Transcript Slide 1

Welcome
Revenue Management –
An Insider’s Perspective
Alise Deeb
Senior VP, Revenue Management
La Quinta Inn & Suites
Topics of Conversation
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History of the Industry
Recovery
Future Forecast
Basics of Revenue Management
Understanding the Customer
Strategies
Partnership with Hotels
Q&A
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What Happened?
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Demand Returned...
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Sourced by STR – Hotel Conference 2011
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Recovery…
• Review of the Top 25 Markets as defined by Smith Travel
Research
• Only 4 markets have recovered their ADR (Nashville, New Orleans,
Oahu Island, and San Francisco)
• West Coast currently has the highest growth in RevPAR (Revenue
Per Available Room)
• 15 Markets will grow RevPAR greater than 6.5% by end of 2012
• ADR In Top 50 Markets – Currently 4.7% below previous
peak
• Starbucks have raised their rates faster than the hotel
industry
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Next Year’s Forecast
2012
Supply
STR
PKF
PWC
0.5% 0.4% 0.5%
Occupancy 2.1% 2.4% 2.5%
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ADR
4.4% 4.2% 4.6%
RevPAR
6.5% 6.7% 7.2%
2013
STR
PKF
PWC
Supply
0.9%
0.8%
0.7%
Occupancy
0.3%
1.1%
0.6%
ADR
4.6%
5.0%
4.9%
RevPAR
4.9%
6.2%
5.6%
2012’s demand has continued to grow due to the limited supply growth
2013’s Forecast varies by company, all agree on continued growth
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Revenue Management: Science or Fiction?
• Economic Factors
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Supply & Demand
Unemployment
Gas Prices
Inflation
Political Uncertainty
• Group & Base Business
• Other
• Events
• Holidays
• Weather
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Revenue Management: Science or Fiction?
• Lead Indicators
• Booking Pace
• Group Pace
• Tracking Interest on the Internet
• Results & Reporting
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Travelclick
Smith Travel
Automated Revenue Management Systems
Many other tools and services available for Business Intelligence
providing hoteliers insight
• Is it really pricing?
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Understanding what drives the choice…
• Why does the consumer travel?
• Not all about price
• Location
• Loyalty Program
• Hotel Amenities
• Buying and Selling and the Emotional Response
• Communication and Marketing
• Self Booking Tools vs. the traditional Travel Agent model
• Social Media (Trip Advisor, etc…)
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Just the Facts…
• What are the many factors that Revenue
Managers consider when negotiating discounts?
• Hotel needs:
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Market performance
Performance in the marketplace
Hotel’s Budget
Historical Preference
New Supply
New Ownership/Renovations
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Just the Facts…
• Guest/Company profile:
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Volume
Booking Pace – when do they book?
Length of Stay
When do they stay?
• Day of Week
• Month
• How do they book? Booking Channel
• Number of preferred hotels
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What are the Strategies?
• Dynamic Pricing – combination of time-based
strategies combined with supply and demand, use
of rationale pricing as a baseline
• Day of Week – Every day is assigned a value
• Length of Stay – Price is determined by check in and
check out
• Static Pricing – Set Rates, may include some
seasonality typically has a high use of discounting
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What are the Strategies?
• Special Event Pricing – Implementing pricing
based on event demand vs. mother nature
• Seasonality – defined by either demand or what
the market will sustain
• Bottom Line – Opportunity pricing that responds to
the marketplace activity
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Partnering with Hotels
• Positioning yourself for better pricing
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Communicating and limiting hotel participation
Provide additional data
Deliver on commitments
Open to Dynamic Pricing for preferred hotels
Comparing “Apples to Apples”
• Education/Training with Technology
• Booking Tools
• Mobile Apps
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Q&A
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