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Revving Up Revenues

Hotel Data Conference Focuses On Profitability, Increasing Supply

Monday, August 21, 2017
Miss Kerry Medina
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Revenue was unsurprisingly and understandably a hot topic at STR’s annual Hotel Data Conference, which took place Aug. 9 to 11 at the Omni Nashville, as current market conditions have rendered fierce competition in the industry.

In the data session “Hotel Supply Pipeline: How Much Is Enough?” Bobby Bowers, STR’s SVP, operations, noted that 825 hotels opened in the U.S. between June 2016 and 2017 with another 583,028 rooms added to the pipeline in the same 12 months, with 48 percent of that new inventory set for the top 26 markets. As supply comes in fast and furiously, the top-line growth environment—although positive—is decelerating, a point made on the panel “A Revenue Manager’s Best Friend: A Profitable Business Mix.”

But panelists were all in agreement on the power of data as a means of projecting future demand and revenues, with Johnathan Capps, vp of revenue at Charlestowne Hotels, advising hoteliers to leverage 2016 results in planning for year-end 2017 and to develop a comprehensive revenue strategy for 2018. “Take advantage of the data already available and use it to monitor trends and build on your current success,” he said.

Another panelist, John Cook, revenue management analytics, Western region at Marriott International, echoed similar sentiments: “When it comes to forecasting and budget, the best predictor of future behavior is past behavior,” he said.

While some conference attendees agreed that data is key in planning and forecasting, there was also a consensus that statistical information taken into consideration should go beyond hotel booking patterns.

Susan Spinney Cortlett, senior director, market management at Expedia, explained that given the many factors, like market conditions and holiday shifts, that can impact forecasting, hotels should look beyond just rate. “Hotels shouldn’t just look at their comp sets, but also supplement their revenue strategy with information like airline data and conditions in competitive and surrounding markets because there are so many factors that can impact hotel bookings,” she said.

Cortlett further added that although not all hotels have sophisticated revenue management tools, such information is readily available to Expedia’s hotel partners, much of which can be accessed through its Rev tool on Expedia Partner Central. “Beyond what our hotel partners do with Expedia, we have so much year-on-year information from all of our partners globally that can be used in the planning process,” she noted.

Beyond the broader market data that hoteliers should take into account, Lily Mockerman, president and CEO of Total Customized Revenue Management, is a proponent of looking at statistics on ancillary revenue streams such as F&B and spa. She applauded this year’s conference organizers for bringing more creative dynamics to discussions pertaining to revenue management by including a broad range of speakers such as MMGY’s VP integrated planning Lucas Cobb and Airbnb’s Head Economist Peter Coles.

Mockerman also thought the addition of new conference tracks focused on F&B revenues to be another benefit for hotel attendees and hopes to see even more dedicated to the topic down the road for those who are ready for more advanced, hands-on applications. “Continuing education and the sharing of different view points is so important to the future of the revenue management industry, which used to be limited to just managers who sat in back offices,” she said. “But now we have the opportunity to collect and share ideas more than ever before.”

Like any aspect of hotel revenue management, F&B doesn’t exist in a vacuum, a point that was illustrated in the panel discussion “Maximizing Revenue Opportunities in a Changing Environment.” A detailed breakdown of meeting revenue drivers beyond rooms revenue showed that total meeting F&B revenue, including banquet bar revenue, totals 4.6 percent; rooms revenue sits at just 2.7 percent.

Jose Manuel Baptista, general manager at Miami’s Regency Hotel, was one conference participant concerned with growing his property’s F&B revenues, explaining that he sees revenue management strategies more focused on revenue per available seat rather than per available guest, a statistic that drives his property’s daily breakfast set up and particularly the labor required to manage it each day.

“If I don’t look at those numbers, I won’t know if I’m overstaffed,” he said. With tables for two or four guests and one server designed to every four or five tables, Baptista’s goal is to achieve balance between serving guests and having enough staff on hand. The discussion surrounding RevPAS at this year’s F&B sessions was appreciated, he said, “but of course these are also general rules and every property is different.”

Miss Kerry Medina
Freelance Writer
Other (not listed above)
Kerry Medina, Freelance Writer
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