Looking at seasonal business strategies from the perspective of hotel revenue management

The hotel is an industry whose life is to provide services, so the most essential form of its product evolution is service. All products have a certain timeliness, and hotel service products are no exception. Below, I will present the timeliness of hotel products to everyone in text. I hope it will be a reference for everyone when running a hotel!

The most direct reflection of the hotel's timeliness is the hotel's off-peak and peak seasons. The business strategies at each stage must be different, which requires us to adopt necessary peak season business strategies when the peak season comes to increase the hotel's profitability. And what strategies should we adopt during the off-season that are different from those during the peak season? Here we can explain two factors that affect hotel profitability:

Occupancy rate and average room price:

In the off-peak and peak seasons, the occupancy rate is an important controllable variable factor, but it cannot be said to be an important criterion for measuring the quality of a hotel's business. When the occupancy rate is good, the hotel's business will naturally be very good. This sentence seems to be a true proposition to people who do not know the industry, but those who have actually worked in hotels will know that the occupancy rate only reflects one aspect of hotel management. I will give you a formula and everyone will understand:

Occupancy rate * average room price = yield (actual occupancy/total number of rooms = occupancy rate, total room revenue/total number of rooms = average room price)

Many times we will use this formula to reflect the revenue management of a hotel. The revenue management of a hotel is the "five best"; that is, the hotel's products can be delivered through the best products at the best time and at the best price. Channels to sell to the most suitable customers to maximize hotel revenue.

Let’s analyze and summarize these two variables:

During the peak season, we naturally don’t worry about the occupancy rate, but the peak season means that our rate of return must be Improved. Blindly increasing the occupancy rate is not a smart approach, because the floor area ratio of the hotel will have a certain limit, and the range of the floor area ratio is there. No matter how much you want to increase the occupancy rate, it is unlikely to achieve breakthrough progress (the floor area ratio is the highest). To put it simply, it is the largest passenger flow on the day). I think the occupancy rate of a hotel during peak seasons should be limited to a certain range. If it exceeds the warning value, our room control should pay enough attention, otherwise it will cause a lot of unnecessary trouble and even direct economic losses. The most important thing for a hotel during the peak season is to maintain long-term stability within the warning value range. The most important thing to focus on should be our average room price. On the whole, although the mathematical relationship shows that the occupancy rate and the average house price are inversely proportional, if we can maintain a reasonable occupancy rate during the peak season and then strive to increase the average house price, it will be beneficial to our profitability. It will be of great help. What aspects of the average room price should be our most specific consideration? How to increase the average room price? I will summarize it from the following aspects:

1. First, we need to analyze the guests of our hotel. source structure. Among the hotel's customer source structure, we must make targeted choices based on the interests of the entire hotel. Which ones can be priced higher during peak seasons and which ones cannot be adjusted. For example, the room rate for conference and travel groups is lower, and we can increase it appropriately. The specific amount of increase depends on the actual situation of each hotel. If you analyze the hotel's individual guests, hotel member guests, hotel contract guests, etc. carefully, we will find that there is a lot of room for price increase. If you are worried that the price increase will cause a certain loss of customers, don't worry. , this is the best time for us to optimize the customer source structure, classify some customers with lower housing prices, and notify them of price adjustments based on their contribution and decide whether to stay or leave this customer source.

2. In the process of price adjustment, we must do some appropriate publicity and promotion to assist the increase in house prices, leaving customers with a psychological buffer and transition, so that the psychological gap between customers should not be too large, and customers can be more confident about the price. Your product continues to hold a promise. For example, for member prices that have been raised, we can carry out some preferential activities on the official website, such as electronic coupons, booking attraction tickets, train tickets and other value-added services, so that the customer's attention can be shifted to the services she can enjoy. From the above, if the price is increased, the customer will not have the idea of ????not wanting to spend money next time.

