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Revenue Management is probably the most important hotel business process as it allows you to strategically manage demand throughout the year and maximize revenue from each customer segment. It allows hotels to build up occupancy during off-peak or shoulder periods and increase yield on high demand periods.
Room Revenue Management
Moving one step beyond the traditional view of room revenue management that defines it as “selling the right room, to the right client, at the right moment, for the right price, through the right distribution channel”, we focus on the rate with the minimum commission. The starting point for an effective room revenue management is the analysis and generation of metrics and KPIs from the hotels’ historical booking data. The accuracy of this data is paramount to correct market segmentation and accurate forecasting leading in turn to effective dynamic pricing strategies.
- Our revenue management services includes:
- Tailored market segmentation that:
- Promotes direct bookings
- Properly utilised offline/group market segments to increase profit opportunities
- Rationalises OTA contracts to exceed rate parity challenges and rate leakage offenders
- Quarterly rolling aggregated and segmented forecast
- Optimisation of marketing and sales strategy to drive demand
- Dynamic re-evaluation of rates based on a steadily increasing pricing strategy
- Weekly report of sales, key KPIs and comparison to STLY data
Online marketing is a correlative element of revenue management. Specifically, hotels whose these two services are combined, exhibit significant increases in profitability, market share and bookings in low-demand or shoulder periods. In other words, they constitute a synergy that creates a competitive advantage in the hospitality market.
Following the data driven approach of revenue analysis, these campaigns are created on the basis of guest segmentation which can in turn be further analysed down to provide an in-depth understanding of guest demographics and psychographics. This information not only justifies agreed marketing budgets but also determines the effectiveness of different online marketing platforms in order to plan accordingly. Having at their core the element of proactiveness, these campaigns aspire to increase the number of early bookings through targeted offers and successively fill occupancy quickly. On the other hand, they include the flexibility to dynamically adjust according to occupancy levels, thus remain competitive throughout the season.
We offer an online marketing plan which is:
- Specific, with a clearly defined marketing strategy and actions (Social media, website content, Google Ads)
- Measurable, with monthly reports including engagement, followers growth and conversion rate
- Achievable, with realistic goals that do not “over-promise”
- Relevant, with each action being fully justified by the analysis of historical bookings data
- Time-bound, with a specific start and completion dates
Financial controlling is an important aspect of a hotels’ risk management as it monitors the correct functioning of the internal financial relations in order to decide on the effectiveness of managerial decisions. Its aim is to ensure the solvency of hotels’ operations and their undisrupted continuity.
Effective financial controlling entails the daily monitoring of each department’s P&L (Profit & Loss) performance through the identification of cost hotspots, the design of corrective measures and the development of standard operating procedures. Prerequisite to the successful implementation of these measures is the development of a financial control system that is characterised by budget flexibility in order to confront potential deviations. At the core of this system is the preparation of budget processes with reference to planning and execution in the course of budget correction. The finalisation of these processes is followed by their incorporation in training programmes.
Our financial controlling services include:
- Detailed budget for each of the identified revenue and cost centers
- Optimization through the design of budget procedures related to planning and execution
- Supportive role in financial control training procedures
- Reporting and analysis of the monitoring results on a monthly basis
Every new hotel project starts with an idea and is followed by rigorous planning and an accurate execution strategy that should take into close consideration all relevant factors. It is a fundamental prerequisite step since it includes all the essential elements of the business and then provides the answer to whether these essential elements are achievable.
Taking into consideration all external and internal factors that affect the planning process of the new hotel project, our feasibility studies set to propose the most suitable type of development through a financial forecast of both revenue and costs. They are conducted on the basis of a discounted cash flow valuation methodology (DCF) that incorporates the parameters that affect the expected cash flows and discount rates (e.g. room types, number of personnel). Apart from a Profit and Loss (P&L) statement that breaks down to its detailed individual counterparts, our feasibility studies include a review of current and forecasted market conditions as well as the hotel’s immediate competitors.
We conduct feasibility studies that have a:
- Clear project scope that defines the parts of the business that would be affected either directly or indirectly
- Formal review of market conditions based on valid
- Solid methodology (Discounted cash flow valuation (DCF)
- Detailed evaluation and cost summary