquisition?
Hoteliers are facing a rising costs of acquisition due to commissions…
They need to develop strategies in order to adapt and thrive, by
implementing more digital interaction with customers.
For this, « Customer journey » must be clear:
Dream: being inspired
like with Tripadvisor
Search
Today customer has
more price intelligence,
play on the public
perception of the
brand (Trivago)
Book (booking.yeah)
Gain insight in order to
reach volume
Stay
By creating a valuable
guest experience

8. How to increase direct booking?
 Know the cost effectiveness in order to be ready
to go to a specific market.
 The deal/offer/service has to be good, and create a value added to
the customer like with free wifi, 20% off,… => in order to capture the
audience.
 Optimize the cost of distribution (GDS, OTA, META SEARCH, IBS…)
 It is important to have a presence on at least one of THE BIG 4 :
Tripadvisor, Google Hotel Finder (become stronger and stronger),
Trivago and Kayak.

9. Revpar or ProPar?
• Management contract is related to Revpar
• The fact that the Revpar is still used by many hoteliers and is in fact
an effective metric. But the ProPar is a better way to mesure the
performance of a business, even if it does not take into account the
value of the guest and operational cost.

10. Recommendations
From SiteMinder:
 Have a global strategy.
 Have as more channel distribution as possible, in order to
capture different market.
 Keep auditing and review the content,
 Turn the direct audience in a customer/direct bookers.

11. Recommendations (Suite)
From MORGANS HOTEL :
• Measure the total revenue and not just the rooms revenue.
• Keep in mind that pricing is not the differenciator but the
service/reputation of the hotel.
• Do not stay on the comfort zone/daily routines, when it comes
to pricing think of the customer.
• The key for a good distribution is to play differentiation and
favoritism.
• Do not treat all customer equaly => distinguish the value of
each customer.