February 2018, Miami
5 RM insights for independent hotels in turbulent times
The chains may have revenue management wrapped up but for independent hotels it’s harder. Fear not, help is at hand
Vlatka Barčan has been in the hotel business for over 16 years. Having graduated with a master’s degree in economics and hotel management in Croatia, she found herself working her way through different hotels along the country’s spectacular coastline.
On moving to the US it was a similar story. As assistant general manager at the Norwich Inn in Vermont, which is owned and operated by part-time Cornell Hotel School Professor and serial hotelier Joseph Lavin, she acquired some “hands on experience”.
“I learnt so much from Joe. Even though I was second in command, they let me run things. It was like running my own business – really helpful!”
Although Barčan remains friends with the Lavin family, she outgrew the area and wanted to move on – this time to the Big Apple. At The Pierre, a five-star Taj Hotel in New York, she again she proved her versatility in various roles including as assistant restaurant manager, director of reservations and as revenue and sales manager. While at The Pierre, she learned revenue strategies from director of revenue Darren Skomorowsky, who became another one of her mentors.
Her final stint, before launching her own business, was spent as director of revenue for Millennium Hotels, where she was quickly promoted to area revenue director, managing the New York and Boston markets.
From this experience, Barčan’s Fifth Revenue Inc consultancy is now on a new mission – to help independent hotels flourish in what is an increasingly turbulent market.
“Demand is growing,” she says, “but not as much as supply, and a lot of hotels don’t see the importance of paying attention to their pricing strategies.”
Ahead of the Smart Travel Data Summit North America 2018 in Miami next year where Barčan will be speaking, she shares five revenue insights for independent hotels.
1. Competitor analysis needs to be accurate
If you want to be ahead of the game, you need to understand your competition inside out and learn their moves. For Barčan, it’s important to establish who your real competitors are. This can only be achieved if you know your own goals, how you want to differentiate, which customers you want to attract and so on. “It’s about knowing who your market is as benchmarking against that,” she says. When hotels are comparing themselves against their true competitors, then they can put the right strategies in place to increase REVpar, one of the main day-to-day metrics.
2. Loyalty counts
People like to be rewarded by collecting points and receiving discounts, which has a direct correlation to rises in revenue, while helping independent hotels to stay in line with the moves of the chains.
“If you don’t have loyalty programme in place at this point, you are very much behind the game,” says Barčan, who argues that offering loyalty discounts will automatically increase direct bookings and therefore reduce commissions to third parties.
If you don’t have loyalty programme in place at this point, you are very much behind the game,”
3. Reviews and staying on top of social media directly impacts revenue
On another note, there is a direct correlation between responding to all guest reviews and rises in revenue. Today, it is common practice for guests to read reviews before confirming a booking. Generally guests only write a review if they have had an amazing experience or if they have something to complain about. So, if a guest has taken the time to write a review, then it’s important for a hotel to respond. Hotels need to understand that even a bad review can be turned into a positive experience for both the guest and the hotel. Aside from reviews, today being active across all social media that a guest chooses to engage on is an essential weapon in the bid to influence a guest’s decision.
4. Personalisation is no longer just luxury
“The way I see it is that the whole industry is going towards customer personalisation and it is the only way to retain guests,” says Barčan. With this in mind, hotels today need to deliver a personal service to each guest, by creating a customer-centric business that competes in the digital age. “We used to associate personalised service with luxury, but nowadays the only way to stand out and retain your guests is to personalise throughout their stay,” she says.
Here predictive analytics plays a role because it is based on understand the relationship between observed actions and future actions. “Collecting all possible data about your guests from any possible source is crucial,” Barčan stresses.
This means really understanding your guests likes, dislikes and preferences and using the data and knowledge to provide personal service by creating a unique experience. “Little things like knowing the guest’s preferred room temperature before they check in or offering them their favourite beverage, can really make a difference,” she says.
5. Tech tools can make all the difference
There are many different tools available to hotels today that make revenue management easier but unfortunately the industry-wide problem is that not all tools talk to each other. “When choosing revenue management software, rate shopping and other tools, hoteliers really need to understand what makes sense for the property, especially when the budget for those tools is limited in independent hotels,” warns Barčan. As there are a number of free revenue tools out there like Google Analytics, or some offered through OTA partners, this doesn’t have to be a huge investment, but it is all about using the tools correctly and thinking outside of the box.