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Spotlight on Revenue Management for Small & Independent Hotels

Sameer MehraRegional VP – Revenue & Distribution

Highgate Hotels

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Highgate Hotels

OURSTRATEGY (Acquire hote l asse ts in key marke ts , NYC SFO&LAS) and dramatica lly improve

:profitability through1) Revenue &Dis tribution 2) Cost Control

• Investors - formed in 1986 with properties in US, Canada and Europe

• Owners – over $5 Billion Assets• Managers – 15,000 keys in management

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Spotlight on Revenue Management for Small & Independent Hotels

1) Unique challenges?2) Reservations managers as potential revenue

managers? 3) Suitable Revenue Management technology?4) Build guest loyalty with a rational pricing

strategy? 5) Increase revenues when you've got high

occupancy rates?

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1. What are the unique challenges posed by small and independent hotels?

B. Absence of Brand Namea) Weaker Distribution Networkb) Inability to position the property globallyc) No Loyalty Program

C. Challenge to promote own Website & capture market share

D. High dependency on OTA’s

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Focus on strengthening presence on GDS

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Promotional Message tag line attached to air & hotel availability displays. The one line messagedirected to Travel Agents guides them to promo-spot text screen for details about your property

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Take care of sort order on GDS screens

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Graphical badge ad with a click through screen functionality

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Expose the property globally

• Join hands & develop relationship with key suppliers to market your property and generate demand– Tour Operators has strong presence in

specific markets

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OTA

Small & Indy Hotel

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Alternate to Loyalty Program

• Attract customers through incentives as a substitute of points…(Cash Back!!!)

• Unique experience and not cookie cutter brand experience

• Capture e-mail through all sources on guest booking and inter-actions – e-mail marketing

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Website Awareness to Capture Market Share

• Design and Develop a High-Conversion Website

• Maximize Free Traffic from Search Engines• Protect Your Brand Name

• Capture New Demand in Paid Search

• Partner Strategically with Other Websites

• Keep Consumers Engaged Via E-mail

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Step A : Develop a High- Conversion Website

Prominent Promotional Section

Large Image Space

Easy To Use Navigation

Strong Calls to Action

The design should be image- rich and fit the style of your hotel

Prominent calls to action are imperative - reservation links, special offers and short-time promotions should be highlighted

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Step B : Maximize Free Traffic

70-80% of online travel searches are brand-agnostic terms

Organic search takes 3- 9 months to start to see placement, but it is free traffic for the life of your placements

Select the most relevant, highly searched terms for your website

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Step B Cont… : Maximize Free Traffic- Local SEO

Local SEO is now part of all standard search results

Opportunity to own additional real estate on major search engines

Information to directories - Google, Yahoo!, and Bing as well as a variety of Internet Yellow Page and directory sites

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Step C : Protect Your Brand Name

Third Parties will bid on your brand name in paid search - independent hotels must spend aggressively in this arena to protect against channel cannibalization

Ad copy should convey a best rate guarantee & compelling offers to keep loyal guests off of 3rd party sites

Monitor your reviews on user-generated content sites and respond frequently to mitigate any negative feedback

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Step D : Capture New Demand in Paid Search

Complement Organic Search by offering timely special offers rate specials to attract demand

Track all activity so that money is only spent on campaigns that work and the best converting offers become most often promoted

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Step E: Partner Strategically With Local & National Travel Sites

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Partner with websites that attract your target traveler to drive traffic directly back to your website

Partner with local, national and regional travel sites

Partner with demand drivers like attractions, universities and partnerships

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Step F: Keep Users Engaged With E-Mail

Once a traveler has visited your website or stayed at your property, the best way to keep them engaged with your website is via e-mail marketing

Tailored offers by segmenting your guests

Respect subscribers by staying within CAN-SPAM laws and only reaching out with compelling offers to avoid high “unsubscribe” rates

Keep e-mail design and tone consistent with website and other marketing materials

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OTA’s can benefit you

• They are 800 pound gorillas– Take advantage of their merchandising power – BILLBOARD effect to reduce your cost of doing business

(helps ADR and marketing)– Sort order placement– Rate parity with you own website to increase ADR

48 hrs Sale on OTA’s & Website(Book now for $99)

OTA’s 1000 RNTS @ $75

Website 2000 RNTS @ $99

Hotel 3000 RNTS @ $91

Generated business& reduced cost by16%

Increased RevPAR Index by 15% for that month

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2. Should you look to reservations managers as potential revenue managers?

• Why?– Very knowledgeable with systems and product– Familiarization with source of business could be very helpful in

managing the distribution network for profitability– May have ample ideas

• What you should look for?– Experience– Skill sets (education, analytical skills and computer knowledge)– Aptitude– Change management skills and open to ideas– Social inter-action skills with excellent communication to

interact across all management levels and suppliers– Strong negotiation skills– Above all…Go Getter!!!

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But be sure he/she…

• Steps out of Reservations mode

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3. What revenue management technology is suitable and affordable for your business?

Typically the software’s available off the shelf are expensive, too elaborate in data collection and complicated to work with

What we should look for?• Easy• Simple upload• Quick snap shots & reports• Generate trends• Easy to extract output• Not expensive

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Date comparison with past data

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DOW Trend

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4. How can small and independent hotels build guest loyalty with a rational pricing strategy?

• Rate parity• Offer options at different price points• Travel agent incentives• Reward and appreciation of repeat guest • Monitor guest reviews and respond frequently • Clearly communicating the price in booking

process • Ease of booking

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Instant display of rebate

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5. How do you increase revenues when you've got high occupancy rates?

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• Premiums on room types • Distribution network management for

higher ADR’s• Control contracted rates• Displacement analysis for bulk business• Prevent over-booking of lower room types

and promote higher room types• Promote upsell at booking time and at

arrival

5…contd… How do you increase revenues when you've got high occupancy rates?

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Snap Shot

• Partnering with key suppliers• Strengthen your distribution network • Participate in OTA’s• Build loyalty through unique guest experience • 100% focus of driving market share through your

own website• Invest in a dedicated Revenue Manager• Invest in a suitable software to help the

Revenue Manager

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Thanx

Sameer MehraRegional VP – Revenue & Distribution

Highgate Hotels