The hotel industry is on the road to recovery, but it hasn't progressed as far as it could. Tourist spending in the U.S during 2010 grew 11 percent, according to U.S. Commerce Department¹, with a large amount of that increase ending up in hotel cash registers. Although an encouraging metric, it wasn't enough to make 2010 the recovery year that many predicted: the hotel industry is still not at the level it was during the era of prosperity before the recession, leaving many wondering: Is there a better way forward for the industry than the path it has been following?
The answer is a resounding YES. As revealed in REVPAR GURU's new guidebook, "Rethinking Revenue Management: A Collection of Articles," hotel revenue management processes and strategies worldwide have much room for improvement. All too often, revenue management has been treated as an inflexible process of setting a price for a room and hoping a customer will accept it. But using sophisticated RM software, hoteliers have a powerful, flexible tool that provides a much wider scope for customer acquisition, retention, and most enticingly, revenue maximization. And today, RM hasn't been utilized to anywhere near its potential.
"Rethinking Revenue Management: A Collection of Articles" provides the road map to reaching that potential. The guide explores how hoteliers can effectively master the three key principles for maximizing RevPAR: understanding, anticipating and influencing the customer. Additionally, the guide examines why hotel pricing is - or SHOULD be like - the stock market, and illustrates how this can be accomplished through good RM software and a savvy, proactive revenue manager.
The guide also provides numerous easy-to-implement tricks to boost any hotel's visibility and attractiveness on the OTAs. For example, many hotels aren't aware that page placement (in the results page of the OTAs) is of upmost importance for increasing bookings and RevPAR; in fact, there is one specific page position that consistently produces room bookings - and, counter-intuitively, it is not on the first page. Considering that 60 percent of all leisure, and 40 percent of business travel bookings were made online in 2009, it's obvious the internet is now a massive engine driving the market. That information isn't only useful, it's absolutely critical.
To thrive in business, the modern revenue manager must yield to practicality, optimizing customer needs and purchasing trends, while anticipating consumer resolutions - all in a rapidly changing environment. Revenue management is a complex and ever-evolving art which is difficult to master. With fresh thinking and thoughtful analysis on the subject, this guide can help make it that much easier - download "Rethinking Revenue Management: A Collection of Articles" here
Tuesday, January 4, 2011
Sunday, January 2, 2011
Customer Service by Any Other Name is Customer Service.
We decided to take the kids to a local family pizza place before school resumes as a treat, now this is a chain, and we go there several times a month since there are 2 close to the house. We went to the new one, which is like a barn, it is huge, and the game area has a roller coaster. When you order you get a number, and they call your number and they’ll announce that your breadsticks, wings and pizza are ready.
Never in all the time have you had to bring your receipt to pick up your food, at this particular location which we have been to twice before, which recently opened, they called our number, and I went to get the breadsticks, and the girl asked me in a not so kind way that I needed to show my receipt, which I had to go back and get, I asked to speak with the manager, and literally threw my receipt at the girl, I chatted with the manager, and he apologized me about it, and we spoke as he had seen me at the other store. It was new, and they had problems with orders being taken by the wrong customers.
(I never understood that, On a separate note in Santa Fe about 10 years ago, I ordered a pizza from Domino’s and waited for an hour, and called twice, it was delivered, yes, to the wrong house, was accepted and paid for.)
Upon leaving I felt that I needed to follow up, and I did, I discovered, that
She was ahead of the manager I spoke with in seniority, and that he knew that there were problems with her prior, and she had issues with people taking how she spoke with them the wrong way, I agreed with him, and he was going to follow up with the Regional Manager, I suggested to him that she needed to have some counseling, and that they needed to explain to their customers when they ordered that they needed to bring their receipts to get their orders. If they had done this as we ordered, problem solved, and done.
In the end he and I concluded that it is how it is handled and perception by the customers, which alleviate a situation like I encountered.
Never in all the time have you had to bring your receipt to pick up your food, at this particular location which we have been to twice before, which recently opened, they called our number, and I went to get the breadsticks, and the girl asked me in a not so kind way that I needed to show my receipt, which I had to go back and get, I asked to speak with the manager, and literally threw my receipt at the girl, I chatted with the manager, and he apologized me about it, and we spoke as he had seen me at the other store. It was new, and they had problems with orders being taken by the wrong customers.
