TECHNOLOGY : REVENUE MANAGEMENT
METRICS MATTER
While RevPAR and ADR are standard , the global hotel industry has not yet settled on new metrics to supplement them , and a variety of different measures are being tested . At the HSMAI conference , revenue managers shared the various metrics they are utilizing .
IRevPOR , IRevPAR : “ I often use IRevPOR and IRevPAR . The ‘ I ’ signifies incremental to gauge if production from various strategies is in addition to what I would have garnered ,” says Calvin Anderson , director of revenue management , The Lexington New York City .
TRevPAR : “ We use Total RevPAR in resort markets where there is more revenue management than just room revenue ,” says Aditi Verma , corporate director of revenue management , Northview Hotel Group , Westport , Connecticut .
GOPPAR , TOTPAR : “ In addition to RevPAR and ADR , we focus heavily on GOPPAR and TOTPAR , which is Total Profit Per Available Room . We know top-line revenue is the panacea to all ills ; however , profit also comes from good cost flowthrough and savings ,” says Paul Wood , vice president of revenue generation , Greenwood Hospitality Group , Greenwood Village , Colorado .
RevPASH , ProPOST : “ In restaurant revenue management , we focus on RevPASH , which is Revenue Per Available Seat Hour . When it comes to function space revenue management , we use the metric of ProPOST , which is Profit Per Available Space Time ,” says Nathan Bacher , director of product development , revenue management , Fairmont Raffles Hotels International , Toronto .
RevPAM : “ For the majority of hotels , revenue management still focuses primarily on rooms revenue , and RevPAR and ADR are the most common key performance indicators that are being looked at . However , at Kempinski we are expanding the spectrum of revenue management by bringing other revenue streams into play and measuring them with metrics such as RevPAM , which is conference and banqueting Revenue Per Available Square Meter ,” says Sascha Seefried , regional revenue manager , Middle East , Kempinski Hotels .
Transient Rate Efficiency , Group Rate Efficiency , Sellout Efficiency , Optimal Mix of Sales : “ We incorporate a number of metrics to provide the greatest optimal revenue and market share outcome for our hotels ,” says Denise Broussard , senior vice president , revenue management and e-commerce , Interstate Hotels & Resorts , Arlington , Virginia .
CEO of Kalibri Labs , Potomac , Maryland . “ With the rise of the metamediaries , the traditional price-optimization tools of revenue management can ’ t address that issue . Instead it is going to be addressed much more by digital marketing and e-commerce people . But if they don ’ t connect with the revenue optimization people , it will undermine the hotels ’ revenue management . The silos need to be broken down so this can be dealt with in an integrated way .”
Ensuring history doesn ’ t repeat The global transactional volume of online travel is projected to reach US $ 408 billion in 2013 , more than 40 % of total online sales , according to data from Barclays Capital and PhoCusWright , and increase to US $ 523 million in 2016 — more than 46.2 % of total online sales .
Given their vastly superior market capitalization as well as gateway positions on the online booking timeline vis-à-vis hotel companies , the metamediaries could potentially carve out a large slice of the online travel revenue pie at the expense of online travel agencies and hotel companies .
“ WE ’ RE MOVING CLOSER TO HAVING
THE ALIGNMENT
OF REVENUE MANAGEMENT AND SALES ACROSS THE INDUSTRY , BUT THERE IS STILL WORK TO DO .” – WHITNEY MERRICK , DIRECTOR OF
REVENUE MANAGEMENT , SOFITEL MINNEAPOLIS
“ The critical point for us is that the metamediaries are and will continue focusing on travel ,” says Glen Harvell , vice president of e-commerce , Marriott International . “ Their market positions and success are rooted in three strengths — content , community and connectivity .”
As revenue managers seek to optimize their channel mix , they clearly will have to watch what moves these tech giants make in online travel to avoid losing another chunk of online bookings to high-commission channels .
56 HOTELS September 2013 www . hotelsmag . com