Revenue Management Case Study
Per-Anders Pettersson
Revenue Manager
First Hotel Reisen
"I would like to start this case study by explaining the pre-work we had to undertake before we could think about working effectively with the EzRMS™ solution from EasyRMS.
"The Installation Questionnaire we received from EasyRMS during our introduction course was the start of the ‘cleaning up’ process within all of our computer systems and the standardization of all of our in-house routines and procedures i.e.
- Bad Data
- Being comfortable with selling High Rates
- Being comfortable with selling Low Rates
- Cancellation Policies
- Competition Analysis, both for the Revenue Management process and for the Sales process
- Corporate Agreements and Group & FIT Routines / Procedures
- Special Events
- Full House Management
- Implementation of Revenue Management Meetings
- Implementing Yield Strategies, i.e. ABC-Days, Stay Controls etc.
- Individual Coaching, Selling Techniques, Argumentation Techniques
- Market Segmentation
- Profiles, Company, Travel Agents, etc.
- Rate Categories
- Rate Codes
- Source of Business
- Tracking of Denials
- Training for all Reception Staff, Reservation Staff and the Sales Manager
- Turn Away Strategies
- Up-Sell Strategies
"We completed all the necessary actions required to get correct Statistics and Forecast information from EzRMS™. The most important tool / process is of course the training of staff. Training is an ongoing process due to the very high turnover of staff within the hospitality industry. It is also an easy way to motivate our employees in their work – Knowledge is power and helps greatly in this type of motivation process!
"During the preparation period we were not able to work effectively with EzRMS™ until all this data had been corrected / put in order within our PMS system.
"In May 2001 we started to see that our own manual forecasting was very close to that recommended by EzRMS™ and that the results came very close between the manual and automated methods.
"Full House Management increased immensely and the Occupancies increased to over 95% as a monthly average. Following the EzRMS™ ’Bid Prices’ we were confident in lowering the rates and therefore also gained valuable Market Share from our competitors at those times. We are also sure that there has been less revenue displacement within the hotel due to our newly adopted Revenue Management strategies and are more confident now in denying business and waiting for the "higher paying" business than we ever were.
"We now know what business we have on-the-books today. We are able to plan well in advance the different campaigns and promotion requirements, we also look forward and anticipate our sales controls up to 1 year in advance. Actions / controls are now set far more easily within the PMS and other distribution channels and the understanding that it is us running / controlling our business and not the clients / guests that are controlling it for us has finally arrived.
"If we take a look at the Total Revenue in the Hotel compared to the period of January to July of last year, we clearly see that we have made more money (and of course more profit) even if the RevPor value has decreased (an increase of more than 5 Million). We do not concentrate on RevPor anymore as indeed, by focusing on RevPar, we can ensure higher profitability at the end of the day and ultimately, more money in our bank account each month.
For a breakdown of ‘true’ results due to the use of Revenue Management and the EzRMS™ Solution, please click the image below for an Adobe PDF file 47kb.
"The focus on Revenue Manag ement has not only been within our hotels, but has also has started within our Corporate Sales Department. Our Sales Managers attended one of the EasyRMS training sessions in order to fully understand the background of Revenue Management decisions which are taken at the hotel level. We also have internal meetings in order to create a better understanding and to develop detailed Revenue Management Strategies with both our internal and corporate sales departments on a regular basis.
"It is a very simple process to sell rooms at a low rate – the technique and expertise is to sell the room for the right price, at the right time, to the right customer for the correct duration.
"To conclude, the EzRMS™ Revenue Management Solution has without a doubt worked wonders within our hotel environment. As the name states, EzRMS™ is indeed “EASY”. It has proven to be easy to work with, easy to understand, easy to update, to be an excellent tool for forecasting, to assist in staffing schedules within Housekeeping, Front Desk, Reservations and so on.
"It is a Decision Support Tool that has without question helped us immensely in achieving our goals, increasing our revenues and keeping our business practices and routines firmly in order.
"EzRMS™ helps to convince the Revenue Management Team (and myself) the correct times and levels to Overbook, to sell Campaign Rates, to Close out our Low Rates etc due to the extended pick-up times and quality of data provided.
"I really do feel that the entire business process within our hotel is strongly enhanced by not only the entire Revenue Management process but also by the assistance and support given to us by Easy (Ez) Revenue Management Solutions."
Per-Anders Pettersson
Revenue Manager
First Hotel Reisen