Specific revenue management can also be considered from the following aspects:

1. Segment the market and customers and conduct demand forecasts

The rationale behind revenue management The concept is to effectively manage revenue and inventory through pricing differentiation, and it is based on the demand elasticity of the selected market segments." Each hotel has its own market positioning, but the classification of customers, source channels and consumption There are still many differences in characteristics. The consumption needs, prices and consumption characteristics of different categories of guests are also very different, so their consumption behavior patterns are also different, which can be controlled by the hotel through scientific segmentation of the market and guests. Resources, increase revenue and provide accurate information sources. Based on market segmentation and guest information, we can make relatively accurate predictions of different types of guest needs, and adopt different pre-sale methods and price differentiation controls to implement them. Dynamic management and marginal revenue management can minimize the risk of resource use. If the risk of resource use can be minimized, the hotel's revenue expectations can be optimistic.

2. Control the door well. The occupancy ratio of front-end individual guests

The average room price and average occupancy rate are two major factors that affect hotel room revenue, and the rental income of front-end individual guests has a significant impact on the hotel's average room rate. Only by appropriately controlling the occupancy ratios of contract guests and front-door individual guests can the hotel's maximum average room rate be achieved. In hotels, generally the room rate for contract guests is lower than the room rate for front-door guests, and contract guests are usually negotiated by the marketing department. Due to the stimulation of market competition and the increased attention and work pressure from hotel management authorities on the marketing department, the marketing department will continue to do everything possible to expand the coverage of contracted guests and use this as the department's work performance. If the hotel's average room rate is to be kept at a maximum, the hotel authorities need to coordinate and conduct analysis based on market conditions and the historical data of marketing and front office rental income. Only by clearing the appropriate front office FIT occupancy ratio can the hotel management authorities pay sufficient attention to this issue when implementing front office revenue management.

3 , Dynamic price setting

Price is the most sensitive consumption factor for customers, the most direct management lever for sales, and the main means for hotel profits to increase or decrease in the current market situation of oversupply and fierce competition. Nowadays, almost all hotels have developed price management from a single static price to multiple prices. The dynamic prices include market-competitive individual guest preferential prices, travel group room rates, conference group room rates, and long-stay room rates. Individual guest floating prices, etc. For hotels, the most valuable reference data when formulating dynamic prices is the classified room rates of competitor hotels in the same area.

4. Overbooking control.

Since there is a certain difference between pre-sales and actual occupancy, hotels usually implement a certain proportion of overbooking to reduce losses when there is a difference between pre-sales and actual occupancy. The appropriate proportion of overbooking depends on the collaboration between the front office and the marketing department and the analysis of historical data to determine a basically reasonable probability.

Work in this area can start from several aspects:

Check the reservation. Some guests reserve rooms long in advance. During the period before check-in, some guests will be unable to arrive soon or cancel their trip due to various reasons, but not all guests will proactively notify the hotel. The front office department must conduct multiple checks with guests by phone before arrival, make adjustments quickly if changes occur, and notify relevant departments to rebook or sell the room to other guests.

Add guaranteed bookings. Collect a deposit in advance or require a credit card guarantee to reasonably transfer the risk to the guest, especially during peak hotel business periods such as holidays and major local economic and trade events.

Strengthen coordination with the marketing department. Since most reservations are generated by the contract units of the marketing department, and in order to expand their own performance, marketers in the marketing department generally relax their requirements to the contract units. Therefore, it is necessary to strengthen communication with the marketing department when overbooking occurs. Control overbooking to reduce hotel losses.

The general formula for the number of overbooked rooms is as follows:

The number of overbooked rooms = the number of temporarily canceled rooms + the estimated number of guest rooms that were booked but did not arrive + the estimated number of early check-outs - the estimated number Number of rooms with delayed check-out.

Each factor in the above formula has the word "estimated". To solve this problem, it is not easy to be as accurate as possible. This depends on historical data (business figures for each business period) Accumulate and analyze, and strengthen communication between the front office and the marketing department to determine a generally appropriate ratio.

