Saute, Steam & Sizzle Your Way to Better Revenue Performance

To make a meal guaranteed to impress, you must carefully create all of its components simultaneously. Miscalculate and you may have to pair that perfectly-grilled filet mignon with cold, mushy vegetables and a bitter dessert. Results like that could diminish the ultimate goal of preparing an utterly amazing meal.

Why does this matter to hoteliers? Cooking an upscale meal has many parallels to total revenue performance (TRP), the holistic approach to revenue management that aligns all income streams with overall business goals.

In the past, each revenue stream in a hotel functioned and was evaluated independently. Room revenue was analyzed separately from meeting spaces, restaurants, spas, golf amenities and other guest experiences. Today, however, more attention is being paid to the big picture, and experts agree that the best way to ensure high long-term profitability is to consider all aspects of a guest’s visit.

Simply put, we’re moving beyond the main dish to look at the whole meal.

In the past, technological limitations, high costs and data complexity have been barriers to TRP. Fortunately, a new era is eliminating half-baked decision making. Sophisticated analytics technology can now transform large, disparate data into actionable intelligence, which is used for making accurate forecasts and strategic pricing decisions.

Remember, any pricing decision made within one hotel function produces a ripple that can directly affect the business performance of all other functions. TRP integrates forecasting across services to reach an ideal mix of sales and profit so hotels can target the highest-quality revenue at any given time.

Taking an integrated TRP approach often produces a cultural shift within organizations. Departments that used to function separately become connected intimately. Their success isn’t evaluated independently, but as a component of the whole.

That means some business decisions can appear counter-intuitive — even unprofitable. For example, a hotel manager would be delighted to book all rooms at the highest room rate during in-demand periods. This, however, is short-sighted and limits forecasting potential.

TRP digs deeper. What about guests who want to book at a lower room rate but intend to reserve a conference room and catering? TRP’s big-picture view helps avoid tunnel vision, moving previously undetected opportunities front and center for proactive hoteliers to seize.

So ready your knife and raise your glass — it’s time to dig in.

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