(I never understood that, On a separate note in Santa Fe about 10 years ago, I ordered a pizza from Domino’s and waited for an hour, and called twice, it was delivered, yes, to the wrong house, was accepted and paid for.)
Upon leaving I felt that I needed to follow up, and I did, I discovered, that
She was ahead of the manager I spoke with in seniority, and that he knew that there were problems with her prior, and she had issues with people taking how she spoke with them the wrong way, I agreed with him, and he was going to follow up with the Regional Manager, I suggested to him that she needed to have some counseling, and that they needed to explain to their customers when they ordered that they needed to bring their receipts to get their orders. If they had done this as we ordered, problem solved, and done.
In the end he and I concluded that it is how it is handled and perception by the customers, which alleviate a situation like I encountered.
Friday, December 31, 2010
10 Menu Trends We'd Like to See in 2011
Well here are a few that we'd actually like to see more of in the upcoming year.
1. Recognition to butchers.
The meat trend can occasionally start to feel a little tired, but letting customers know that your restaurant is accountable for the provenance of its meat and that it supports the dying art of butchery is a good thing.
2. Improved beer programs.
Small batch distilleries and microbreweries are finally reaching critical mass to get the beer movement really rolling. We'd like to see well-curated beer lists right next to the wine lists offering bottles from obscure, but terrific vineyards.
3. Less "artisan" this and "artisan" that.
There was a time when the word artisan actually meant something—it was produced by an artist. These days, anything handmade or rustic in appearance gets the artisan stamp. Let your food's flavor speak for itself. If it's truly made by an "artist," your customers should be able to taste it.
4. More diversity in meats and fish.
Even though chefs are becoming more adventurous about serving offal, we still see cow, pig, chicken, duck. How about more goat or wild boar? Or sea robins, barramundi, and mackeral, instead of the same half dozen fish that appear on every menu? Many alternative meats and fish are both more interesting, and sustainable—a double win for interested chefs and customers.
5. Strong bar programs that don't rely on flashy cocktails.
Lots of restaurants these days have house cocktails featuring multiple fresh-squeezed juices, infused or barrel-aged spirits, and three different acai/pomegranate/cardamom liqueurs, but ask them for a Negroni or a Sazerac, and you're met with blank stares (or worse—the bartender who pretends to know what the drink is, looks up the ingredients, then serves you your Manhattan shaken in a martini glass). Get the basics right, then work on the fancy drinks.
6. Drink pairing suggestions beyond wine.
Pick the perfect beverage for each of your dishes, whether it's wine, beer, or a nonalcoholic cocktail. Beverages help food shine—encourage your customers to choose good matches and you'll improve their experience while improving your bottom line.
7. Improved cheese programs.
We can never get enough good cheese, and tasting small-batch cheeses from small farms and producers is always interesting—provided that cheese list is well curated. To make things easier for cheese novices, it's always nice when "set menus" of three or five different choices are already picked—of course, the diner should always be given the choice to make his or her own groupings if desired. And for God's sake—do not serve fridge-cold cheese. Room temperature, please.
8. Smaller menus with fewer programs.
When we're confronted with a menu that's got Appetizers, Small Plates, Crudo, Salumi, Pastas, Main Courses, Side Dishes, and a half dozen other sections, we don't just get confused, we get annoyed. Customers don't come to restaurants to get a mental workout: your job is to do the work for them. Keep the menu simple, and make it clear how and how much customers are meant to order.
9. Don't list the name of your farmer or producer unless you've got something to say.
It doesn't mean much to a diner if your eggs come from Starry Grove Farm unless Starry Grove is doing something really special to make those eggs different from all the other eggs out there. Ask yourself: are your eggs really that different from the eggs they're using next door? If not, then we don't need to know about them.
10. Wording designed to inform customers rather than confuse them.
Menus written out as confusing lists of ingredients may be the hot trend designed to get your patrons to interact with the servers, but 99 percent of the time, we'd like to be able to figure out what's going on just by reading the menu. We prefer straightforward menus that describe the food in simple but evocative ways so we can at least get a sense of what we are about to eat. Also, plain English is almost always preferable. Is that sauce really an aioli, or is it just mayonnaise?
