What’s the toughest part of hotel rate management today? Although they come from two separate departments, both Andy, a SkyTouch property advocate, and Chuck, a programmer and analyst, agreed the hardest thing to manage is: setting the perfect and elusive BAR—your best available rate. “It’s elusive,” said Andy, “only because of the bookings cycle. If you change your BAR drastically, that literally is going to push or pull rates up or down across the spectrum, if everything is connected correctly, and that’s the key in effectively managing your rates.”
Chuck added that the number of channels consumers can book rooms through can complicate the process. “Today, there are so many different avenues for people to make a reservation,” he said, “so many different booking engines, so many social engines. These channels divert numbers from hotels.” Worse than window shopping, the many channels allow for real-time consumer comparison of rates, often without the brand standards of a hotel’s own website to help distinguish one competitor from another.
It’s very competitive,” said Chuck. “We have a property in Las Vegas that is competing against a number of properties in his area, mainly against a property that’s across the street. And he’s checking his rates and his competitor’s rates hourly, and adjusting his rates accordingly. Because a dollar may mean the difference between selling the room or not.”
Andy said the channels aren’t the real problem, though, and actually pointed to a solution that’s in the hands of a property’s rate manager: “If that number, that elusive number is set correctly, it really can then lead the way to all these other channels working well for you.” But to even come up with a number, much less the BEST available rate, first “you have to take into account all of the features that you have to offer, everything that’s in your marketplace, the time of year, what’s going on in town, all that kind of stuff.”
Not only that, said Chuck, “Occupancy level is probably the principle driving factor. If historically you expect a certain amount of occupancy for the current week or a month out and you’re below that, you need to do something. If you’re above it, you probably need to do something. Then, there are a number of things that come into play, like your employees, your staff. You’ve got to keep them employed. If you cut back their hours, they might be looking for a job. If they have too many, they may be looking for a job. You want to keep your employees happy. There’s a balance between revenue, occupancy, and costs. It’s a very aggressive business, the hotel business.”
“The bottom line,” Chuck continued, “is that the revenue manager is monitoring what’s going on at his property. A revenue manager will have a budget for a particular month, and they have to hit those numbers or they’re going to be looking for a job.”
Look out for Part 2 of Rate Management Today: Doing More With Less to learn what tools Chuck is helping SkyTouch Technology® develop to simplify rate management and help your hotel pin down the elusive BAR.
