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The best revenue managers are those that have very broad and deep levels of experience. By this, I mean those that have worked in various locations, City centre secondary airport resort type locations with varying sizes of accommodation providers that also have various different revenue streams such as meetings and event spa and golf food and drink. This also entails a mixture of Business types such as corporate or leisure or groups.
In answer to this question, it needs to be clear that we are talking about income, we're not talking about profit and therefore would need to consider the cost of sale or levels of commission. Income Will come from a number of distribution channels such as online providers e.g. booking.com. Direct channels such as regular repeat guests by direct contact or through a Brand Website, through an agency such as Silver door. All of these will charge a level of commission for the privilege of receiving a booking with the exception of the Direct channels. Sometimes by restricting or flexing the level of contribution from these types of distribution channels this can assist you in reducing your cost of sale.
In terms of generating income this is quite complex and very much rides on your ability to know your market and the current performance of your apartments e.g. Booking window, length of stay, Number of guests, the pace of your business the occupancy, rate, revenue per available apartment unit and levels of cancellation.
Once you have this information this allows you to make more qualified decisions about the pricing of your apartment and subsequent level of income.
It crucial to set the right rates. The right rate or a combination of the accuracy of the information mentioned in the previous question, importantly when people ask me about setting the right rates it tends to be a leading question, by this I mean that they have usually undertaken a financial calculation and identified a rate that they would like to have on a nightly basis to sell to their guests. This is not the way that price setting works.
Rates are set based on the demand and supply of the location that you are in, it also includes any high demand event dates there may be as a result of sporting or social entertainment. Also importantly is the quality of the apartment and its furnishings.
The demand and supply in the location may vary in different seasons of the year, different months of the year and even different days of the week.
Pricing can be set with the blend of two different approaches. In the first instance you may use something called occupancy based pricing, whereby you change the level of pricing as your occupancy grows for your apartments, secondly you would incorporate demand based pricing whereby you know that there is a trend of hi medium and low levels of demand.
The frequency of your price changes for your accommodation will depend upon the level of activity within the demand and supply of your location. Frequency of changes can be anything from daily to every couple of days to weekly.
No. The simplicity and efficiency of being able to change your rates Will in the main centre upon the property management system (PMS) that you are using. If you have not as yet purchased a property management system (PMS) the level and rate changes is a key criteria when selecting your PMS.
In order to answer the question I need to clarify two things; firstly if visibility is the ranking of my serviced apartment listing, on any given online travel agency (OTA), secondly whether the question refers to the reach to the audience and therefore distribution channels.
Answering the first, the name of the individual apartment is crucial. If the apartment is orientated toward family, and you are keen for families to stay, the apartment should reference that it is family apartment in its name equally if you are in location and with an apartment that appeals to the corporate business segment terming the apartment as being executive, corporate or business would also be appropriate. Of course, it is not enough to simply use the name also to make a provision for the type of guessed that you are seeking to appeal to. It may be that you need to include High speed free Internet access and Nespresso machines for the corporate whilst on the other hand, you may decide to include some family board games, access to Netflix or family DVDs as examples.
The review scores that most of the major online travel agencies and comparison sites have are critical within the buying decision-making process of the guest and in most cases where the guest is able to they will filter their viewing of accommodation based on the review score.
Comprehensive content and professional pictures from the perspective of a guest who has never been to your location is critical.
Using a “lead in rate” is also key. If you have multi-apartments in the same block/location identify your smallest and apply a lower rate to this apartment in order that it will incentivise a “click through” from the location listing page through to your apartment listing. Or you can ensure that you operate with a price per persons listing and your lowest number of persons (and therefore applicable rate) is displayed in the location listing and when the guest clicks through to your apartment listing they will see that there are supplements for increased numbers staying in the apartment.
Where your Demand and Supply allows and/or your operating costs I would strongly suggest that you undertake 1 night rates in the short term in order to appear in more searches. This is a must, as long as it is being managed, for any apartment providers that are launching their serviced accommodation. This will assist in the “ramping up stages”.
Secondly, to increase the “reach” of your audience with synchronise calendars to avoiding double bookings, a Channel Manager will push your rates to various channels e.g. On Line Travel Agents, Comparison sites and Brand Websites. Depending upon the Channel Manager that you have will depend upon how many “Sites”/Channels you can push your rates to. Different channels will appeal to different geographic markets eg. UK based, USA based, UAE, Europe etc and different market segments such as Leisure or Corporate. Sometimes your Channel Manager is integrated into your Property Management System (PMS) and sometimes you need to purchase this separately.
Yes. There are many different automated solutions. I would suggest that anyone embarking on an automated solution should already have established a pricing strategy and have practised a level of revenue management in order to understand the setting of the parameters within the automated solution and the data and information behind the automated price suggestion.