• Optimizing the entire hotel asset (revenues & profit)

• Impacts all revenue streams

• Finding the most profitable mix of business

• Within that mix, finding the most profitable guest

• Down to the NOI level

Analyze New Metrics

• Way beyond CPOR

• Tracking profitability by market segment

• Budgeting based on profit by market segment

• New Metrics

• NetRevPAR

• ROGR (Revenue per Occupied Guest Room)

• POGR (Profit per Occupied Guest Room)

• POGrpR (Profit per Occupied Group Room)

• ProPOST (Profit Per Occupied Space Time)

First steps to Profit Management is a Change in the Company’s Culture

It’s not just the responsibility of the Director of Revenue Management.

RM Best Practices

• Evolving Role

• Not Rooms-centric

• All revenue producing departments—dotted line to RM—break down the silos

• Greater time for strategic thinking—seeking most profitable guest

• Work Smart not Hard

Service –Profit Chain

• Segments with the highest ADR do not always mean they are the most profitable • BAR (Rack Rates) has an ADR of $359 however the profit per paid room night is only $349.20 versus Internet Non Opaque

contributing $391.28 in profit per paid room night• Shifting thought process in how rates are yielded based on total profitability and not just rooms• Now that you know this, what actions do you take as a result?

SegmentNo. of

GuestsLOS

No. of

Reservations

Room

NightsADR

Room

RevenueRoom Profit

Spa Rev Per

Rm NtSpa Revenue Spa Profit

F&B Rev

Per Nt

F&B

RevenueF&B Profit

Golf Rev Per

Nt

Golf

RevenueGolf Profit

Total

RevenueTotal Profit

Total Profit Per

Paid Rm Nt

BAR 448 3.4 154 525 359.00$ 188,475.00$ 169,627.50$ 10.00$ 5,250$ 788$ 10$ 5,250$ 3,150$ 20$ 10,500$ 9,765$ 209,475$ 183,330$ 349.20$

Consortia 428 2.1 148 310 323.10$ 100,161.00$ 90,144.90$ 25.00$ 7,750$ 1,163$ 25$ 7,750$ 4,650$ 50$ 15,500$ 14,415$ 131,161$ 110,372$ 356.04$

Promotion 552 3.9 191 743 251.30$ 186,715.90$ 168,044.31$ 55.00$ 40,865$ 6,130$ 65$ 48,295$ 28,977$ 60$ 44,580$ 41,459$ 320,456$ 244,610$ 329.22$

Discount 616 3.1 213 659 287.20$ 189,264.80$ 170,338.32$ 60.00$ 39,540$ 5,931$ 75$ 49,425$ 29,655$ 60$ 39,540$ 36,772$ 317,770$ 242,697$ 368.28$

Package 141 4.2 49 204 389.00$ 79,356.00$ 71,420.40$ 120.00$ 24,480$ 3,672$ 75$ 15,300$ 9,180$ 80$ 16,320$ 15,178$ 135,456$ 99,450$ 487.50$

Corporate Negotiated 280 1.5 97 145 149.00$ 21,605.00$ 19,444.50$ 10.00$ 1,450$ 218$ 25$ 3,625$ 2,175$ 50$ 7,250$ 6,743$ 33,930$ 28,580$ 197.10$

Employee 79 2.4 27 65 65.00$ 4,225.00$ 3,802.50$ 30.00$ 1,950$ 293$ 15$ 975$ 585$ 40$ 2,600$ 2,418$ 9,750$ 7,098$ 109.20$

Wholesale 55 7.8 19 148 132.00$ 19,536.00$ 17,582.40$ 90.00$ 13,320$ 1,998$ 80$ 11,840$ 7,104$ 90$ 13,320$ 12,388$ 58,016$ 39,072$ 264.00$

Internet Non Opaque 360 4.2 124 521 269.25$ 140,279.25$ 126,251.33$ 135.00$ 70,335$ 10,550$ 75$ 39,075$ 23,445$ 90$ 46,890$ 43,608$ 296,579$ 203,854$ 391.28$

Opaque 58 1.2 20 24 79.00$ 1,896.00$ 1,706.40$ 55.00$ 1,320$ 198$ 35$ 840$ 504$ 40$ 960$ 893$ 5,016$ 3,301$ 137.55$

Total 3,017 3.2 1,040 3,344 278.56$ 931,513.95$ 838,362.56$ 68.36$ 206,260$ 30,939$ 55$ 182,375$ 109,425$ 59$ 197,460$ 183,638$ 1,517,609$ 1,162,364$ 347.60$

Total Customer Value

Revenue Management• Market Segmentation: Required for optimizing the buying process and

measuring total spend• Understand the behavioral patterns of each segment and the cost

associated with each channel in which they book• Market segment data analysis is required in order to offer direction in

developing the optimal mix of business

• Seamless Technology: Required to ensure constant communication between all outlets. This will provide accurate, timely and complete information for successful optimization, enabling and supporting better forecasting

• Forecasting: Required to drive the fine tuning of long term strategies and the deployment of short term tactics

• Key emphasis on data collection quality as the accuracy of forecasts will determine key decisions on strategies to adopt for all revenue streams

• Optimization: Required in order to continually monitor demand for the purpose of limiting or increasing supply and to support decisions in pricing and product availability

Rate Profitability – NetRevPAR

Rainmaker Tools To Evaluate Best Guest

Understanding your total cost of acquisition is a key piece to achieve Total Revenue Management!Know all costs that you incur thru all channels of business!

