This document provides an overview of revenue management for the hotel industry. It begins with defining revenue management as selling the right product to the right customer at the right time for the right price. It then provides examples of how revenue management is used in industries like hotels, airlines, and entertainment. The document outlines the basic steps for how to implement revenue management, which includes understanding customers, forecasting demand, researching competition, distributing inventory, monitoring demand, and adjusting rates. It concludes by recommending starting in a front desk or reservations role and working your way into a revenue manager position over time.

1. Revenue Management International Air and Hospitality Academy September 29, 2010

3. Define Revenue Management

4. Revenue Management Examples

5. How To Use Revenue Management

6. Recommended Career Pathagenda

7. Introduction

8. Daniel Wise, CHRM Professionally Front Desk Clerk – Econolodge, Flagstaff, AZ Assistant GM – Days Inn Flagstaff, AZ Analyst - Cendant Corp (now Wyndham), Phoenix, AZ Reservation Manager – Fiesta Inn Resort, Tempe, AZ Revenue Manager – Best Western International, Phoenix, AZ Regional Revenue Manager – Extended Stay Hotels, Portland, OR Property Revenue Manager – Best Western International, Portland, OR Owner – Cascade Revenue Management, Portland, OR Academically B.S. Business Management – Arizona State University, Tempe, AZ M.B.A. University of Oregon, Portland, OR.In progress

9. Conduct weekly RM meetings Benchmark hotel against competition Manage rates and inventory Forecast and monitor demand Nurture relationships with distribution partners Assist in strategy development Cascade Revenue Management

10. What is revenue management?

11. Defining revenue management From the literature "Revenue management is the art and science of predicting real-time customer demand at the micro market level and optimizing the price and availability of products.“ -Robert G. Cross In practice Selling the right product To the right person At the right time For the right price

12. Fixed amount of a product Product is perishable Consumers willing to pay different prices Conditions necessary to implement revenue management

13. Airline Hotels Sports Teams Theatres Hair Salon Restaurants Casinos Revenue management examples

14. Key metricsHotel industry 100 rooms on property 76 sold $11,000 room revenue $4,000 restaurant $300 movie rentals 11,00076=$144.74 𝐴𝐷𝑅=𝑅𝑜𝑜𝑚 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑅𝑜𝑜𝑚𝑠 𝑆𝑜𝑙𝑑 Occupancy = 𝑅𝑜𝑜𝑚𝑠 𝑆𝑜𝑙𝑑𝑇𝑜𝑡𝑎𝑙 𝑅𝑜𝑜𝑚𝑠 RevPAR = 𝑅𝑜𝑜𝑚 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑇𝑜𝑡𝑎𝑙 𝑅𝑜𝑜𝑚𝑠 Total RevPAR = 𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑇𝑜𝑡𝑎𝑙 𝑅𝑜𝑜𝑚𝑠 76100=76% 11,000100=$110.00 15,300100=$153.00

15. How to use revenue management?

16. Understand your customers Forecast demand Research competition Distribute your product Monitor demand Adjust The basics

17. Understand your customersaka “Segmentation” Types Family Single Couples Price sensitivity High “Bargain shoppers” Low “Willing to pay more to get exactly what they want” Typical booking path Call direct Internet Travel agent Categories Leisure AAA Business Group Stay Patterns Weekday Weekend

18. Use the knowledge – identify what’s important to the customer Single business traveler Distance to their work site Weekday business Book direct or with an agent Low price sensitivity Prefers larger king beds Quality high speed internet Restaurant/bar on-site or nearby Family on vacation Distance from attractions Weekend business Books online (OTA’s or brand.com) High price sensitivity Needs two beds Free breakfast Swimming pool

19. Forecast Peak/Busy dates by customer and room type BT BT BT BT FAM FAM

20. Benchmark Tour their site Compare online information Collect Intelligence Shop their rates Subscribe to Smith Travel Research Consider other report tools Maintain a friendly yet competitive relationship Avoid complacency Research competition

21. Voice Central Reservations Front Desk Travel Agents Internet Brand.com OTA’s (Retail) OTA’s (Opaque) GDS Distribution

22. Pricing decisions Peak/Busy dates by customer and room type Possible pricing based on forecasted demand

23. Monitor Demand The CRM Tool

24. RM Cycle

25. A mix of sales and operations is very helpful Begin at the front desk Aim for FDM or Reservation Manager If it does not exist you can “evolve” into a Revenue Manager Be flexible, patient and open minded Career path

26. Discussion & Questions Daniel Wise 503-719-6975 office info@cascaderms.com