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The management of distribution channels is the management of partnership relationships. In the lodging industry, the type and forms of these partnerships will continue to evolve. It is important to remember that a distribution channel is effective only to the degree that it helps you achieve your revenue optimization goals. Both your hotel and the channel you
use must benefit.
12 Principles of Distribution Channel Management:
1. Evaluate channel effectiveness based on net ADR yield as well as the channel’s total revenue generation ability.
2. Use distribution partners to promote rack rates and premium rates as well as selected discount rates.
3. Regularly measure the proportion of revenue generated directly as a result of the hotel’s brand affi liation.
4. Design or employ shopper services to regularly evaluate the quality and information accuracy of nonelectronic distribution systems.
5. Regularly measure the proportion of revenue delivered via nonelectronic distribution channels.
6. Develop and aggressively promote their own well designed proprietary (not brand controlled) property web site.
7. Assign one or more individuals to regularly evaluate the accuracy of those electronic distribution partners listing the property’s inventory and room rates.
8. Avoid distribution channels that require manual uploads of inventory and rates.
9. Seek out commission-based IDS partners; avoid merchant and opaque model site operators if they lead to product commoditization.
10. Implement a proactive Web 2.0 strategy via CGM initiatives such as blogs, tweets, guest experience, and photo sharing.
11. Seek out specialized distribution channels to advertise unique hotel offers based on unique product attributes. Utilize sound differential pricing strategies to price the offerings.
12. Aggressively implement strategies designed to shift guests’ future bookings from more expensive distribution channels to lesser expense channels.
Questions
1. How profitability impacts net ADR yield
2. What is the difference between GRS and GDS?
3. Name principles of distribution channel management?
Literature:
1. Hayes, D. & Miller, A. (2011). Revenue Management for the Hospitality Industry. Hoboken, NJ: John Wiley & Sons, Inc.
2. Stanislav Ivanov. Hotel Revenue Management: From Theory to Practice. 2014. Varna: Zangador
3. Revenue Management. American Hotel & Lodging Association (AHLA), 2006
Topic 9. Evaluation of Revenue Management Efforts in Lodging
9.1. The Lodging Revenue Paradox
9.2. STAR Reports
9.3. Competitive Set Analysis
9.4. Market Share Analysis
9.5. Additional Assessments
9.6. Common-Sense Revenue Optimization
The Lodging Revenue Paradox
As you have learned in the previous two chapters, all RMs should use relevant data and their insight to make good inventory management, pricing, and distribution channel management decisions. But how do they know if they have done so? The answer will be important to how you assess your own efforts, as well as to the operating statistics others will use to evaluate your performance.
To equitably assess revenue generation in a hotel, occupancy percentage and room rate must be evaluated at the same time. This revenue assessment paradox exists in the lodging industry and is quite similar to the load factor paradox faced by airlines. In both industries, RMs must carefully balance the quantity of product sold (hotel rooms or airline seats) with the prices charged (ADR or air fares) to optimize revenue. Recall that the formula for RevPAR is:
ADR X Occupancy percentage = RevPAR
Note that this formula permits RMs to simultaneously consider the impact of ADRrelated decisions and Occupancy %-related decisions on their hotels’ revenue generation.
Since the mid-1990s, efforts and strategies designed to maximize RevPAR have been a major focus of lodging property RMs. Interestingly, while property RMs and a good number of management companies use RevPAR to measure their effectiveness, sophisticated hotel owners typically do not. The reasons why are many, but they relate directly to the importance of revenue optimization and profi tability (GOPPAR), not revenue maximization.
STAR Reports
In a typical report, the subject (your) hotel’s performance is compared to that of its competitive set, and the subject hotel’s rank (e.g., fi rst in the set, or second, third and so on) on each criteria is listed. Examining a single segment of a STAR report related to hotel occupancy will help illustrate how a STAR performance report can be used to assess your own RM-related performance. To interpret Figure 9.7, assume that your hotel is the 400-room property referred to earlier. Your competitive set is the six similar hotels that you have identifi ed as your competition. In Figure 9.7, the “Property” column refers to your hotel.
