Is it really a good idea to hire a Revenue Management agency?... Yes, even more so during the post-COVID period.
Undoubtedly, these difficult times have revealed many areas of opportunity and weakness for all types of hotels, including those that manage their revenue management strategy, agencies that are responsible for providing this service, and even revenue management software providers.
It is now a much more competitive market, which moves quickly and hotels must be more intelligent and respond soon. It is this ability to be prepared for any situation, which significantly reduces risk, that should become a top priority. Hotels need to completely rethink their business scheme, and this is where the hiring of external agencies is the key to keeping us up to date and preparing us for any problem. Thanks to the fact that there are agencies such as Golden Collection Hotels where, with our experience in Luxury Hospitality for more than 10 years, we are ready to offer the best of our wisdom to guide our clients to stand out against any economic recession, pandemic and other causes of force majeure.
This is where we believe that opting for an external service to manage your hotel revenue management can lead you to success, especially today, where we have to act expertly and efficiently to outperform competitors by positioning your Hotel and generating more revenue. conversion.
Our Luxury Hospitality Atelier is always available and ready to listen to the needs of your Hotel, contact us so you can learn about the different ways in which we can help you.
Even with all the comparable experience of certain agencies, a very common question that we constantly hear when talking to industry partners is: Are Hotels really willing to trust their strategies to a third party?
Many hoteliers emphasize to us that such a delicate and key part of the success of their Hotel, such as revenue management, should not be left in charge of an "external" agency. And to this, we almost always answer with one of the following questions: Does your Hotel have a Lawyer or an Accountant? Aren't these also external service providers? Why is this data not managed internally, since it is of a very sensitive nature?
Usually, the answer to this boils down to the fact that these skills cannot be taught or hired internally, due to the cost and level of experience they require. These are very specific skills and it is better to rely on specialized service providers such as law firms and accounting consultancies.
Well then, it is this same reasoning that would justify contracting external services through a specialized agency for your hotel.
The only question that remains is, "Why not hire a revenue management agency?"
So Hotel friends, we invite you to review some of the key points that we provide in this blog:
What are the most common mistakes of a Hotel?
Why hire a revenue management agency?
What are the advantages?
Why an agency and not a freelancer?
What are the most common mistakes of a Hotel?
As we mentioned before, the initial reaction of many hoteliers is often negative, which is understandable, however, the key answer is the premise stated above, and that is that if we are willing to outsource specialists in areas such as accounting, legal and human resources, but then, why refuse to receive the help of a professional to improve our strategies in order to obtain more income?
Why? That is the question, it seems to be more a response to an emotional impulse of fear or lack of confidence, rather than a logical reason based purely on the needs of the business. And unfortunately, there are still hotel directors and managers who think that due to their skills and strategic vision, they are perfectly qualified to manage the revenue management strategies of their hotels and this is the most common mistake.
But to this statement, I allow myself to add my perspective, and from a more objective point of view, I ask my hotel colleagues the following: How can someone be considered a specialist? What is required in terms of skills or technical qualifications? What qualifies someone as a Revenue Management Manager?
A common misconception is that this job is just about changing a few rates here and there, which is a common misconception among the hotel community. And even if this were the case, what is dictated by changing prices, although it is nothing more than a series of analyzes and metrics that add complexity to the work, for which a certain level of knowledge is required in revenue management, otherwise it could generate losses, price resistance, sales stoppage and even damage the hotel's image.
On the other hand, we can incorporate the vision of Directors and committee leaders such as the human resources manager, the commercial director, or even the CEO, and together they could have a great philosophical conversation about performance management and business vision, even so, this would not provide them with "the answer" or the "technique" to carry out the tasks of Revenue Management. In reality, this criterion is left to the person who has the appropriate experience and skills to perform this important function.
Up to a certain point, talking about Revenue Management is quite easy, anyone can learn to talk with the terminology and discuss interesting concepts, really anyone who has read about the subject can "opinion" to a certain extent, however, the question we must ask is What skills does the candidate have? What are your success stories? And more importantly, does your strategy and profile coincide with the particular needs of your hotel? This last one is probably the most relevant question since a Revenue Management strategy for a City Hotel is not the same as for a destination. of Beach, a Business Hotel, then a Resort or a Boutique Hotel.
This can become a great challenge, especially in the case of independent hotels, where there are few human resources and a limited budget for hiring internal staff. How can a CEO who has never been a revenue manager, who has never worked with a CRS, who has never used a Channel Manager, and who has never analyzed segment acquisition curves or performed displacement calculations, be a good Candidate for a Revenue Manager position?
And then comes the next challenge. How could you really supervise a Revenue Manager? Verify that the quality of your work as well as your methodology is correct for your Hotel. And this is actually quite an important job as it is quite easy to make small mistakes which if not discovered could cause a loss of income and if you don't have enough staff then in many cases this job isn't usually done. audited.
So, you as owner or Hotel Manager, how will you manage the work of this person, if you don't know what you are doing? Will he simply trust that he is doing it right? Do you really want to trust one person's judgment, especially if they don't really even understand what they're doing? And how will you help your Revenue Manager further develop their skills? In fact, Revenue Managers working in independent hotels often complain of feeling misunderstood and not having enough internal support to further develop their knowledge, ideas, and techniques.
Therefore, we have learned that the 5 mistakes that the Hotel makes are:
How can you control a revenue manager effectively if you haven't been one yourself?
