What is the key to success in Revenue Management? Even if you have all the proper tools and the right team behind you, is that enough to yield maximum results? If you were to look back on the evolution of First Hospitality Group, you’d know that in the beginning revenue management was only executed by small teams of Regional Operations and Sales for just 17 hotels. Over time, we came to realize that one of the biggest areas of opportunity in our industry was refining our revenue strategies: monitoring, restricting, having the right pricing strategy, knowing the hotel vs. market – the list goes on.
Since then, we’ve grown our revenue management department from one to a very robust team of six. Our strategies have become so much more complex than they ever were before. Revenue Management used to be responsible for just what the title suggests – managing revenues – demand, pricing, etc. Now, it’s connecting the dots; revenue management has become the hub of everything. With Corporate Director of Revenue, Jenna Smith, in place we have been able to maintain a team that is inspired to ask so many of the questions posed below and diligently seek out answers.
There is now a critical marriage between sales, marketing, and revenue management that didn’t exist before. Online reviews reflect how confidently we can price. There is absolutely a premium on consumer sentiment – price often takes the back seat if our product is valued. Strategy has to be deliberate and consistent on all channels. You have to understand how to access those channels armed with the knowledge of which will be the most profitable for the hotel. How are we reaching the most relevant audience? How do they want to book?
Do we understand what the consumer values? What is the price value comparison and how can we market that in the most successful way? We have low demand strategies executed by revenue management including but in no way limited to prospecting, implementing cost per click placement optimization, and leveraging our market knowledge to understand competitor activity. The objective went from solely managing revenues to asking ourselves “how can we assist in generating revenues in a bigger way?”
Are the revenues coming in as forecasted? Are we forecasting correctly? Are we falling within a 3% margin of accuracy? What channels are open or closed and how is that impacting us? Is our website optimized to convert? These are all questions that our regionals have to ask themselves when trying to assist in generating revenue. We are only able to uphold an effective team by instilling the principle that nothing falls outside of their job description. In my mind, once you’ve got the right people supporting you, the key to success lies in the relationship that those people have with each other.
If we are not connected and aligned on our most crucial objectives, then we are not the best team that we can be. As we continue to develop, we are in the process of cross-training all regionals to understand the work of each of their counterparts and how it impacts the big picture. As a result, we’ve been able to grow 2.4% in RevPar index YTD, all of our city center hotels are #1 in RevPar, and over 50% of the remaining portfolio own the #1 and #2 rankings in their markets. We firmly believe that we can operate most effectively when the silos are broken down and we are fully emerged in a collaborative environment. As we continue to grow, our teams are rising to the occasion and we have never been more proud of those powering Team FHG.