Revenue management: From resort fees to rooftop bars
 
Revenue management: From resort fees to rooftop bars
16 JANUARY 2018 8:42 AM

This roundup of news takes a look at articles from the past six months on the topic of revenue management.

REPORT FROM THE U.S.—From resort fees revenue to creating the best return on investment for a rooftop bar, revenue management is a popular topic of conversation among the experts in the field, as well as hoteliers and others in the industry in general.

For a look at recent trends and talking points, Hotel News Now gathered a variety of stories from the last six months on the topic of revenue management. Take a look below:

One area that hotel owners and revenue managers are applying more scrutiny to is revenue from resort and facility fees, which in many cases were expected to rise in 2017.

A study from Bjorn Hanson, clinical professor at the Tisch Center for Hospitality and Tourism at the New York University School of Professional Studies, shows total lodging fees and surcharges reached $2.6 billion in 2016. At the time the article was written, Hanson predicted that fees and surcharges would reach a record $2.7 billion at the end of 2017, with the largest increase in cancelation fees.

Here’s why Hanson thinks fees are increasing each year: “One is more occupied roomnights, so the increase is approximately 5% … 40% of that increase came from there being more guests. The second component is the combination of more categories being charged and the amounts being charged.”

Considering their growing role and importance to the industry, hotel revenue managers are being underpaid, recent research from Aethos Consulting Group concludes.

The research shows the hotel industry has “a disconnect at so many levels” when it comes to compensating revenue managers, said David Mansbach, managing director at Aethos and primary author of the study.

“It’s one of the core competencies companies need to seriously look at and re-evaluate,” he said.

The effect of rate parity on European hotel distribution was top of mind for hoteliers last year, and Hotel News Now caught up with four European revenue-management experts to get their take on the debate.

Joanna Schröder, VP of revenue management at Deutsche Hospitality, said the rate-parity clause and changes presents a challenge for hoteliers. “While rates on OTAs may differ, the OTAs still need to have the same rate as the hotel’s webpage,” she said.

Meanwhile, data and technology have somewhat leveled the playing field for hotel revenue managers, sources said, allowing them to be creative with their strategies.

“The only differentiator there has to do with being able to outsmart that competitor,” said Raul Moronta, SVP of revenue management at Crescent Hotels & Resorts. “And I think that no matter what, that will never go away, because technology … has equalized everybody the same way. … But even as technology continues to grow, people still find ways of outhustling somebody else. That passion of a revenue manager I think is what makes the difference of a successful hotel and an unsuccessful one.”

When revenue managing a hotel’s rooftop bar, consistency is the key to turning profits and bringing guests back, sources said.

Some hotels might jack up the drink prices when the weather’s nice to bring in additional revenue, but Joseph Adamczak, GM of The Outsider rooftop bar at the Kimpton Journeyman Hotel in Milwaukeee, said the best way to gain repeat customers is by keeping drink prices the same.

“We generally keep our pricing consistent throughout the year,” he said. “We will fluctuate pricing as produce and other products increase in cost, but we rely heavily on repeat guests and don’t want to shock them with regularly increased pricing.”

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