• Upcoming Event

    HITEC DUBAI

    Hospitality Industry Technology Exposition & Conference

    November 14–15, 2017
    Conrad Dubai
    Dubai, UAE

  • Next Event

    HITEC AMSTERDAM

    Hospitality Industry Technology Exposition & Conference

    April 11–13, 2018
    RAI Amsterdam Convention Centre
    Amsterdam, Netherlands

  • Next Event

    HITEC HOUSTON

    Hospitality Industry Technology Exposition & Conference

    June 26-29, 2018

commercial

Why I Push for More 'Advanced' for Revenue Managers

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 8 August 2017
Writing can be very therapeutic and this is one of those posts where I will vent. Within 15 minutes of arrival, on the very first day of my first consulting gig for a hotel I was told by the company’s CFO to keep my analysis at “the lower end of the sophistication range.” He explained that the hotel industry has many “service” types that rose to managerial positions without getting much exposure to business analysis techniques and would therefore not be able to follow a complex or mathematical approach to problem solving. I thought it was interesting that this company was paying ME to teach ME how to think more like THEM, when the only reason they should be paying me is for me to teach them how to think like I do.

The One RM Concept Every Brand Revenue Manager Should Know

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 14 July 2017
Would it make sense to only know how to do math using a calculator? Even in our hi-tech society, it is not OK to NOT understand the fundamental processes of adding, subtracting, and multiplying just because you have a machine than can figure it out for you. I think most of you would agree with that opinion. Yet, in the Hotel Revenue Management function, the most mathematical function of the hotel industry and one of the most mathematical functions of any industry, most RMs using Brand RMS systems to make rate decisions have no clue how the software calculates forecasts and suggested rates. At best, that’s just odd, at worst, it is outright irresponsible to the hotel’s stakeholders.
commercial

The Core RM Concept Every Brand Revenue Manager Should Know, But Doesn't

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 14 July 2017
Would it make sense to only know how to do math using a calculator? Even in our hi-tech society, it is not OK to NOT understand the fundamental processes of adding, subtracting, and multiplying just because you have a machine than can figure it out for you. I think most of you would agree with that opinion. Yet, in the Hotel Revenue Management function, the most mathematical function of the hotel industry and one of the most mathematical functions of any industry, most RMs using Brand RMS systems to make rate decisions have no clue how the software calculates forecasts and suggested rates. At best, that’s just odd, at worst, it is outright irresponsible to the hotel’s stakeholders.
commercial

Pace Report Enhancement #1 - Variance Components

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 15 March 2017
Sometimes the simplest math can deliver the most powerful analytics. When analyzing variances for revenue performance, there is one powerful metric that is easy to calculate and so easy to explain that everyone will be impressed when you use it. The Variance Analysis Components metric will let you show what portion of a variance in sales or expense is attributed to changes in occupancy and what portion is attributed to changes in price. Download the file below and follow watch this short video.

3 Free APIs for Revenue Management Intelligence - Part #2

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 15 November 2016
Now that you learned about API’s and how to use them in our previous post, I won’t bother to show you how, I’ll just tell you the what. The next free API is for exchange rates. Revenue Management planning often requires the use of exchange rates to forecast changes in demand based on changes in currency. There are dozens of APIs for exchange rates, but most of them are paid. Luckily, the European Central Bank offers a free, XML based, feed that you can use to download the current exchange rate. The rates are the closing rates for the previous date, but unless you are trading currency, this is good enough for most planning models.
commercial

3 Free APIs for Revenue Management Intelligence - Part #1

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 14 November 2016
Over the next three days I will share 3 free APIs that you can tap into to get data that you can use to make you RM analysis more robust. In this video I explain what an API is and how to automate the process of extracting weather data from http://openweathermap.org/ into Excel using Web Queries. This video is from a free webinar I conducted last year on data APIs for RM. Many RMS systems charge you to get this data but I will show you how to get it for free.

Why Revenue Managers Should Have the Last Word

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 10 November 2016
It is hard to argue with the notion that Revenue Management is now the most “mission critical” function in the hotel business. RM sits at the crossroads of the strategic and tactical decision making process for every single department in a hotel. This is why I believe that, next to the GM, Revenue Managers should have the last word in every decision in a hotel company. In fact, the RM’s job is so close in significance to the GM’s that, in most properties with limited resources, the RM is the GM. Today, if any hotel manager wants to make a pricing or promotion decision, they would be wise to consult with RM first, not only to validate their assumptions, but also to gain guidance on the feasibility of their plan. The same cannot be said about any other function. Let me give you a few examples.

