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Neil L. Salerno, CHME, CHA

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"What the Heck is Hotel Revenue Management, Anyway?"


If You Always Do What You Have Always Done.... 

Youíll Always Get What You Always Got!

by Neil L. Salerno, CHME, CHA

Many markets, today, are showing little or no growth, gasoline is selling at near record levels, yet some hotels continue to grow their business. What are the successful hotels doing?

It seems the hotelierís mantra today is ďthink outside the boxĒ. But, how do you break away from years of successful sales and marketing tactics into new and innovative ones? Successful operators are once again reaching out and borrowing tactics used by other industries for some of the answers.

In the late Ď80ís, while the industry faced similar setbacks, hotels borrowed and adopted Yield Management tactics from the Airline Industry. Why not base rates on the flow of supply and demand to drive average rates and, therefore, drive revenue through careful daily adjustment of rates and inventory?

This was pretty innovative and fairly radical thinking for many hoteliers, but it worked and became our way of life. After September 11, 2001, everyone jumped on the reduced rate bandwagon, only to find that lower rates do not create demand, but did create a revenue nightmare, as the market began to recover. 

Itís time to, once again, think outside our hotelierís box. Itís time to reshape the way we do business. Itís time to give the Internet the attention it deserves. Many hotels have ignored the fact that the Internet has been growing exponentially for several years and that it is swallowing up many of our old methods for getting new business. Many travel sites are more sales oriented, better marketed, and more successful than most hotel Web Sites. 

Most hotel brands are diligently working to make their Web Sites work as sales tools to boost brand reservation sales. With the rapid decline of GDS sales, this has become a necessity for them. Fact is, however, only 20% to 30% of Internet reservations come from hotel brand sites. Experts agree that the majority of Internet users utilize Internet Search Engines to find a place to stay. 

Can your hotel be found on the Internet? Itís a scary thought, but many hotels havenít given much consideration to this. Worse yet, many Web Sites were created and designed by well-intentioned Web Masters, without hotel sales and marketing knowledge. Web Sites need to be designed to drive reservations and people need the ability to find that site.

The Internet is a new and exciting hotel market segment. Like any other market segment, it needs focus and attention to be developed into a valuable segment of business. Due to its relatively low cost, owners will be thrilled with its high return-on-investment. 

Many hotel companies have already recognized the opportunities available using the Internet. One day soon, the Internet segment will demand a full time Internet sales person on staff. In the meantime, ďthink outside the boxĒ. There are many Internet enthusiasts, with hotel sales and marketing experience, who can help to develop this market for your hotel. 


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