revenue optimization metamorphosis by tri hospitality

REVENUE OPTIMIZATION

METAMORPHOSIS

TRI HOSPITALITY TRAVEL • REVENUE • INNOVATION [email protected]

COMPANY OVERVIEW

TRI Hospitality, Inc. is a strategic consulting firm that specializes

in Travel Revenue Innovation. We focus on how to drive revenue

and raise efficiencies in hospitality and travel—through innovation.

The company is built on the foundation of utilizing a positive

and personable approach, a tool box of well-honed skills,

relevant expertise, and implementing razor-sharp strategies.

In our engagements, TRI Hospitality identifies new opportunities,

improves risk tolerance, anticipates consumer behavior, and

drives brand awareness.

TRI Hospitality provides three core services:

travel consulting, education, and technology solutions.

We have established partnerships with universities, global consumer

trend firms, mobile apps, and traditional travel distribution vendors.

Our clients include financial investors, technology development and

design firms, online travel sites, and hotel management companies.


REVENUE OPTIMIZATION METAMORPHOSIS


FORECASTING


FORECAST, FORECAST, FORECAST

• Unconstrained Demand—demand not limited to

the capacity of your hotel

– Special or citywide events

– What is outside the norm that could have an effect

• How often and how detailed a forecast should be

conducted

DAYS OUT 30 60 90 120+

FREQUENCY daily monthly monthly monthly

TIME day by day day by day day by day month end

DETAILmarket

segment

market

segment

market

segment

market

segment


FORECAST, FORECAST, FORECAST

• History

• Pace

• OTB(On The

Books)

• DOW(Day of Week)

patterns

• Aviation statistics

• Macro to Micro

• “Big Data”


HISTORY

• Compare to previous

periods’ cycle

– Last year

– Last event

– Anomalies

• Trends

– Rule of three

• Patterns

– By day of week

– By segment


PACE

• The pace of reservation pickup at various points

in advance of stays

• Revenue Management Systems can forecast

for 365 days out throughout the day

• Obtain future visibility into your market and

share performance across all distribution

channels and segments.


ON THE BOOKS

• On the Books

– By segment

• Analyze stay patterns and trends

at the Market Segmentation Level

– Are you reaching your intended target?

– Are they paying the rates you thought

they would?


DEMAND OPTIMIZATION


TYPES OF DEMAND

Elastic Demand Affected by price

Inelastic Demand Price insensitive

Seasonal Demand Fluctuates based on time of year

Stimulated DemandStimulated by marketing

campaigns


DEMAND OPTIMIZATION

• Who is coming to your hotel and why?

• Patterns shift randomly—study daily, weekly, monthly.

• Identify demand periods by date in accordance to your

forecast and discuss how to optimize each date.

• Select the best pieces of business based on demand

periods.

• Define goals, create strategies with those in mind.

• Include Sales, Distribution, Marketing and Operations.


IMPLEMENT STRATEGIC PRICING


PRICE STRATEGY

IMPLEMENTATION

• Annual (baseline) strategy

– Segments

– Fair / event periods

– OTA rates

– Corporate / TMC / Consortia rates

– Promotions, offers, specials

• Budget revenue and occupancy goals


PRICE STRATEGY

IMPLEMENTATION

• How does your RMS support …– Derived and dynamic rates

– Last Room Value translation

– Rate controls

– Occupancy-based rate adjustments

– Profile controls

– FPLOS (full pattern length of stay) vs daily pricing strategy

– Group pricing strategies

– Inventory controls

– Overbooking

• Who makes pricing decisions?


ALTERNATE PRICE STRATEGIES

• Address forecast adjustments

• Apply rate fences to control– Restrictions must meet

to receive a rate

– Implemented via a hotel’s RMS or directly into the hotel’s CRS


RATE FENCE OPTIONS

WHEN

• Low periods

• High periods

• Marketing programs

• Special events

• Holes between event dates

• Empty weekends or

weekdays

• Too many check-ins or

check-outs

TECHNIQUE

• Source/Channel restrictions

• Stay patterns

• Min/Max LOS

• Full pattern LOS

• Stay through

• No arrivals or departures

• Inventory controls

• Loyalty


DERIVED RATES

Rates that are dependent on a base rate

Established as a % or value of base rate

System automated and dynamic


DERIVATIVE RATES

RATE

TYPEFORMULA BAR 1 BAR 2 BAR 3

BAR --- $180 $160 $140

AAA - 10% $162 $146 $126

AARP - 15% $153 $136 $119

Weekend + 15% $207 $184 $161

Spa Pkg + $120 $300 $280 $260

Nat’l Acct - $15 $165 $145 $125

Local Acct - 12% $158 $141 $123


DYNAMIC RATES

CONDITION FORMULA BAR 1 BAR 2 BAR 3

BAR --- $180 $160 $140

80% Occ + $5 $185 $165 $140

90% Occ + $15 $200 $180 $155

95% Occ + $25 $225 $205 $180

5+ nights - 15% $153 $136 $119

8+ nights - 25% $135 $120 $105

>30 days out - 20% $144 $128 $112

<7 days out +10% $198 $176 $154


IMPLEMENT STRATEGIC CHANNELS


TRADITIONAL

• GDS—Global Distribution System

• Online Travel Agencies

• Wholesale Tour + Travel

• Email marketing

• Print Advertisements

• Reservations Call Centers


“NON TRADITIONAL” CHANNELS

• Device specific promotions

• Metasearch sites

• PPC search campaigns

• Video (Vine, YouTube)

