Myths About Revenue Management

Are you trying to circumvent TRM (total revenue management) through marketing, or even paid advertising? Or do you believe that technology can replace the role of a revenue manager? There are certainly many more paradoxes and myths like these.

I consider one of the biggest paradoxes of recent times (not only) in the Czech hotel industry to be the short-sighted attempt to achieve better performance metrics as quickly as possible by some hoteliers trying to “boost” marketing—or even resorting directly to paid advertising— to mask the fact that they haven’t properly implemented revenue management and that their day-to-day yield management is based more on gut feeling. The second paradox is when another group of hoteliers attempts to use technology—such as implementing an RMS (Revenue Management System), often even while not yet fully utilizing their existing PMS—to compensate for the absence of a revenue manager position.

It doesn’t matter right now whether you belong to one of the above-mentioned groups of hoteliers, neither of them, or even both. Sometimes we’re simply looking for more and more ways to increase the profitability of our hotel, and, lured by the promise of an “easy and quick” solution, we just give it a try. But you can’t build a house starting with the roof, and whether we like it or not, eventually we’ll be brought back to the missing foundations. Hotel technology and marketing are great tools for delivering our service or product to our clients/guests. And there are differences here. You can zip along on a local train between towns, drive a Škoda on a country road, but you can also switch to the TGV or take a BMW for a spin on the Autobahn.

My colleagues at PHC and I have been thinking about how to help you, hoteliers, as much as possible. For quite some time, we’ve been mulling over the idea of creating a simple guide for operators on how to cleverly combine REVENUE and MARKETING so that it works for you. The size of the hotel doesn’t matter. Quite the opposite, in fact. The smaller your hotel’s capacity, the more acutely you’ll feel the impact of every missed market opportunity. Even with a smaller hotel, you can put on quite a show. Large hotels can better absorb temporary losses, declines in revenue, or increases in costs thanks to their capacity, but for small hotels—which make up the majority in the Czech Republic—the loss of every crown is felt much more acutely.

Join the PHC Academy to learn how to put on a bigger “show” on your hotel’s stage!

There are quite a few paths to greater profitability for your hotel, and it’s great to know how to combine them effectively at the right time. But you need to understand at least the basic connections between revenue, reservations, sales methods, pricing, online presence, effective copywriting, flawless reporting, room category segmentation, budgeting, marketing, and XY other techniques.

Watch the next video from our academy, where you’ll learn, among other things, the key metrics that you—or your marketer—should be tracking. We’ll advise you on what questions to ask when selecting the best partner for managing your marketing and revenue. We’ll give marketers tips on what questions they should ask hoteliers before they even get started. And much more that’s directly applicable to real-world practice. Why? Because marketing follows the “score” set by revenue management. Only then can it fully serve its purpose.