The Parallels of Apartment Revenue Management

The Parallels of Apartment Revenue Management

DALLAS, TX - So you think multifamily revenue management has a tough learning curve? Consider applying revenue management to a hotel property, where occupancy and rates and booking curves change every single hour. Like multifamily, the hotel and hospitality sector is looking for progressive ways to harness revenue management for improvements in marketing spend, operations, and lead management. 

Omni Hotels & Resorts corporate director of revenue management Brenda Gordon joined us today for an exclusive interview to discuss the parallels between hotel and apartment revenue management. Responsible for oversight of the revenue strategies for the Omni brand, and alternate distribution exploration and negotiation and intradepartmental involvement with all brand-wide promotions and packages, Gordon says one advancement multifamily could make right away is to adopt the RevPAR index, an industry standardized measurement of revenue management success. Hi Brenda. What can you tell us about your personal experience with revenue management in the hotel and hospitality sector?

Gordon: Sure, I have 20 years of experience in the hospitality industry, progressively moving from individual property revenue management to corporate leaderships and gaining extensive experience in the industry. Previously I held the position of regional director of revenue management at both Wyndham International Hotels & Resorts and Hilton Hotel Corporation, exceeding benchmarks and increasing revenue for the brands. While at Wyndham, I even earned the “Rev It Up” award for excellence in revenue management. What are some of the bigger developments in the hotel and hospitality industry as it applies to revenue management? Where is the industry trying to push the boundaries?

Gordon: We’re definitely trying to push beyond the barriers. At the end of 2008, we saw significant declines in our average rates as we tried to maintain occupancy throughout the recession. Demand is now back, but we have not seen a similar immediate recovery to our average rates which is probably pour biggest challenge moving forward: how do we get back to previous average daily rate (ADR) highs?

From a revenue management discipline we are looking at distribution channels and our mix of business and marketing effects the overall ADR performance of the hotel—looking specifically at how different distribution systems impact our profitability and insuring that we are taking advantage of high impact, low cost channels. What do offer distribution and marketing channels look like on the hotel side?

Gordon: Certainly you have people who call us directly, you’ve got our branded website, industry online travel agencies (OTAs) including Expedia, Travelocity, Priceline, and Orbitz. We also use global distribution and reservation network systems (GDSs), which is what the airlines use. And what is the RevPAR index in the hospitality industry?

Gordon: This is probably a very interesting measurement for multifamily operators to consider. It is a measurement of performance and success that is basically Revenue Per Available Room. It’s simply taking the rooms revenue that you’ve produced in a given time period and dividing it by the total number of rooms. As an industry, almost everyone reports RevPAR performance to Smiths Travel Research, and we use that as a performance measurement against our competitor set. If we are equal, we’re getting our fair share, if we’re under the comp set average we obviously have work to do, and if we’re over we are getting a better share of the available market. Finally, how does the hotel and hospitality industry deal with real time pricing and online delivery of price information to consumers that might ultimately change during the transaction?

Gordon: It is difficult for us, and we have these conversations all of the time because we know that our offers perform better when we can list a rate up front. As you can imagine, those rates are very dynamic, changing daily if not hourly. When customers are responding to a rate that changes during the transaction, it becomes a burden to the process – its’ not helpful for anyone. That’s a technology issue that we think we can ultimately work out. As an example, some of the airlines have seemed to done a good job with calendared rates to make it easier for the consumer to identify what they will be paying. Thanks Brenda.

Gordon: Thank you.

Interested in learning more? Brenda Gordon will be delivering the keynote speech at the 2012 Apartment Revenue Management Conference, October 15-17, 2012 at the Omni Hotel in Dallas. Registration is still open, and you can save $100 if you register by September 24, 2012.

Source: / #Apartments #Multifamily

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