The Comp Set column in this STR Trend Report refers to the data from the six hotels you have chosen as your competitive set. The monthly occupancy percentages listed represent the occupancy rates, respectively, of your hotel and the combined (average) occupancy of your comp set.
One of the most important features of a STAR performance report will be your hotel’s index on various criteria. This occupancy, room rate, or RevPAR ratio is calculated as:
Performance of subject of your hotel/ Performance of competitive set hotels = index
For example, if your hotel achieved an occupancy of 70 percent last month, and your competitive set achieved an occupancy of 70 percent, your occupancy index would be computed as:
70% occupancy (Subject hotel)/ 70% (Comp set) = 100% occupancy index
If, however, your hotel achieved an occupancy of 70 percent last month, and your competitive set achieved an occupancy of 75 percent, your occupancy index would be computed as:
70% occupancy /75% occupancy = 93.3% occupancy index.
Competitive Set Analysis
Lodging industry RMs know that their hotels will perform better than some of their direct competitors and perhaps less well than others. Variations in a brand’s reputation, a hotel’s location, its age, the skills of the workers in its operating departments, and the decision making ability of its revenue management team members all combine to allow some hotels to charge more and to achieve above average occupancy rates. Alternatively, some hotels can charge more, but only at the expense of reduced occupancy levels. Other hotels achieve higher occupancy rates, but only by reducing rates. How a hotel ranks among its competitive set in terms of ADR, occupancy, and RevPAR generation can tell the property RMs much about how guests perceive the value proposition offered by their hotels’ pricing structures and how future rate and inventory management decisions should be made. A few RMs discount competitive set reports. They would argue that true success simplymeans meeting the goals they have set for themselves, regardless of the performance of others.
All RMs must be able to read and understand how to interpret the following performance indexes:
· Occupancy Index Analysis
· ADR Index Analysis
· RevPAR Index Analysis
Market Share Analysis
A complete competitive set evaluation must also include a market share analysis. For this important assessment, market share refers to the percentage of supply, demand, and revenue accounted for by a hotel property.
The terms supply, demand, and revenue are defined as follows:
Supply: Number of rooms available to sell X Number of days in the period
Demand: Number of rooms sold (excluding complimentary rooms)
Revenue: Total room revenue generated from the sale or rental of rooms
This ratio is calculated as:
Available rooms subject hotel / Available rooms comp set (including subject hotel) = Supply share (%).
Similar calculations are undertaken to compute the subject hotel’s demand and revenue generation
Rooms sold by subject hotel/Rooms sold by comp set (including subject hotel) = Demand share (%).
Rooms revenue generated by subject hotel/Rooms revenue generated by comp set (including subject hotel) = Revenue share (%).
RMs analyzing this portion of a monthly performance report (STR includes this specific report as part of their “Monthly STAR Summary”) could encounter a variety of possible outcomes, each of which may be helpful in evaluating the hotel’s revenue optimization performance.
Additional Assessments
A recurring theme of this book is that maximized revenue generation, by itself, is not the best measure of an RM team’s effectiveness. As a result, while a continual assessment of occupancy, ADR, RevPAR, competitive set performance, market share and, if the data are available, GOPPAR and fl ow-through is important, at least three additional revenue-related areas of assessment are also important. These areas of examination and the specific questions they can answer are:
_ Source of business: Who are our buyers?
_ Distribution channels: At what cost do our buyers purchase from us?
_ Web 2.0: What do our buyers say about their experiences with us?
For some RMs, the answers to these questions may be provided by an effective hotel sales and marketing department or the property’s GM. This is so because the answers to these type questions are critical to effective hotel sales and operations, as well as to revenue optimization. The correct responses to these questions, however, are just as critical to revenue management teams because the answer to the question, “Who are our buyers?” will provide data essential to initial differential pricing decision making.
Knowing the distribution channels that deliver the majority of a hotel’s rooms buyers and the costs of those channels is key to effectively opening and closing room discounts and to rooms inventory allocation. Also, better understanding guests’ experiences during their stay can help an RM provide valuable assistance in product improvement, as well as in identifying areas in which a hotel excels and thus could gain marketing and perhaps pricing advantages.
Дата: 2019-07-24, просмотров: 237.