REVENUE MANAGEMENT AND 5-STAR HOTELS
THE 5-STAR HOTELS ARE CONVINCED THAT THEY CAN NOT DARE BECAUSE IT WOULD HURT THEIR REPUTATION, THEY ARE VICTIMS AND PRISONERS OF THEIR CONVICTIONS, THE RESULT OF MANY YEARS OF EXPERIENCE …
REVENUE MANAGEMENT AND 5-STAR HOTELS
THE 5-STAR HOTELS ARE CONVINCED THAT THEY CAN NOT DARE BECAUSE IT WOULD HURT THEIR REPUTATION, THEY ARE VICTIMS AND PRISONERS OF THEIR CONVICTIONS, THE RESULT OF MANY YEARS OF EXPERIENCE …
We are often asked the following question: is it possible for 5-star hotels to apply revenue management strategies? Our answer, simple is clear, is: YES! And I would even add: luxury hotels are certainly the most suitable for applying Revenue Management Hotel policies because they have all the features necessary for success.
THE CHARACTERISTICS OF LUXURY HOTELS
They are generally located in very beautiful places known, known to all and which do not require explanations; they are certainly near places of historical interest or beautiful landscapes; they often have panoramic views or are in historic centers, ancient or modern palaces but still prestigious. They are able to offer high-quality services to their guests. They are therefore desired or desirable and it is easier to find tourists willing to stay there.
But while it’s true that 5-star hotels have the right features for Revenue Management System applications, they’re not the ones that make the best use of them. By exploiting them better, in addition to obtaining great benefits in terms of profit growth, they would serve as a driver to drive all derived services such as rentals, restaurants, shops and all activities that are directly related. or indirectly to tourism. If they were not alone in applying these techniques, but accompanied by other structures, of the same category or not, then it would be the destination as a whole that would benefit, the season would be longer, and a season longer. long means more people working, more turnover and more well-being for all.
For those who do not know us, what I write may seem utopian, but we only speak and write about things we have already experienced. Over the years, we have been tracking 5-star hotels and we have data and statistics on how the Revenue, when applied to many structures of a destination, increases its benefits.
WHY ARE LUXURY HOTELS NOT DOING REVENUE MANAGEMENT?
At this point, the question is: why is not that done? Why do not 5-star hotels become the bearers of this renewal? In my opinion, there are many reasons, but the two that interest me is that they are not aware of it and that this would lead to a major disruption of activities.
We all know how difficult and complicated the changes are, giving up that way of working that we’ve had for decades and start doing different things with all the risks that can result. Leave the curtain for the uncertain and especially do it at a historical moment when everything seems to collapse.
Applying the Hotel Revenue Management Software and techniques that we have been using for years, it means approaching the market with fresh eyes, understanding what people want and giving it to them. Thanks to the internet, the selling price has become an extraordinary sales tool (forgive the pun) and when used in a modern and current way, it gives excellent results.
When we analyzed the numbers of luxury hotels that used our expertise (I’m surprised they were not more numerous), we wondered: how is it that in high season they sell? at such low rates? Why do not they increase them? And when we observed the data for the low season, we wondered: but why are they selling at such high rates? They are the most desired hotels in the most beautiful places and they do not benefit!
FEARS AND WRONG BELIEFS TAKE OVER
The explanation is not technical but psychological. The owners and managers of luxury hotels have the same fears as the others: if I drop the prices too much during the low season, I ruin the reputation of my hotel and I run away my customers, in the same way, if I ride them to price in high season my customers will complain and ruin my reputation …
The 5-star hotels are convinced that they can not dare because it would hurt their reputation, they are victims and prisoners of their convictions, the result of many years of experience … in the past, it was probably true, but early or later they will have to resign themselves to the fact that the world has changed, that people have changed, maybe not all, but the vast majority, no doubt, and I think this is clear to everyone.
BUT I GUARANTEE YOU THAT …
I would like to reassure the 5-star hotels and explain to them why their fears are unfounded. Affluent clients, those preferred by these institutions, those who know how to behave in these environments and enjoy the services offered, travel during the peak season because they have the economic means to do so and they choose the best for themselves and their families. Less affluent customers who are more attentive to the price do not travel in high season because they can not afford to pay such amounts. It is therefore 2 different target clienteles who frequent the same places and the same establishments but at different times. Each of these clienteles is satisfied.
That does not mean that we do not have unpleasant or rude customers, but who has the experience of the luxury hotel, knows that paying expensive is not necessarily synonymous with education, the same way that paying little is not synonymous with bad education.
The fears are much greater than the problems that might arise, and if you had any problem whatsoever it will never be as bad as you imagine it will be problems that we can solve with little sense.
I conclude by inviting luxury hotels to take responsibility for the role they can play because they are the main actors in their own destination and they have the power to do so, including changing their destiny!
We will be happy to meet you personally on January 30, 2018, in Menton, at the Royal Hotel, as part of a free training day where we will meet with you, entrepreneurs and professionals from the tourism sector. CONTACT NOW “Winberg Hospitality”, THE NUMBER OF PLACES IS LIMITED.
