Do you have a CULTURE of Revenue Management?

Culture gets developed over time, with repetition.  And Company Culture is no different.  Every company has a fairly unique culture, comprised of people, language, processes and styles.  Revenue Management is a pretty analytical process, but companies do it slightly differently and with different people.  

So, when it comes to Revenue Management in Boutique Hotels, each property will have their own unique:

  • People
  • Process and
  • Technology

Many hotels make the mistake of focusing on the tools and technology first.  Although it should be an iterative process that takes all three aspects into account, it is often better to start off with People and Process, before looking at highly automated tools and technology.  As many of you already know, automating a bad process can produce poor results.  In fact, many of the leading RM Software companies will say that a "culture" of Revenue Management is important for hotels to get the most out of their software.  

If you already know how to do Revenue Management and fully understand the process, then it's kind of a different story.  You can implement processes that you learned somewhere else and then just make adjustments for the People and Technology that you have in place at a new property.  But the reality for many Boutique Hotels and Independents, is that they are implementing Revenue Management for the first time.  In many cases, it's just one person doing this process in Excel, but it still helps to have a guide.

Very few Boutique hotels are big enough to have an experienced Revenue Manager that is dedicated to this task full time.  If you do have an experienced, full-time Revenue Manager, then this becomes easier and quicker and that one person just does all the Revenue Management.  But smaller hotels usually don't have sufficient revenue for this.  Plus, once it is implemented and there is a regular rhythm, it may only require a few hours per week, so a full time employee may be too much.

For many smaller hotels, it makes sense to start with simpler, more manual processes.  This way everyone involved in the process can understand:

  • Where the data comes from
  • How decisions are made about future rates
  • How rate changes are implemented

Revenue Management is a cyclical process that gets repeated every week (or whatever frequency you do it).  You import fresh data, decide which rates need to go up or down, and then implement those changes.  The next week, when you import fresh data, you get to see how you have been doing, so that you make new decisions.  As the cycle goes on and on, you get better and better at pulling in data, interpreting the changes, and then making new, better decisions each time.

I would not say practice makes perfect, but it is a cycle of continuous improvement and practice definitely produces better and better results.  Once this process has been in place for a few cycles, then the key people end up with a detailed understanding of how this process affects their specific property and begin to fully see the potential benefits.  That's when it gets ingrained as culture and the way of doing business at your property. 

To learn more about this process, check out the Revenue Management Mini-Course at this link:  CLICK HERE.  This includes several hours of recorded video that will get you on the right track, plus downloadable spreadsheets that you can keep and use in your business.





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