5. Price demand control during holidays and major events

Holidays and major market events are often the best time for hotels to make profits. How to use this period to obtain maximum revenue is the time when hotel management and front office departments can best utilize the revenue management system. The management motto during this period should be "take action when it's time to take action" and raise prices when it's time to raise prices without thinking too much about other subsequent impacts. Otherwise, time will not wait for me, and the opportunity will never come again. In a market where "demand exceeds supply" for a short period of time, the most basic consumer psychology is "demand" rather than "supply."

6. Management of group sales and sales agents

For group sales such as travel agency tour group prices, the price should be based on market changes at each stage, mainly the total consumption of the travel agency Adjust and control the hotel's average occupancy rate, the rise and fall of the average room price, and the economic prosperity index of the local market in a timely manner. For sales agents such as online booking center agents, they can analyze the market situation once a year and then readjust the price for the new period.

7. Make full use of the resources of online booking and booking centers

The emergence and development of online booking and booking centers is an inevitable and progressive step towards economic marketization, as well as economic marketization. A result of industry segmentation. Today, Ctrip and eLong, the two major domestic online booking companies, occupy more than 80% of the market share of online booking business. They have established a firm market position by introducing strategic investors through capital operations and listing their stocks. The emergence of these online room booking "middlemen" is a low-cost, high-yield resource available for individual hotels or hotel group member hotels, which has a negative impact on the hotel's original marketing methods. It is a useful supplement. These online booking companies have at least brought together the booking networks of thousands of hotels. On the one hand, they provide customers with a greater choice space and are close to the customers' psychological needs. On the other hand, they are self-organized reservations by individual hotels or hotel groups. The scale of the network is incomparable. Even the largest hotel group in the country only manages a hundred or so hotels. We don’t need to mind that the existence and development of online “booking middlemen” will take away part of the hotel’s profits. There is no free lunch in the world. If you gain something, you will lose something. We should adopt an attitude of "everyone does what he can, each takes what he needs" and encourage member hotels to cooperate with them to achieve mutual prosperity and development together.

According to a recent report written by Bill Carlton of the Hotel Industry Research Center of the Cornell School of Hotel Administration in the United States, more than 20% of customers will make reservations online in the next few years. . This proportion was 8.34% in 2002. In the operating reports of Oriental Crown member hotels, we can find that for quite a few hotels, the booking volume through Ctrip, Elong and other booking centers has reached about 10%--11%. Therefore, for hotels, whether they are independent hotels or group company member hotels, we should make full use of the resources of these online booking agents to increase the hotel's profitability.

8. Hotel ancillary resource management

The hotel’s ancillary resources mainly refer to catering, entertainment facilities and conference facilities other than guest rooms. These ancillary resources are also a good product resource for front office sales. When implementing revenue management, the front office should invite front office employees to familiarize themselves with the hotel's attached resources, sales price policies and price details, and provide marketing training to the front office employees to master marketing skills so that they can develop these resources in a targeted manner. Sale.

9. Comparison and analysis of operating conditions

The front office department should compile various operating data every month, including occupancy rate, various types of rooms, customer segmentation, and various ancillary facilities. The resource sales situation is compared with historical data. The most important thing is to conduct comparative analysis with the previous year's data, and then conduct detailed analysis based on the data of competitor hotels in the same category on the market.

Use these valuable marketing data as the front office's decision-making basis for formulating room rate policies for each period, and report to hotel management.

10. Revenue management combined with customer value

The value of different customers is different. Sometimes the value of a customer cannot be simply defined by a profit index. For example, in hotels in second-tier cities, there are relatively few foreign guests. At this time, if the hotel knows how to attract more foreign guests to stay at more favorable prices, even if the stay price of these foreign guests is lower than that of domestic guests, the hotel they bring will Comprehensive value, such as the feeling of courtesy and etiquette, familiarity and reference to the consumption habits of foreign guests, the spread of consumption concepts and humanistic sentiments, including changes in the atmosphere of foreign language practice in the hotel, etc., will all have a good comprehensive effect. ;