More Displacement Analysis

Drill down further…

Rainmaker Tools To Evaluate Best Guest

Rainmaker Tools To Evaluate Best Guest

Rainmaker Tools To Evaluate Best Guest

Upsell Programs

Examples of Upsell Programs

• Day of Room Upsells and Pre Arrival Strategy• Does the front desk have iPad’s or a way to visually show the value of the upsell?• Does your team dynamically price the amount of the upsell pending DOW, time of day and

occupancy levels? • Turtle Bay Resort successfully generated $382,263 in upsell revenue for 2017!!! Goal for 2018 =

$411,697!!! • Do you have an incentive program in place to create excitement for the front desk to make sure

upsells are a part of their check-in process• How is your pre-arrival letter pushing upsells and enhancements?

• Are you recognizing special occasions guest note in their booking?• Is reservations trained to offer enhancements and package add on’s?• Is the front desk trained to recognize when a family is traveling together and offer up a

connecting rooms at a discount upon check-in?

• Food and Beverage• Is your revenue per server posted in the back of the

house?

• Is there an incentive in place for the highest average check or upsells on F&B?

• Are your wine menus sorted by style or price? • This will encourage people to choose what they want rather

than the second on the list (one up from the house bottle), which is usually the most popular choice.

• Rethink enhancements or package ad on’s based on occasion on booking engine and pre arrival• Emotional buy – Edible Arrangement Purchase Process

Examples of Upsell Programs

Track Upgrades

• Do the math

✓ 3 Per Night

✓ 1.5 Average LOS

✓ x 365

✓ = $1,095

✓ x $30 value

✓ = $49,275

• Upsell not Upgrade

Track RevPAR by Room Type

Lower RevPAR is a red flag that something’s wrong!

Beyond the TrendWhat do Tomorrow’s Guest Need?

▪ Desire to Create their own Experiences▪ Ability to Engage and Interact with Others▪ Service that is not Forced or “In Your Face”▪ Memorable Learning Experiences

What are Tomorrow’s Guest Consuming?▪ Ethically & Responsibly Sourced▪ Increased Appreciation for Locality▪ Non-processed or Chemically Engineered▪ Small Batch, Private Label, Organic

What are Tomorrow’s Guest Willing to Pay For?▪ Quality vs. Quantity▪ Thoughtful Preparation▪ Uniquely Crafted▪ Creative Presentations

Owner/Operator MentalityDrive the Business through Re-Invention

▪ Restaurants which double as Social/Group Venues▪ Great Room Concepts▪ Labor-less Models▪ Life without Room Service

Comp Set Pricing▪ Know your Competitors, including Free-Standing▪ Don’t be afraid to Charge▪ Menus must be Evaluated Constantly

Food & Beverage Cost of Sale▪ Understanding changes in Commodities, Market Conditions & Demand▪ Operators will be Challenged

Labor Cost▪ Deployment Efficiency & Effectiveness▪ Analytics & Data Mining – Third-Party Resources

Profit Maximization

Banquets & Catering▪ Small Meetings Booking Site

Beverage Centric Environments

Grab & Go▪ Reduced Labor Model

▪ Impulse Buy

▪ Craft Coffee, Organic Market

Leveraging Technology▪ Capton®▪ Kiptsu®▪ Napa Technologies®▪ Soft Bank® (Amazon Go®)▪ Intelity®

Driving “Other” Revenues▪ Audio-Visual▪ Room Rental▪ Service Charges & Fees

Strategic Partnerships

▪GC Hopkins® – Beverage▪ Rebates & Fill Programs

▪ LTOs = Incentives

▪ Mixologists

▪ Training

▪OS & E▪ Initiative Funding

▪ Exchange Programs

▪ Free Product

▪ Stephan Pyles & Kelly Jones▪ The Chef Agency® – Talent Sourcing▪ Green Olive Media® – Branding,

Concept, Web Development▪ Avendra® / Integra® – Procurement

Solutions & Buying Power▪ Innovative Tech

Team Member Growth & Succession

Leveraging Field Talent▪ Culinary Advisory Board

▪ Operational Task Force – Culinary, Food & Beverage, CCS

Constantly Seeking Talent▪ Hiring for the Position beyond the Immediate Need

On-Going Training, Development & Exposure

Encourage Mobility

• Establish the BaselineDetailed Information on Arrival PatternsDetermine Labor Percentage of RevenueRevenue Per Available Seat