Why Revenue Management is the Best Profession in the Hotel Business

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 20 October 2016
I don’t know anyone who has not, at some point, questioned their career choices or doubted the value of their profession. Actually, I believe that if you don’t question why you do something you are probably not very good at it. Questioning your job means that you are thinking deeply about it and that’s where innovations and breakthroughs usually occur. Think about it, most advances in any industry are driven by people who are in some way frustrated by their work. When I wonder what the point is to all this Revenue Management stuff, I often have to remind myself of the reasons why this is the best profession not only in the hotel business but in most businesses anywhere. Here are just a few of the reasons why you should love Revenue Management.

Avoid These Mistakes When Presenting the Effectiveness of Your Revenue Management Tactics

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 21 September 2016
Revenue Managers are often tasked with deploying discounts and promotions in order to boost sales during low periods. The question that immediately follows these actions is whether the bookings would have been generated regardless of the special or promo. How to count whether or not the promotion was successful involves a little bit of statistics that we will not get into here, except to say that it’s not rocket science. What is more important is first, how you set up a proper pricing experiment, and then, how you show whether a discount or promotion wass actually effective. There are five common mistakes that I see Revenue managers make when they are trying to communicate if a pricing tactic worked.

6 Psychological Pricing Tricks for Hotel Revenue Managers To Try

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 20 September 2016
In the chaotic universe that is the daily life of Hotel Sales and Revenue Management, it can often be difficult to think of creative ways to approach pricing. Don’t worry, I’ve got you covered. Here are five studies that reveal insights into some interesting psychological aspects of pricing that you can exploit in your pricing tactics. 1. Effect of Useless Price Points Dan Ariely, professor of psychology and behavioral economics at Duke University, analyzed the subscription sales for The Economist magazine and realized that adding a “useless” price point actually increased the sales of the premium subscription. Dan set these 3 peculiar price points: A web-only subscription for $59 A print-only subscription for $125 A web + print subscription for $125 Option 2 seems “useless” in that you’d stick with option 3. The result is that an overwhelming number (84%) of subscribers chose option 3 because it looked like more of a bargain that option 1. In fact, when Ariely removed option 2, the purchase of 3 plummeted to 32%. In effect, what Ariely’s pricing scheme managed to do was convert “discount” seeking shoppers to “value” seeking shoppers.

These 15 Graphs Reveal Why Hotel Revenue Managers Are Paid Less Than Finance Managers - Part 1: Career Path

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 16 September 2016
I’ve worked in Corporate Finance and in Revenue Management for the Hospitality and other industries and I can confirm that, when done correctly, there is no more analytically intense profession than that of a Hotel Revenue Manager. Like I have said on this blog dozens of times, the Hotel Revenue Management profession sits at the crossroads of every department in a hotel company. As an example, over the last few years, hotel RMs have been taking over the responsibility for setting the pricing and promotional strategy for Sales, Marketing, and even F&B. Furthermore, RM now has as much fiduciary responsibility for hotel profits as Accounting and Finance. So why is it that Hotel RMs are underpaid compared to their colleagues in other departments, specifically Finance?

Hotel Revenue Analytics Transformation in 5 Hard Steps

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 12 September 2016
Advanced Revenue Management is all about following the people (guests) instead of the product (rooms). It therefore involves the application of mathematical techniques to PMS and POS data in order to classify guests into behavioral groups that better predict their booking and spending patterns. The intelligence from this guest analytics often debunks many long-held beliefs and renders irrelevant many of the metrics by which hotels have been measured for decades. Guest Analytics is the fuel that powers successful loyalty programs, marketing campaigns, experience management, and Total Revenue Management. However, transitioning to Guest-Centered Revenue Management is not an easy task for most hotel companies because the process involves not only more advanced data science skills, but also the cooperation of departments that may not be used to working together. Regardless of what type of hotel company you work for, here are the five hard steps you will have to take to get to more

The 14 Tools of the Hotel Revenue Manager of 2027

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 8 September 2016
Since 2004, the Hotel Revenue Management function has exploded into a mainstream profession. In just over a decade, however, the “honeymoon” phase with Hotel Revenue Management has ended. As channel management technology has improved and become more standardized, the Revenue Manager’s time has been freed from some of the clerical demands of rate distribution and the focus of their jobs has shifted to the justifying the incremental value added by the RM department. As a result, more pressure will be placed on RMs to “deliver the goods” in generating more Revenue. We are already seeing the impact of this new expectation in the increasing turnover of RMs in some highly competitive markets.

