How much revenue are you leaving on the table?
Hotels across Australia and New Zealand are experiencing an occupancy boom, particularly in regional areas, and the 170 properties that make up Choice Hotels are no exception. With the lifting of border restrictions and the return of interstate and international travel, occupancy levels across the group are showing a strong recovery from pre-pandemic levels.
At the recent Choice Hotels Asia Pacific iGNITE conference in Melbourne, Anthony Stanley, director of performance and revenue management, said the adoption of revenue management services is proving to be a game-changer for properties.
“Having dedicated revenue managers rate and set property rates has resulted in an average increase of $13.50 per room per night for participating properties, resulting in significant profitability gains for hotels,” did he declare.
Stanley says the math is simple and shows the significant impact on hotel profitability over the course of a year.
“During the first half of 2022, the average rate at a Choice Hotels property using our revenue management services was $152.60 per night, with non-RM properties charging $139.10; a difference of $13.50.
“If you do the math, on a 45-room property, over a full year of operation based on average network occupancy, there’s nearly $150,000 in revenue available to non-participating hotels,” a- he declared.
His question to hotel owners attending the conference was, “How much revenue are you leaving on the table?”
Choice Hotels Asia Pacific has a team of revenue managers who strategically set and monitor rates for the group’s hotels.
Ingot Hotel Perth general manager Paul Rogers said revenue management was key to ensuring they received the highest possible return during periods of “very high occupancy”.
“Revenue management services have been vital to us, both in our early days as a new operation, throughout COVID, and most certainly now as we emerge from COVID. The work performed by revenue managers is crucial to ensuring that we maximize our revenue,” Rogers said.
“Using revenue management allows my staff to focus on providing our guests with the service they deserve from the moment they arrive and throughout their stay. occupancy, our current rates and market rates, and it looks forward for us and takes into account what’s to come.
Quality Hotel Lakeside general manager Kelly Sullivan said the property has seen an almost 20% increase in room revenue since pre-COVID, with record revenue, up 36% from 2021, which it attributes in large part to the establishment of dedicated revenue management services.
“Before, I always looked at the rates. I would try to watch it at least once or twice a day and tweak it as needed. When the business was busy, it was sometimes overlooked or pushed to the bottom of the list,” she said.
“Now I’m confident that our chief revenue officer is constantly reviewing pricing and has the tools to make the best decisions for the business.”
Mr Stanley said revenue management was becoming an essential part of the franchise groups model and was key to ensuring profitability and lowering the cost of ownership for franchisees.
“In addition to Revenue Managers, earlier this year we began rolling out the ChoiceMAX automated revenue management service, and franchisees using this system are already seeing the benefits of using market and historical data to set best rates for today and into the future, with price changes occurring multiple times a day,” he said.
Revenue Management gives our franchisees the ability to maximize revenue, increase profitability, and free them time to focus on providing the best customer service and value.
For more information, visit joinchoicehotels.com.au