Revenue management requires marginal gains, flamingos
 
Revenue management requires marginal gains, flamingos
19 FEBRUARY 2018 8:21 AM

The notion of marginal gains is as true for the hotel world as it is for athletic goals. Flamingos might also help.

Last week, I attended the Revenue Management 3.0—Where Next? conference in London, at which 200 revenue managers and related folk spent an informative day learning all that this discipline provides and has grown into.

One constant theme was the process of obtaining marginal gains—small, incremental improvements that together add up to something grand.

Some examples of areas to target for small improvements are managing distribution channels, analyzing data and metrics, and employee motivation and organization.

Hotel success is less likely to come from average daily rate suddenly leaping 50% than it is a whole raft of ideas and initiatives that eventually lead to that 50% jump and makes it sustainable.

In my little world, marginal gains first came to my attention via British Cycling and the success of such cyclists as Sir Bradley Wiggins, Chris Froome and Laura Kenny.

Under the watchful eye of Sir David Brailsford (yes, cycling in the United Kingdom has been so successful lately, knighthoods have been handed out with abandon), marginal gains were achieved via practice, bicycle and clothing technology, and even psychology.

Hotels do something much the same, I would hazard, with ideas and success borne from experience and talent.

Revenue management—being such a huge discipline in the hotel world, one focused on by any number of third-party solution providers—is ably served by the execution of marginal gains, and the conference suggested many ways of speeding around the velodrome, so to speak.

Keynote speaker Fernando Vives, chief commercial officer at NH Hotel Group, said following a strategic revamp of his firm’s distribution and pricing strategy more than two million changes were made to the Spanish company’s database in less than seven months.

Vives added the group also released almost one million room nights on a less profitable basis, as opportunities in segmentation and to shift focus to sustainability lead to more profitability.

Marginal gains.

One interesting fact from Vives was that 3 a.m. is the business booking hour for his company’s hotels in Rome, which he said makes sense considering that’s 8 p.m. on the Eastern Seaboard in the U.S.

“Should we have revenue managers in place at 3 a.m.?” he asked.

Again and again throughout the conference, the term “marginal gains” was used.

Speaker after speaker received an introduction, as they got up onto the stage, which ended with some superb athletic achievement either completely or in the works.

Chris Penn, co-founder of Steel Hotels, has swum across the English Channel; Stephanie Gosling, head of revenue, Amaris Hospitality, is training for a half-marathon; Charlie Osmond, CEO of direct-booking platform Triptease, recently came second in the Death Valley Marathon; and George Titlow, from Hotel News Now’s parent company STR, is training for his first marathon.

Time to get your revenue management teams, and all other employees, in the saddle?

Dream job?
My interest in birding has not gone without mention in my weekly column.

My latest find to add to my species list for the U.K. is a little bunting (Emberiza pusilla), a rare vagrant that should be in Northeast Europe and Asia but turned up in Walthamstow Reservoir No. 1 in Tottenham Hale, London.

So it is with interest that I see the Baha Mar resort in the Bahamas (yes, a little more exotic birding destination) has advertised for a CFO—not someone interested in marginal gains, but in brine, shrimps and ecology, as the “F” stands for “flamingo,” not “financial.”

I was tempted to contact the human resources department but then saw my amateur interest would not be worth a feather as the post requires a Ph.D. in zoology or some such similar academic prowess.

I hope the lucky applicant has much success safeguarding this beautiful, iconic species, but as someone who saw a dozen yellow-throated warblers (Setophaga dominica) very close to the resort when I visited it in 2008, I hope she or he does not neglect other life forms.

I should add—and this is when the idea of marginal gains might finally have vaulted the geek-dom threshold—that the yellow-throated warbler in the Bahamas has now been split into its own full species, the Bahama warbler (Setophaga flavescens). So again, I hope the new chief flamingo officer keeps an eye out for all species, resident and passage, that decide to call Baha Mar home, and not just ones generally enjoyed by guests and tourists.

Email Terence Baker or find him on Twitter.

The opinions expressed in this blog do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.

2 Comments

  • Christy April 20, 2018 9:17 PM Reply

    For the love of God, keep writing these artislec.

  • Christy April 20, 2018 9:17 PM Reply

    For the love of God, keep writing these artislec.

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