Per Available Customer: The Future of Hotel Revenue Management

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 31 August 2016
A revolution is happening in hotel revenue management. Hotel companies with the highest profit expectations and the most data-driven cultures are beginning to follow the customer instead of the product. They are using advanced analytics to dump their dependence on the crude “Per Available Rooms” (PAR) averages and have begun the move to measure their world by predictive indicators based on “Per Available Customers” (PAC). This is the future of Hotel RM. It is a seismic shift that is reframing the Hotel Revenue Manager’s world view from PAR to PAC. Here are the steps required to profit from this transformation.

The 7 Data Science Skills That Hotel Accountants Desperately Need

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 10 June 2016
There was a time, not too long ago, when Finance and Accounting had complete control over most of the decision making data in any business. I caught the tail end of that generation. At my first job as Financial Analyst for a licensing division of the Walt Disney Company, the finance department had control over all data, including the G/L, contract systems, customer and vendor database, budget and forecast files, and even the IT function. We owned the keys to the kingdom. Skip ahead 15 years and now Accounting is being cast aside as the provider of “historical” information by the “forward-looking” Revenue Management departments. Across the hotel industry, companies are looking for qualified data analysts to fill the data-driven “intelligence” void that Accountants can’t fill. Why is this happening?

Congratulations Revenue Manager! You Are Now In Charge of Conversions.

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 13 May 2016
One of the themes I often explore in this blog is that Revenue Management is simply the data and analytics side of Marketing. As data-driven tactical analysis and decision making have spread throughout the hotel industry, RM has steadily taken on responsibilities that were once the domain of the Marketing department. Forty years ago, the first Revenue Optimization models used in the airline industry were built under the assumption that prices would be provided by the Marketing department. Today, RM is in complete control of Rooms pricing and, in some hotel companies, it is taking on outlets and ancillary menu pricing as well. The same is true for Packages and Promotions, which are now priced and published based on the timing set by the RM department.

10 Google Trend Graphs That Should Scare Most Hotel Revenue Managers

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 17 March 2016
The Hotel Revenue Management conversation has stagnated. As hotel companies try to standardize their approach to rate setting, to take judgement out of the hands of RMs, analytical creativity and innovation has been sacrificed. This trend should be alarming to hotel RMs, as most RM resumés still highlight the traditional skills of RM. Those skills are not where the opportunities are anymore. The thin analytical background of most Revenue Managers will begin to impact their salaries as hotel companies cash in on having focused heavily on programs and processes instead of people. Fortunately, there is a way for any hotel RM to jump back on the high opportunity highway and that is to develop the skills that are in highest demand. The following Google Search Trend charts clearly show how interest in the traditional RM terms have plateaued and highlight the skills that RMs should focus on to continue to command the highest salaries.
commercial

13 Google Trend Graphs That Should Scare Most Hotel Revenue Managers

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 17 March 2016
The Hotel Revenue Management conversation has stagnated. As hotel companies try to standardize their approach to rate setting, to take judgement out of the hands of RMs, analytical creativity and innovation has been sacrificed. This trend should be alarming to hotel RMs, as most RM resumés still highlight the traditional skills of RM. Those skills are not where the opportunities are anymore. The thin analytical background of most Revenue Managers will begin to impact their salaries as hotel companies cash in on having focused heavily on programs and processes instead of people. Fortunately, there is a way for any hotel RM to jump back on the high opportunity highway and that is to develop the skills that are in highest demand. The following Google Search Trend charts clearly show how interest in the traditional RM terms have plateaued and highlight the skills that RMs should focus on to continue to command the highest salaries.
commercial

Two Algorithms That Every Hotel Revenue Manager Will Be Using Soon

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 4 March 2016
The most popular pricing algorithms are great for optimizing Rooms Revenues, but fall short when it is time to consider the impact of rates on all the revenue streams. Unfortunately, that level of RM analysis is no longer enough. To achieve true Total Revenue Management, you need to follow and value your guests footsteps throughout their stay. This type of analysis begins by digging into the behavior of past guests and this is where things get complicated. Luckily, a couple of very powerful data mining techniques can be used to map out the seemingly random decision process that your guests use.

Top 5 Reasons Why the Worst Revenue Managers Love their Comp Set

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 5 February 2016
I love data served with math because it allows you to see patterns that you could never see otherwise. However, there are some instances where correlations are so obvious that I can quickly draw universal conclusions just from casually observing some samples. I have worked with dozens of Revenue Managers from many different types of properties and over the years one pattern has been consistently confirmed. That is that the least sophisticated RMs rely heavily on their comp set information.
commercial

