Download ppt - Welcome Revenue Management – An Insider’s Perspective Alise Deeb Senior VP, Revenue Management La Quinta Inn & Suites

WelcomeRevenue Management –

An Insider’s Perspective

Alise Deeb

Senior VP, Revenue Management

La Quinta Inn & Suites

Topics of Conversation

• History of the Industry• Recovery• Future Forecast• Basics of Revenue Management• Understanding the Customer• Strategies• Partnership with Hotels • Q&A

2© 2012 CTDA, All Rights Reserved.

What Happened?

© 2012 CTDA, All Rights Reserved. 3

Demand Returned...


• Sourced by STR – Hotel Conference 2011

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


Next Year’s Forecast

• 2012’s demand has continued to grow due to the limited supply growth

• 2013’s Forecast varies by company, all agree on continued growth


2012 STR PKF PWC

Supply 0.5% 0.4% 0.5%

Occupancy 2.1% 2.4% 2.5%

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%

Revenue Management: Science or Fiction?

• Economic Factors• Supply & Demand• Unemployment• Gas Prices• Inflation• Political Uncertainty

• Group & Base Business• Other

• Events• Holidays• Weather


Revenue Management: Science or Fiction?

• Lead Indicators• Booking Pace • Group Pace• Tracking Interest on the Internet

• Results & Reporting• Travelclick • Smith Travel • Automated Revenue Management Systems• Many other tools and services available for Business Intelligence

providing hoteliers insight

• Is it really pricing?


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…)


Just the Facts…

• What are the many factors that Revenue Managers consider when negotiating discounts?

• Hotel needs:• Market performance• Performance in the marketplace• Hotel’s Budget• Historical Preference• New Supply• New Ownership/Renovations


Just the Facts…

• Guest/Company profile:• 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


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


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


Partnering with Hotels

• Positioning yourself for better pricing• 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


Q & A
