Finance

During pandemic we have seen an increase in package and leisure sales, especially for the non-central hotels. With travelers willing to spend more money on theirselves many hotels have seen an increase in incremental revenue. We see an increase in requests for Total Revenue Management projects now that restrictions are lifted and demand is returning.

More than asking if hotels should diversify their revenue streams now, they should be asked what has stopped them doing so earlier!, or in other words, why do hotels only do revenue management in the space where there is a bed?

Many hotels have been diversifying their income streams for ages. Though, the entire industry has still been measuring its performance through RevPAR as being a de facto metric since the Revenue Management discipline was born.

Having spend the last few years making exactly this point, and previously in hotel operational finance, I am very pleased to see the industry moving in this direction. Many operators have already moved to include a profit index in their reporting and some owners have even been successful in including in the management agreement as a performance measure.

Owners have historically used avaialble financial benchmarking reports becuase their ability to pay debt and earn a return on their investment is dependent on the bottom-line, not the top-line. It takes more of an effort to convince operators that they can benefit by comparing the operating performance of their hotels to comparable properties.

I'm a firm believer that the best hoteliers and GM's are those that are financially literate. Obviously, there is more to leading a hotel than just financial literacy, but it is a huge component. I also believe that as hotel leaders we should constantly be growing our Lid's to steal a concept from John Maxwell.

First and foremost we need to make sure that we are showcasing commercials in hotels as a career path that is worth pursuing as we have seen industry drainage of talent due to working conditions as well as pay-scale. As a career path you can come up to the top of commercials across all three and where you spent your majority of time will determine which part of the hotels lifecycle your skills will be useful.

It's RM, no doubt. As this is the only discipline that truly knows what's going on, as the only data-oriented department in hotel operations.We already have very many examples in the industry of former revenue managers advancing into C-level roles and becoming successful strategic leaders thanks to their analytical skills, deep understanding of data, and ability to see how different actions by different departments affect the bottom-line profit and operating efficiencies of the entire organization.Our new digitized reality dictates that data is our new currency.

One fairly simple focus will be to implement a digital up-sell strategy. Exact figures are hard to find but it seems that 85% of the hotels globally do not have a digital up-sell strategy. Some don't even up-sell at all. This is basically leaving money on the table.

Having clients all over the world, I can say I have direct experience with the issue. And it's no fun. As a consultant, it's frustrating to go on a call and celebrate the hotel's best year ever, hang up and speak to another client running at 1/10 of 2019 occupation rate...