5 Step Rate Parity Busting Tactic That Hotels Need to Copy from the Best Online Marketers

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 25 January 2016
The fight is on globally to end rate parity. You can follow the news on tnooz, They are doing a great job keeping up with the latest on this issue. While governments and Big Travel work out the details, you need to focus on what can be done today to funnel more transactions through your booking engines. I have often said on this blog that the hotel business is usually 7-10 years behind other industries when it comes to online marketing. Hopefully the information in this post will help many of you leapfrog your competitors by implementing a set of tactics that has now become the standard for website conversion strategies. Now, why am I talking about website conversion when this is a Revenue Management blog? Simple, focusing on website conversion is the next great responsibility that RM will take from Marketing as it has a profound effect on the entire pricing strategy for any property.
commercial

The Three RM Terms That Revenue Managers Misuse the Most

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 18 January 2016
I have had the good fortune to engage with hundreds of Hotel Revenue Managers from every corner of the hospitality industry. With no reservation I can honestly say that the vast majority are dedicated professionals who want nothing less than the best for their employers. They care about their personal performance and the value they create. Despite all that, it is hard to argue with the reality that the career trajectory of most hotel RMs has left a lot of holes in their mastery of some concepts from economics, finance, marketing, and mathematics that are critical to dominating the function. That’s not their fault, it’s just that the profession expanded so quickly that it did not give most enough time to properly train for the most challenging aspects of the job. As a result, I am often involved in conversations where an RM uses an RM-related term incorrectly or the definition of it is severely twisted. Now, I am not the kind of jerk that is a stickler for nomenclature, but there are three terms that are tossed out incorrectly so often that I feel compelled to list them and define them here. These are the three terms that I find Revenue Managers misusing the most.

What The Best Hotel Revenue Managers Do Best

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 15 January 2016
As a consultant for Mathematical Revenue Optimization I’ve had the opportunity to work with many Revenue Managers in brands, franchises and independents. How much quantitative and programming background they have is never a concern for me because my job is to bring them up to a sophisticated level of technical competence and confidence. Still, some RMs are just a lot better at their jobs than others. What I have learned through the years is that the most successful Revenue Managers routinely do certain things that set them apart from the average and these habits have nothing to do with their technical ability or experience.
commercial

The Dangerous Hotel Revenue Manager

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 8 January 2016
From time to time one of our clients asks me to sit in on a vendor presentation for some Revenue Management or Business Intelligence software. At the end of these demos the salesperson usually summarizes the value of the system by saying some derivative of “it allows you to make more confident decisions.” That is exactly the opposite of what the sales pitch should be. You see, in the hotel business there is no confidence problem. Managers across all departments are usually way too eager to make decisions with little or no information, relying mostly on their experience and gut instincts. I mean, that is what they get paid to do, right? That kind of bravado does not exist where there is no confidence. What these sales people should be trying to do is demonstrate how their systems can provide “assumptions busting” insights that deflate the dangerous level of overconfidence that exists in hospitality decision making.

TOP POST of 2015: How the Best Hotel Revenue Managers Have Transformed The Profession

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 29 December 2015
The 10,000 or so Hotel Revenue Managers around the world are self-dividing into two distinct categories: those that are well prepared(or preparing) for 2024 and those that are well prepared for 2004. Ten years ago, the global lodging industry returned to positive profit growth after three years of declining revenues. Hotels began their four year ride(2004-2008) to historic levels of revenue and profit. In 2004 TripAdvisor, HomeAway and dozens of OTAs launched to capture the new opportunities in travel that became available in a market flush with cheap commercial and consumer capital. That perfect storm led to the explosion of the newest profession in the hospitality industry – the Hotel Revenue Manager. Their role, primarily, was to take advantage of expanding opportunities in a growing market by getting the property well distributed through a complex web of channels which were all doing well.

Four Experiences Shared by the Best Hotel Revenue Managers

OWL Hotel Analytics and Optimization >> Hotel Analytics and Optimization Blog 15 December 2015
The traditional career path for most Revenue Managers is to start in Reservations or the Front Office and then jump into an RM role. While this may be the most efficient process for sourcing RMs, it is not necessarily the most effective. Many hotel companies are beginning to realize that great Revenue Management is more about creating value and wealth than it is about uploading rates and creating pace reports. For the latter you just need to learn some technical skills, but for the former you need to be exposed to experiences that are not available to the typical Reservations or the Front Office employee. The best Revenue Managers I have ever met have work experiences that have instilled in them the “business maturity” that is so crucial to the RM profession. Here are the four experiences, in my opinion, that the best RMs share.

Request Information

Thank you for your request, we will get back to you as soon as possible.
Close
Please enter your contact details below and we will get back to you with the requested information as soon as possible.
An error occured, please check your input and try again.


CancelSubmit

Newletter

Thank you for subscribing. Your email address has been added to our mailing list.
Close
To subscribe to the HITEC Bytes Newsletter please enter your email address below.
An error occured, please check your input and try again.
CancelSubscribe