Creating a Revenue Management Culture

May 10, 2016 navisadmin

Eventually, everything connects – people, ideas, objects. The quality of the connections is the key to the quality per se.”

Charles Eames

A Common Hospitality Situation

Crystal Mountain Resort, a popular family-run property in Michigan with 247 privately owned cottages, condos and homes, found itself in an all-too-common situation.

Marketing was creating high-volume promotions through the likes of TravelZoo and Groupon. However, the marketing team did not have access to forecasting details or profitability and revenue goals. The desired (but the less profitable) objective of these campaigns was to fill room nights. In the absence of clear communication between departments, the reservations team was completely unprepared for the volume of inquiries that were driven by these promotions. As such, they were not able to fully utilize guest data or capture information about the guests that opted not to book right away. Given the abundance of requests the offers were attracting, this information would have been extremely valuable in crafting better marketing promotions and reaching out to these guests with more personalized (and profitable) offers. Essentially, the sales, marketing, and revenue management teams were working in silos without aligning their goals and expectations.

A Solution via Revenue Management Professional Services

As Eames’s philosophy suggests, not only is creating connection necessary, but the quality of the interaction—the strength of the alignment—is essential to the success of all three departments, and further, to the success of the entire organization. Crystal Mountain partnered with NAVIS to help them create solid communication and shared goals via NAVIS’s interim Revenue Manager Professional Services. This decision would help them grow their business while they searched for a permanent Revenue Manager, who would carry over the progress in the long-term.

The NAVIS Revenue Management Professional Services team began by strengthening the communication between the three departments through revenue management meeting agenda best practices, which increased participation and accountability for the team. Additionally, compliance reporting and training for the reservations team regarding guest data collection was introduced.

On the rates and inventory side, the NAVIS team successfully:

  • Implemented dynamic pricing based on demand data from Narrowcast and unit type.
  • Restructured PMS rates and packages to implement dynamic pricing and streamline the sales process for increased conversions.
  • Established a forecasting process.

The Results of Revenue Culture

Crystal Mountain’s strategy and culture has shifted. Forecasts and guest data now drive all marketing activities. Goals are revenue focused, and highly collaborative communication has been established between sales, marketing, and revenue teams. They are now able to send personalized offers to drive more direct business and reduce their reliance on 3rd parties.

As a result, Crystal Mountain Resort experienced record profits with an increase of $464,000 in incremental revenue over a three-month period during the summer of 2015. Their STR (Smith Travel Research) RevPAR Index reached 122% with RevPAR up 8-45% compared to the prior year, and ADR is up 7% (+$15).

Creating a successful team culture of this caliber begins with ensuring connection—drawing the lines that bring sales, marketing, and revenue together. It also requires strong leadership with an emphasis on revenue management, one that empowers everyone to work together to achieve a common goal.

 

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