IN-DEPTH: Interview with Bonnie Spalding, VP Business Consulting for The Rainmaker Group

Published: 10 Mar 2011

IN-DEPTH: Interview with Bonnie Spalding, VP Business Consulting for The Rainmaker Group

By Ritesh Gupta

Revenue management practitioners are becoming more and more sophisticated, and this plays a critical role in the progress of the practice.

The first step in elevating an organisation’s ability to forecast and optimise incoming demand is finding or nurturing talented revenue managers and analysts.

From a technology solution provider’s perspective, The Rainmaker Group’s VP Business Consulting Bonnie Spalding says the better the revenue managers, the more they are capable of presenting value to their properties from the analytics tools available to them.

In the gaming and casino sector, The Rainmaker Group points out that the top areas of focus among the casino hotels is to:

• Accurately forecast guest value to all areas of a casino enterprise
• Leverage cyclical patterns to optimise revenue and profitability
• Maximise the value of demand during peak travel times

For its part, The Rainmaker Group helps casino hotels increase profitability through the accurate, instantaneous ability to determine the minimum acceptable value of each guest.

Spalding will be moderating the ‘Cutting-Edge Gaming RM Strategies’ at the forthcoming Travel Distribution Summit Asia 2011, to be held in Singapore (May 18-19, 2011). He spoke to EyeforTravel’s Ritesh Gupta about the latest trends. Excerpts:

Can you provide an insight into initiatives being taken by the industry to maximise profits by accurately forecasting demand by segment, and setting price and availability restrictions to ensure access for the most valuable customers?

Bonnie Spalding:

What you have asked about is at the core of what The Rainmaker Group does - we recognise that not all guests bring the same level of value to the table - especially in gaming and resort environments. Our clients benefit from our software's ability to discretely forecast demand and revenue by segment. Then our optimisation process ensures that guests are valued not based on what channel they have booked through, but considering their potential profitability. Therefore our clients receive the benefit of this level of forecasting and optimisation every day, for the future horizon, with no offline analysis.

One of the challenges with implementing optimal pricing in Asian markets is the relationships with wholesale operators. The ability to be dynamic with rates and restrictions is more limited when wholesale partners cannot accept frequent rate updates. Junket business presents a similar challenge in the Macau market. Strategically breaking down these channels into sub-segments can mitigate this and drive more profit from these channels.

Which according to you is the best way to go about accurate forecasting of future room demand? How can one forecast guest value based on multiple revenue streams across the casino enterprise?

Bonnie Spalding:

First, there is no such thing is a perfect forecast. With the number of demand streams each operator faces, forecasting methods need to be tailored to them. For example, a casino with significant promotional demand cannot use the same demand forecasting technique that used for transient guests. Similarly, in the case of special events, the forecasting methods need to be significantly different. We believe that each demand stream should be forecasted independently and then optimised together in order to yield the best results for the property.

Considering the Total Customer Value Rate Setting concept, which not only includes hotel revenues, but also potential revenue from gaming, food and beverage, spa, and other significant profit centres, how do you think the gaming and casino sector has developed business processes and increased their profitability?

Bonnie Spalding:

One of the most critical business processes that increases the benefit of Total Customer Value optimisation and applies to all types of hospitality operations is ensuring that the property is capturing the total value for each guest. Marketing of loyalty programs and encouraging guests to use their loyalty cards when making purchases helps to create a more complete guest spending profile. There are definitely real challenges to acceptance of these programs in Asia. That said, these challenges are being met by demonstrating value in program participation - presenting the right offers, comps, or giveaways to the right guest profiles has resulted in improved rates of loyalty program participation. Working these incentives into the most relevant touchpoints at outlets throughout the property - for instance requesting a loyalty ID at the point of a spa reservation, and explaining it will result in preferential reservation times - is a way that small changes to process can have a significant impact on profits.

How can one optimise initiatives focused on up-selling or cross-selling ancillary offerings?

Bonnie Spalding:

It may sound basic, but organisations with these initiatives can best optimise these programs by regularly tracking their impacts. Typically they are implemented because there is incremental revenue which can be quickly achieved with the minimal cost of a new business process. Once in place and generating revenue, often the tracking of these programs simply stops. Unfortunately left unwatched the incremental benefits can diminish. For example, a guests who typically books a premium room type learns from an online review site that they are likely to get offered a much cheaper upsell at the front desk. The guest then books the standard room category and is upsold for a $50 premium vs. a paying $150 premium initially. Performing periodic but regular cost/benefit and displacement analyses can help to quantify such programs' real impacts.

What do you predict will be the biggest talking points of the RM session at TDS Asia 2011?

Bonnie Spalding:

The role of revenue managers continue to change and grow, and therefore the relationship between marketing, finance, and revenue management is always a hot topic. Social media and its impact on demand, distribution, and marketing is sure to be discussed with enthusiasm. I'm looking forward to the conference and being able to engage with many creative industry players!

Bonnie Spalding, VP Business Consulting for The Rainmaker Group, will be moderating the ‘Cutting-Edge Gaming RM Strategies’ at the forthcoming Travel Distribution Summit Asia 2011, to be held in Singapore (May 18-19, 2011).

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E: marco@eyefortravel.com
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