The jump-throw is a beautiful baseball maneuver. One that has found a place on many highlight reels over time. However, the challenge with a jump-throw is that you can practice it all you want, but it will never be reliable without first perfecting the fundamentals. A jump-throw is a culmination of a number of advanced skills, and if a single one of those skills were not perfected, the jump-throw wouldn’t be successful.
So, what does this have to do with revenue management? There are a lot of “jump-throws” of revenue management out there which are capturing the attention of hotel professionals. Total revenue management is one, perfectly manipulating channel mix to manage revenue with a focus on profitability is another. These are all important, and perfecting any one is going to take a revenue manager from good to great.
The discipline of revenue management has grown so large so quickly, it becomes easy to lose sight of the fundamentals: the core tenants of revenue management that should be focused on and practiced daily.
If you’re saying to yourself “I have all the fundamentals covered, I don’t need to worry about it.” I’ll remind you that even in a season during which Derek Jeter was awarded a gold glove for being the best fielding shortstop in the American league, he made 18 errors. There’s always room for improvement, and in revenue management, improvement means more money.
As you round out this year, take a look at some of these pillars of revenue management, and look for ways you can improve in 2017.
- Do you have a robust demand forecast that allows you to anticipate demand far enough out?
- Understanding where your peaks and valleys are and length of stay patterns to drive revenue growth.
- How many days were you above 95% occupancy, but didn’t sell out?
- If you had demand to fill 95% of your rooms, you probably had enough to sell all of them. So, what happened? Make sure you are constantly updating your cancellation and no-show ratios to allow for an effective overbooking strategy.
- Are you putting controls in place that allow for higher value reservations in order to take full advantage of peak demand?
- Selling out on a busy night is easy. Selling out on a busy night while maximizing shoulder night performance is hard. Accounting for demand by segment and length of stay will allow you to protect your shoulder nights, and accept reservations with the most overall value.
- Have changes in the market affected your position?
- New supply and renovations are hitting most markets, and it won’t be news to you that this could affect a hotel’s position. What can be more difficult is to make an honest assessment about how your position may have changed in order to move from the status quo.
This is just a sample of the fundamentals, but simply focusing on the points above can drive extra dollars in ADR, RevPAR and profit. As you look to make your New Year’s resolutions, I would suggest that if you’re working on your “jump-throw” for 2017, don’t forget the fundamentals.