Why data will be your 2021 salvation

Why data will be your 2021 salvation

2020 is a year that is finally behind us and whilst we are not quite out of the woods yet, there is a lot to be positive about for sure... Hospitality has changed and whilst there is no doubt that 2020 was one of the toughest years any of us have experienced in our lifetime, there were so many positives to take from it. For me personally, it was the absolute certainty that we are a part of the most resilient industry in the world. We definitely are stronger together and we proved that...As Revenue Managers, moving into this new year, we need to be very aware of new business considerations that will impact our role for some time to come.The most basic consideration that we will need to make is that many of us will have fewer people in our teams.  The constant open/close/open/close has been draining on our teams and living with furlough has, in most cases, not been easy.  There are several facts that we can't ignore, one of which is that many of our teams will have moved to other industries that have been less volatile, therefore we all need to prepare to multi-task and to have wider job roles.  We have seen all through this pandemic that team members who are multi-skilled; who were flexible and could easily transition between departments are the ones that remain in their roles.  I have a feeling that this trend may well continue... So how will this affect our key roles in 2021?  We are absolutely going to have team members being asked to expand their roles, and how do you manage this? My guess is that hotels are going to need to invest more in technology.  Giving the right people the right tools to do their job will be more critical than ever, and with fewer people in your teams, technology should be a key consideration for 2021.Customer's needs have changed.  My wonderful friend and industry leader, Janel Clark, coined the perfect phrase 'the reluctant Staycationer' which I feel sums up many of our guests both now and in the days to come - a whole new segment to consider... There are of course many of us who can't wait to travel and we are all excitedly looking forward to international travel returning, but there will be a large percentage of the population who will choose to staycation and trust me, most of them will, as Janel quotes be very 'reluctant' indeed.These guests were hoping to be on a beach in Marbella or a 5-star resort in the Caribbean but now they are 'reluctantly' staying close to home.  However, the expectations of these guests have not diminished in line with their luxury travel plans.  If they were planning a stay at a 5-star resort in Jamaica and now are in a 5-star hotel in The Lake District, then trust me, that Lake District Hotel better up-its-game!  The guests that are staying in our hotels now and in the future are not our usual leisure segment and cannot be treated as such.  They expect much more from the experience in your property and you need to start considering how you are not only going to meet, but exceed those expectations...Getting the right rate strategy will be crucial and flexibility is going to be required for a long time into the future and perhaps the days of non-refundable or advance payable rates are behind us.  Getting personal here, you need to understand the impact that this change in customer behaviour will bring to your business.  In the simplest of terms you need to understand the risk of cancellation; cancellation mitigation and a review of your over-booking policies (yes, those days will come back) and to do this you need great data.  You need an easy way to understand it and a simple method of making great and useful decisions from it.With teams working harder than ever and costs a constant consideration, wage costs and the impact that they have on profitability will also be key in 2021. Owners and Managers will need to consider not only the rate that each segment is paying but also the impact each has on incremental revenue, as well as the costs not only to bring that business into the hotel but also the cost of staff servicing that business.  As an example - servicing a piece of group business that may arrive and depart together, may have less of an impact on staffing at front-desk, or could include porterage costs that you don't have with transient guests.  The cost of servicing rooms should also be reviewed.  If guests are checking out on Sunday, do those rooms really need to be turned around with higher hourly costs for Sunday staff being considered, or could they wait until Monday with normal hourly rates?  Every single cost will need to be considered and again, for that, you need to have great data.Understanding each line-item and its impact to your bottom-line will be crucial and for that, you need to start from the bottom - up... Working as a Revenue Management Consultant for 18 years, one of the very first questions I always asked a hotel was, 'how much does it cost you (not the industry standard) but your hotel, to have a room occupied?'  Often the team members at the coal face; the critical members of your team who were responsible for sales, marketing or even accepting bookings did not know.  The very people who had the power to directly impact a hotel's bottom line had absolutely no clue what costs they needed to cover in order to start building a profitable rate strategy.  So my advice would be, empower your team... let them know the true cost of having a room occupied - and by that I mean, not just the cost of laundry and servicing.  It will be your decision whether you include fixed and variable costs but those hidden costs of sales/marketing/commission, maybe even new costs associated with the pandemic - they have to go somewhere, so be transparent and make sure you know your 'walk' rate - you might be surprised what that actually is.The next step in ensuring a strong and robust rate strategy, even before the clever yielding can begin, is to understand how profitable your rates actually are.  If you are selling a rate of €120.00, what are you losing in tax? commission? F&B allocations? room costs? Before you publish, sell or market any rate, you need to understand just how profitable it will be and the true costs that need to be covered to make profit hit your bottom-line.To help with understanding both your cost of occupied room and your rate profitability, we have come up with two unique reports - The Cost Calculator and The Profit Predictor and both of these are offered to the industry, completely free of charge. To access these reports, just go to:http://rightrevenue.hubspotpagebuilder.com/free-access-to-right-revenue-calculate-hubI really do hope that both these reports help you understand your cost implications and I hope will help add profit back to your bottom line. They are our gift to you and a very small gesture to help ensure that you are 'Revenue Ready'.Data really will be your salvation in 2021 and to coin a phrase I first heard during a conference in London (in the heady days when we could all meet up) - 'without data, you are just another person with an opinion but more importantly, without an opinion, you are just another person with data'.  Here's to great synergy between the two and a very, very successful 2021 to you all!And for all things revenue, just ask@rightrevenue.wpengine.com