• Retargeting Campaigns

• Social networking sites


SOCIAL MEDIA

• Word of Mouth = Socialnomics

• Average consumer checks 12 website before buying hotel

• 93% of shopper’s buying decisions are influenced by Social Media


SOCIAL MEDIA

Watch Video

• Watch “#Socialnomics” on Youtube

• Video by Erik Qualman predicts the Social Media Revolution in 2015


SOCIAL MEDIA—VIRAL EFFECT

Watch Video

• Watch "DollarShaveClub” on Youtube


SOCIAL MEDIA—VIRAL EFFECT

• www.dollarshaveclub.com crashed within 2 hours of posting video

• 12K orders in two days

• Currently over 1 Million active members

• Video has over 17 Million views, won the “Best Out-of-Nowhere Video Campaign” in 2012

• “DollarShaveClub” is an example of how businesses can utilize social media for marketing


SUPERIOR CUSTOMER SERVICE


CUSTOMER FEEDBACK

Watch Video

• Watch ”United Breaks Guitar” on Youtube


CUSTOMER FEEDBACK

• “United Breaks Guitar” is a negative example of how social media can impact a business

- Within 3 days video had 500K views

- 6 weeks, 5 Million views

- 10 months, 10 Million views

- Aired on CNN, NBC, CNBC, Fox News and more outside of the US

- United Airlines share value dropped 10% or an estimated $180 Million

- United Airlines eventually hired Mr. Carroll and now use his video for training


SUPERIOR CUSTOMER SERVICE

• Social Media = Preventative Behavior and Direct Marketing

– TripAdvisor

– Yelp

– Facebook

– Twitter

– Youtube

– SnapChat

– Instagram

– LinkedIn

– Vine


ONLINE REPUTATION MANAGEMENT

• Monitor online reviews

• Proactively respond

• Sentiment Analysis

• Competitive Intelligence

• Monitor Social Media

• Reports + Dashboards


MONITOR AND REPORT


MONITOR AND REPORT

• Performance Data analysis

- Weekly pace report

- Daily pick up reports

- Forecast validation

- STR reports

- Monthly reports


MONITOR AND REPORT

• Performance data analysis

• External relationships- Counterparts

- Visitors bureau

- Trade magazines

- Blogs

- Business journals

- Online reviews

• Relate back to forecast


THINGS TO REMEMBER

• How can revenue management positively and

negatively impact revenue?

• How can customer service impact the revenue

optimization cycle?

• What are fences?

• How can you use your forecast to be strategic

and proactive?


PARTNER—STEVEN RUBIN

Steven is the founder of TRI Hospitality,

Inc. He has global experience leading

revenue, sales, marketing, digital, and

operations teams. Steven’s experience

in online travel and revenue management

includes creating a Regional Online

Marketing Position for Kimpton Hotels to

developing and launching a new global

online travel business for Travelzoo. He is

on the advisory boards of multiple

technology companies, working to build

the next generation of travel experiences.

Steven is also an Adjunct Professor at

NYU, and an active member of Travel +

Social Good and HEDNA.

A believer in test-driving the wisdom of the ages, Steven immerses himself in

scientific research and popular culture lessons about how to be happier. And it’s

working—happily married and well traveled, Steven is also an elated new dad. He

received a BA in Hotel and Restaurant Management from Washington State

University, and a Certificate in Marketing Management from NYU.


PARTNER—MIRIAM GROSS

Miriam has successfully planned and executed multi-million dollar campaigns for

multiple brands, including two campaigns that won coveted HSMAI Adrian Awards.

Miriam holds a Bachelor’s Degree in Hotel Administration from Cornell University.

Based in the bay area, Miriam is a frequent runner and an avid traveller aspiring to

be a semi-professional food critic in as many global locations as possible.

Known for her understanding of the

interplay of digital channels and consumer

behavior as they come together to drive

revenue and awareness for hotel

companies. Miriam develops digital

marketing strategies that meet cross-

departmental needs from loyalty and

digital marketing to revenue and finance.

While overseeing strategic accounts at

HeBS Digital, Miriam worked with Red

Lion Hotels to launch a new digital

experience, revamped marketing

programs, organization wide field

marketing structure and technology stack.


PARTNER—CHRISTOPHE SABINEU

Christophe Sabineu is a recognized

Revenue Management expert and

entrepreneur. Originally from France, he

started his career in hotel operations and

marketing. He was a founding partner at

Revinate Inc, which is the world-wide

leader for Online Reputation and Guest

Intelligence for hotels and restaurants.

With a focus on education and data-

driven decisions, Christophe has

been a leader at implementing new

methodologies and tools at companies

such as Accor Group, Denihan Hospitality

and Kimpton Hotels.

Christophe graduated from the Ecole Supérieure des Sciences Commerciales

d’Angers (ESSCA) and received a Master degree in Hotel Revenue Optimization

from the Faculté d’Angers. Passionate about big data and continual growth, he is

currently enrolled in the Data Science program from John Hopkins University. During

his down time, Christophe can be found windsurfing or stand up paddling down the

coast of Northern California.

THANK YOU

CONTACT INFORMATION

[email protected]

[email protected]

[email protected]

mailto:[email protected]

revenue optimization metamorphosis by tri hospitality

Leadership & Management

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