Specific skills are required and you must rely on the experience and views of more than one person
Finding the right person, as employee turnover tends to be high and few Hotels have the resources to train successors
They do not have a team with the sufficient and verifiable experience to create a specific proven strategy for the success of your Hotel
To all these refusals, the answer is clear, let's open the possibility of contracting an "external" Revenue agency; in fact, we do not consider the word "external" to be the correct word either, since it carries with it a connotation of distance or distance, rather we chose to call it "Atelier de Revenue". For Golden Collection Hotels, this skill is more of an art that we carry out together with the Hotel, so we are the "Artist" and the Hotel becomes the "Canvas" turning our service into a relationship that, although professional, is also becomes a mutually beneficial relationship for both, this is one of the many services that we perform as an integral part of the hotel's management team and we help not only in the management and distribution of revenue but also in strategic decisions in other areas, from marketing to activities in operations and customer service.
Our art in Revenue goes beyond optimizing revenue, we also help our clients better understand their business, team performance, and brand positioning.
What are the advantages of a Revenue Management service?
Although we have already talked about the most common mistakes that hotels make when trying to meet the specific needs of filling these positions on their own, now is the time to understand what are the benefits of contracting these services with an agency, such as Golden Collection Hotels.
Infrastructure
An important advantage that we offer to our clients is our infrastructure. We have at our disposal a team of hospitality professionals, all with different specialties, ranging from pricing strategies, distribution management, e-commerce, data analysis, and statistics. In such a way that according to the needs of a Hotel, we can support them in a complete and integral way, covering their deficiencies with our knowledge, skills, and above all the experience to raise their income to the next level.
Multiple functions one cost
Finding external staff to optimize your hotel revenue is not easy and definitely not cheap.
The shortage of revenue managers is a real problem in the industry, especially in the case of independent and small hotels, since both the budget and the process of hiring the right profile come into play.
That is why Golden Collection Hotels offers specialized services in Revenue Management from price management, competitor analysis, forecasts, and budgets developed by our experts at an affordable price, and with the guarantee of being developed with the highest industry standards. at all times.
Years of knowledge, and multiple angles
At Golden Collection Hotels we work as a team, communicating, providing feedback, and reviewing our decision-making between revenue managers, sales managers, and our directors. This enables proper checks and balances, without depending on the opinion of a single person. An independent hotel will get the same level of support as a property that is part of a large international hotel chain.
Savings in personnel management
In many Independent Hotels, the Front Desk Manager or Rooms Division Manager is the one who assumes the role of Revenue Manager in addition to their full-time role. Unquestionably, assigning something that is actually already at least a full-time position affects the manager's ability to fulfill their day-to-day responsibilities. That is why we believe that by delegating these specific tasks to an external team, you can help alleviate the workload of staff or save having to hire additional staff to perform these functions.
Complexity
Decision-making in revenue management is influenced by many different factors, and this is what makes it such a complex specialty. Most independent hotels are losing revenue, which typically includes untapped potential in more than one of the following:
Rate opportunities (eg, hotel type, season, delivery time, targeting, room type, weekday patterns, review score)
Outlets income (food and beverages, meetings, incentives, conventions and fairs, spa, etc.)
Economic and market fluctuations
PMS (Property Management System) /POS (Point of Sale Software) /CRS (Central Reservation System) opportunities
Organizational challenges and structural changes
And many more…
Unmatched financial performance
Finally, quantifying the economic benefits of having a revenue agency can be complex, especially considering the many factors that come into play when it comes to successful revenue management. However, almost all hotels can undoubtedly benefit from having the right company take care of their operations and revenue management strategy. With the combined power of years of experience, trusted methodologies and best practices, analytical capabilities, and a proven track record even during economic downturns, the Golden Collection Hotels team is able to craft solid revenue management strategy and execution for the best results. possible financial results.
Why external revenue management could fail
Hotels need more than just a system or person who simply checks the numbers, and they require more than occasional and boring generic reports to really understand how their business is performing. Without the proper guidance and knowledge, hoteliers miss out on the essence of what it really means to be a business, whether it's generating revenue across the board, looking beyond KPIs (key performance indicators) like ADR and RevPAR, or aligning all departments in an effort to deliver quality results in terms of marketing, sales, and operations, all in a motivational and goal-oriented environment.
Operating without an aligned focus and strategy is like having different departments working with a compass pointing in opposite directions. When the (external) revenue manager is not able to involve and motivate other hotel stakeholders to achieve the objectives, all the initial effort is wasted. Automatically, the established objectives are in danger due to the lack of communication and the incompetence of the parties involved in making decisions for revenue management. For this reason, above all, it is essential that revenue management practices are implemented in parallel with other departments, keeping an overview of trends and fluctuations in performance to maximize potential.
Betting on a fully integrated methodology and, essentially, becoming part of the hotel team, which is the way we approach this service for our clients at Golden Collection Hotels, is the key to the success of any type of revenue management outsourcing.
Our ideas often resonate well with owners, investors, and investment funds who have a clear mission and vision of where they want to take their business. Innovative hotel managers who want to break boundaries often agree with us.
Are you interested in boosting the financial performance of your Hotel to unmatched levels with a fully integrated collaborative approach?
Look no further, Golden Collection Hotels is here to provide you with the service and experience in Revenue Management you need. Contact us and get a free evaluation. World-class experts at your fingertips!
