I have been working in Revenue Management for few years now and the funniest or most painful (subtle line divides the two :)) moments I share with my colleagues and teammates are always related to what we call \u201cMyths\u201d or \u201cThe recurring questions\u201d.\u00a0<\/span><\/span><\/p>\n Our discipline is quite complex and it has been evolving fast; I have had the privilege of living through the changes that the role of the Director of Revenue\/Revenue Manager has gone through over the past decade\u2026 the transformation has been huge!<\/span><\/p>\n \u00a0Funny enough, as it always happen, some things will never change!<\/span><\/p>\n \u00a0Let\u2019s get through some of the situations we face in our job, I am pretty sure that some people will be familiar to many of them!<\/span><\/p>\n How did we not consider that before?! \ud83d\ude09 Jokes aside, besides the fact that \u201cwe\u201d nasty Directors of Revenue\/Revenue Managers are by definition huge fans of discounting does not work; that it is a very wrong approach. Rate is the tip of the iceberg and there is a whole world besides pricing that plays a big role in revenue optimization: demand, competition, booking pattern, business mix, channel, distribution, length of stay just to name a few\u2026\u00a0<\/span><\/p>\n Please get rid of these old school beliefs! As it is sure that when the market is compressed it is your role to maximize revenues and get the most out of it, do not forget that you are not alone out there! Keep one close eye to the competition and to what the market has to offer at that moment in time. Do not look only at the rates published but also at the additional services and room types offered by the competitive set.\u00a0 Customers shop around and may choose to book elsewhere thus leaving empty rooms to your hotel at the end of the day if you don\u2019t stay competitive\u2026\u00a0<\/span><\/p>\n Of course we can! Volumes <> RevPAR <> TRevPAR (Total RevPAR). You may fill up easily your property but if you are not going anywhere on the Total RevPAR generation at the end of the day, you just displaced revenue and missed on market share.<\/span><\/p>\n I personally think that LOS restrictions are used and abused by Hoteliers. The reason is that we tend to focus on what we expect to get rather than understanding how are we getting there. Understand your booking pattern and demand, check your competition and make sure you are not restricting too heavily thus missing opportunities.<\/span><\/p>\n Sure you can as long as you calculate oversell and you end up with a full house. Predict the risks linked to that, the possible cost of relocation vs revenue opportunity.\u00a0 Besides, remember that overbooking may not necessarily mean physically booking out a guest. If you anticipate your cancellations, you may oversell the Hotel in advance to get to a full house on the arrival day without the need of any relocation. Cancellations are unfortunately always part of the game.<\/span><\/p>\n Did you? Always check your compset performance before celebrating J that is the only way of knowing if you really captured and optimized all revenue opportunities that were in the market.<\/span><\/p>\n That\u2019s not what our job is only and all about! We are in our role to optimize revenues, that means for instance making out the most of our 90% occupancy to get top RevPAR instead of getting an average performance just to get to 100% occupancy!<\/span><\/p>\n \u00a0Last but not least, my favorite one in regards to demand forecasting:<\/span><\/p>\n \u201cDo you have a crystal ball?\u201d<\/em><\/span><\/p>\n I wish I had it, would make my job way easier!!<\/span><\/p>\n [Originally posted on Linkedin, May 31st, 2016]<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Debunking the myths about Revenue Optimisation Recurring questions and myths I have been working in Revenue Management for few years now and the funniest or most painful (subtle line divides the two :)) moments I share with my colleagues and teammates are always related to what we call \u201cMyths\u201d or \u201cThe recurring questions\u201d.\u00a0 Our discipline…<\/p>\n","protected":false},"author":2,"featured_media":2311,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[248],"tags":[238,239],"class_list":["post-2225","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-revenue-management-en","tag-hotelrevenue-en-2","tag-revenuemanagement-en-2","category-248","description-off"],"yoast_head":"\n\n
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