• Set GoalsAverage CheckRevenue per Available Guest RoomUpsellsItems Sold

• Review Pricing StrategyPricing Based on DemandMarketing Based on Need Periods

• Implement Total Profit Management CultureStaff Training

• Monitor OutcomeReports

Food & Beverage Total Profit Management

F&B Best Practices

• Dynamic Catering Menus

• Unconstrained Demand Forecasting in Catering

• Advanced menu engineering

Types of Price Fences

Physical price fences- High demand periods

Table Location

Party Size

Menu Type

Absence or presence of certain amenities

Intangible price fences – Shift demand from busy times to slow periods

Group membership or affiliation

Time of day or week

Duration of use

When reservation is booked

Walk-in versus reservation

Type of reservation (guaranteed or not)

13

24

28

65

45

21

10

5

13

2023

46

29

16

11

6

13

24

28

65

45

21

10

5

13

24

28

65

45

21

10

5

13

24

28

65

45

21

10

5

13

24

28

72

45

16

10

5

13

26

31

83

33

20

14

5

6:30am 7:00am 7:30am 8:00am 8:30am 9:00am 10:00am 10:30am

Co

vers

Sunday 4 Week Average Monday 4 Week Average Tuesday 4 Week Average Wednesday 4 Week Average Thursday 4 Week Average Friday 4 Week Average Saturday 4 Week Average

F&B Covers by Arrival

Breakfast Revenue Per Available Seat

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

6:30am 7:00am 7:30am 8:00am 8:30am 9:00am 10:00am 10:30am

Breakfast Revenue Per Available Seat

Sunday 4 Week Average Monday 4 Week Average Tuesday 4 Week Average Wednesday 4 Week Average

Thursday 4 Week Average Friday 4 Week Average Saturday 4 Week Average

Spa Total Profit Management

Spa Total Profit ManagementKPI’s

Spa Utilization Ratio (SUR)• Total # of Treatment Hours ÷ Total # of Available Treatment Hours

Average Treatment Rate (ATR) • Total # of Treatment Hours Sold ÷ Total # of Treatments Performed in that

period

Revenue Per Available Treatment Room (REVPATH)• SUR ÷ Average Treatment Rate

Spa Revenue Per Occupied Hotel Room (SREVPOR)

Therapist Occupancy / Productivity• Total # of Treatment Hours Sold ÷ Total # of hours your therapists are on

duty

RevPATH

• During periods of low RevPATH• Try to attract more customers and increase use or rely on suggestive selling to increase the average expenditure• Consider offering specially priced treatments for customers who are available on weekdays

• During high-RevPATH intervals• Reduction in time between treatments or offering only premium treatments• Require credit card guarantee for reservations• Offer only premium services during peak periods• Implement cancellation policies to protect against last minute cancellations

Time

• Redefining duration –

• Offering different lengths of treatments

• Requiring guests to purchase multiple treatments during busy periods –Packages only

• Reducing duration uncertainty

• Late policy

• Cancellation Fees

• Reducing changeover time

• Attendants to help therapists

Price

• Perceived value

• Most spa offer the same discount regardless of customer demand

• Offer price differentials for off-peaks days and times

• Rate Fencing

• Shift demand from busy times to slow times

• Reward regular clients to book during slow periods

• Schedule most profitable business during peak hours

• Discount for Pre-Paid or Advance Purchase

• Awareness

• Make the spa well known in many areas of the hotel

• Offer daily pool packages with certain spend mid week to locals

• Loyalty Programs

Spa Total Profit Management• Establish the Baseline

Detail information on arrival patterns

Hourly occupancy level

Treatment times and duration

Customer preference by day of the week and time of day

• Set Goals

Occupancy

Average Treatment

Revenue per Available Treatment Room

Revenue per Available Guest Room

• Review Pricing Strategy

Pricing based on demand

Marketing based on need periods

• Implement Total Profit Management Culture

Training of staff

• Monitor OutcomeReports

Golf Total Profit Management

• Time of day, even to the extent that a tee time on the hour is more valuable than the tee time on either side (who has ever asked for the 8:52am slot instead of the 9:00am slot?).

• Day of the Week• Daily Weather• Competition • Sporting or other major events that are taking place in the

town or city of the club• Seasonal Factors• Traffic Flow• Historical Data• School Closures• How quickly the tee times are selling out and remaining

inventory to sell

Factors that Impact Supply and Demand

Golf Total Profit Management

• Revenue Per Available Round

• Average Rate Per Round

• Occupancy

• Source of Business

Key Metrics

• Day by Day Pricing• Regurgitating Numbers• Go on tangents • Expect DORM to gather

all data points

• Have all profit leaders present

• Encourage conversation around strategy and new ideas

• Keep Meetings to 1 Hour

• Establish measurable goals against each profit generating source

• Celebrate all wins no matter how big or small

• Don’t get lost in reports

• Do not limit the participation in strategy meetings