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Revenue Management has come of age
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Travel Distribution India 2008
Revenue Maximization (RM)
November 26, 2008Taj Lands End, Mumbai
www.lemontreehotels.com
The Lemon Tree Hotel Company
• Lemon Tree Hotels: India’s fastest growing, upscale, full service, moderately priced hotel chain
• Red Fox Hotels: Economy hotel brand, under development
RM Intersects Distribution, CRM & Operations
Controlling Costs Is Critical To Bottom Line Success
Distribution Strategy
• Maintain rate parityMaintain rate parity
• Dynamic pricing and packagingDynamic pricing and packaging
• Explore new distribution avenues Explore new distribution avenues
RM In Hotel Development
OperationOperation
Development Development
Site SelectionSite Selection
DistributionDistribution
OptimizationOptimization
ProfitabilityProfitability
RatiosRatios
ROIROIReven
ue m
an
ag
em
en
t
Purchase Influencers
LocationLocation
Brand/FlagBrand/Flag
ServicesServices
Facilities/AmenitiesFacilities/Amenities
PricePrice
Static
Dynamic
Determinant(can’t be changed)
Static (can be changed)
Incremental
Filter/Stimulant
Pricing Considerations
Target: REVPAR OptimizationD
em
an
dD
em
an
d
Focus: OccupancyFocus: Occupancy
Focus: ARRFocus: ARR
• Understand competitionUnderstand competition
• Drive severe cost control Drive severe cost control
• Pursue RPursue REVEVPAR, not ARRPAR, not ARR
RM Today: Strategic Not Tactical
Market
Unqualified Customer
Prospective Customer
Customer
Satisfied Customer
Repeat Customer
Sell
Fulfill
Care
Customer Is King
Value to the customer
Valu
e t
o t
he e
nte
rpri
se
Effective RM
Optimized Revenue
Performance Costs
• Leverage your brand Leverage your brand
• Invest in effective technologyInvest in effective technology
• Build successful partner relationshipsBuild successful partner relationships
Key Drivers: RM Success
