Revenue Management is an amazing discipline: dynamic, ever-changing and evolving, cross functional and anything but boring or about crunching numbers only! There are plenty of moments of gratification in the job, but there are also moments when the Revenue Manager has to deal with annoying situations<\/em>.<\/p>\n Here are 5 pain points that every Revenue Manager frequently goes through, and some suggestions on how to analyse them from different angles, to soften the pain:<\/p>\n <\/p>\n 1.Negotiate the corporate rates increase<\/em><\/strong><\/p>\n To negotiate the corporate rates for the following year, it is general common practice to look at the past 12 months of production and analyse each Company\u2019s performance in terms of roomnights and rooms revenue generated. By comparing the performances, Revenue Managers understand where each company production\u2019s fits in their rate grid and negotiate the new rate accordingly. As easy and logic as it may seem from the revenue standpoint, it is not as easily accepted by the Companies that see only the pros of bringing business to your Hotel, considering that there could probably be another competitor Hotel to eventually move their business to<\/em>. Looking at roomnights and rooms revenue alone is not enough, neither for the Hotel to make good choices, nor for the Company to accept a price increase based on a unilateral rule.<\/p>\n Taking a step further, the following factors should be considered before committing to any negotiatied rate variation:<\/p>\n By considering all the above factors, Revenue Managers will be able to make more conscious decisions by looking at the big picture<\/em>, thus providing arguments and facts to bring the negotiation process to another level.<\/p>\n <\/p>\n 2. Close out wholesale allotments\/availability<\/em><\/strong><\/p>\n When working with traditional Tour Operators with static rates, to optimise rate and inventory over dates of compression, Revenue Managers are used to close out their allotments or availability to sell<\/em>.\u00a0These decisions are based on the forecasted demand: it is part of the revenue optimisation process but Tour Operators obviously complain about the lack of availability to sell. The result is that the relationship with these partners can become easily jeopardized<\/em>. This topic is also a trigger point between Revenue Managers and Sales, that see opportunities and risks from different angles.<\/p>\n To simplify the process and avoid making decisions based on the forecasted occupancy and rate only, the same factors that were listed in point 1)\u00a0Increase corporate rates<\/em> should apply, but with some additional factors due to the leisure nature of the segment:<\/p>\n Leveraging all possibilities in demand shift or inventory optimisation, will result in a business mix more evenly distributed and reduction of close outs.<\/p>\n <\/p>\n 3. Parity rate yes or no or when?<\/em><\/strong><\/p>\n When it comes to parity rates with OTAs, every Revenue Manager has an opinion. Leveraging on the price disparity with OTAs is probably the easiest and cheapest ways to gain a competitive advantage<\/em> for small-medium independent Hotels with low Budgets for direct bookings investments. I generally recommend the following:<\/p>\n <\/p>\n 4. Overbooking, when is it the right time to start worrying?<\/em><\/strong><\/p>\n You can setup rules to calculate overbooking or trust in your RMS forecast oversell limits to close the day with a perfect sold out property. However, it always comes a day (or days) where the negative inventory does not show any signs of decreasing<\/em>. Time approaches and Revenue managers start getting a bit uncomfortable about overbooking and not even the forecasting algorithm – that may have changed in the worst case scenario – is encouraging. When overbooking is tough like this, when is it time to seriously consider guest relocations? Facts to consider before panicking:<\/p>\n Handling overbooking is never easy, but factoring the different elements just mentioned will help calculating the potential bookout from the different angles and manage potential relocations in a timely manner.<\/p>\n <\/p>\n 5. Disparity issues and onward distribution<\/em><\/strong><\/p>\n Customers are well educated and one of the worst moments in the booking process is having the guest complain about your brand.com rate not being exactly the best available one, compared to that \u201cneverheardbeforesite.com<\/em>\u201d. It is a common and widespread issue, probably the most annoying to deal with in the current distribution scenario. The jungle of intermediaries is potentially endless, however to deal with this there are two ways; they won\u2019t probably solve the problems long term but at least short term you will take a breath.<\/p>\n In both cases though, the fake reservation is the best way to proceed to be 100% sure of the offender and provide a concrete proof of it.<\/p>\n","protected":false},"excerpt":{"rendered":" And how to make them sweeter Revenue Management is an amazing discipline: dynamic, ever-changing and evolving, cross functional and anything but boring or about crunching numbers only! There are plenty of moments of gratification in the job, but there are also moments when the Revenue Manager has to deal with annoying situations. Here are 5…<\/p>\n","protected":false},"author":2,"featured_media":583,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[248],"tags":[327,295,299,328,329,239,240,330],"class_list":["post-582","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-revenue-management-en","tag-corporaterates-en","tag-hotelmanagement-en","tag-otas-en","tag-overbooking-en","tag-parityrate-en","tag-revenuemanagement-en-2","tag-revenuemanager-en-2","tag-wholesalerates-en","category-248","description-off"],"yoast_head":"\n\n
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