Hoteliers are finding difficulty controlling rates because they face a different market mix than that of 2007, when profits were peaking, according to Greg Cross, Hyatt Hotels’ senior vice president of revenue management, in a recent HotelNewsNow.com article.
Cross has been tasked with taking the hotel ownership, management and franchising company’s revenue management strategies to the next level. He has said that revenue management is simply an evolution of “what hoteliers called ‘hotel management’ 30 years ago–finding the balance of occupancy and rate.”
Cross said technology can help revenue managers see opportunities further in advance and pull together myriad reports and data quicker than ever before.
Cross also addressed a number of hot-button issues affecting hotel revenue managers:
- Occupancy or Rate? Occupancy has returned, but pricing power has not returned to all markets. The market mix is different now than it was in 2007, when profits were at their peak. In addition, wholesale businesses continue to diminish pricing power.
- Shifting Channel Mix: Cross said Hyatt uses technology to better understand where demand is coming from at any particular time. This helps them place inventory. High-quality data makes forecasting easier and improves decision making.
- New OTA Sites: New online travel agencies do not yet play a role in Hyatt’s distribution strategy. Some of the more recently introduced channels such as Groupon were tested, but they do not play much of a role either.
- Corporate Directives: Over the past few years, Hyatt has changed its corporate revenue management structure. While there used to be more directives from corporate, executives now understand that revenue management processes belong at the hotel level.
Click here to view the complete HotelNewsNow.com article.
MCB has over 35 years of Hotel Accounting experience. Contact an MCB Adviser today at firstname.lastname@example.org or call 703.218.3600 to discuss your hotel accounting and tax needs or to receive a proposal for your next financial statement audit. Join us at the 1st Annual BisNow Lodging Investment Summit May 9-10 in Washington, DC.