Oh, and for the record: We want more double crusted pies on dessert menus. Crumb toppings and crisps are a cop-out.
1. Recognition to butchers.
The meat trend can occasionally start to feel a little tired, but letting customers know that your restaurant is accountable for the provenance of its meat and that it supports the dying art of butchery is a good thing.
2. Improved beer programs.
Small batch distilleries and microbreweries are finally reaching critical mass to get the beer movement really rolling. We'd like to see well-curated beer lists right next to the wine lists offering bottles from obscure, but terrific vineyards.
3. Less "artisan" this and "artisan" that.
There was a time when the word artisan actually meant something—it was produced by an artist. These days, anything handmade or rustic in appearance gets the artisan stamp. Let your food's flavor speak for itself. If it's truly made by an "artist," your customers should be able to taste it.
4. More diversity in meats and fish.
Even though chefs are becoming more adventurous about serving offal, we still see cow, pig, chicken, duck. How about more goat or wild boar? Or sea robins, barramundi, and mackeral, instead of the same half dozen fish that appear on every menu? Many alternative meats and fish are both more interesting, and sustainable—a double win for interested chefs and customers.
5. Strong bar programs that don't rely on flashy cocktails.
Lots of restaurants these days have house cocktails featuring multiple fresh-squeezed juices, infused or barrel-aged spirits, and three different acai/pomegranate/cardamom liqueurs, but ask them for a Negroni or a Sazerac, and you're met with blank stares (or worse—the bartender who pretends to know what the drink is, looks up the ingredients, then serves you your Manhattan shaken in a martini glass). Get the basics right, then work on the fancy drinks.
6. Drink pairing suggestions beyond wine.
Pick the perfect beverage for each of your dishes, whether it's wine, beer, or a nonalcoholic cocktail. Beverages help food shine—encourage your customers to choose good matches and you'll improve their experience while improving your bottom line.
7. Improved cheese programs.
We can never get enough good cheese, and tasting small-batch cheeses from small farms and producers is always interesting—provided that cheese list is well curated. To make things easier for cheese novices, it's always nice when "set menus" of three or five different choices are already picked—of course, the diner should always be given the choice to make his or her own groupings if desired. And for God's sake—do not serve fridge-cold cheese. Room temperature, please.
8. Smaller menus with fewer programs.
When we're confronted with a menu that's got Appetizers, Small Plates, Crudo, Salumi, Pastas, Main Courses, Side Dishes, and a half dozen other sections, we don't just get confused, we get annoyed. Customers don't come to restaurants to get a mental workout: your job is to do the work for them. Keep the menu simple, and make it clear how and how much customers are meant to order.
9. Don't list the name of your farmer or producer unless you've got something to say.
It doesn't mean much to a diner if your eggs come from Starry Grove Farm unless Starry Grove is doing something really special to make those eggs different from all the other eggs out there. Ask yourself: are your eggs really that different from the eggs they're using next door? If not, then we don't need to know about them.
10. Wording designed to inform customers rather than confuse them.
Menus written out as confusing lists of ingredients may be the hot trend designed to get your patrons to interact with the servers, but 99 percent of the time, we'd like to be able to figure out what's going on just by reading the menu. We prefer straightforward menus that describe the food in simple but evocative ways so we can at least get a sense of what we are about to eat. Also, plain English is almost always preferable. Is that sauce really an aioli, or is it just mayonnaise?
Oh, and for the record: We want more double crusted pies on dessert menus. Crumb toppings and crisps are a cop-out.
Thursday, December 30, 2010
What 2011 Means to Me.
With resurgence in the hotel business, although not in all markets, and some job movement it seems that 2011 will be stronger than 2010. The changes that we see are the RevPar equations and logical movement to make the property as profitable as possible. There are other components that are the other side of the equation that is equally important one is the Menu costing and Profit Ratio models. The key is to get the best pricing from your vendor or be under a contract. The other part is the Profit model for meetings and Catering events. A preliminary P&L will give you a clear indication on adjustments that need to be made. Labor is another key element that hotels scrutinize to make money. They combine jobs, or scale back staff there seems a fine line on service at all levels. With Budgets in mind there is a time to know when to cross the line and when to cross back. Marketing your property correctly to achieve the most revenue streams and social marketing will get you the most exposure.
We at Sutter & Pine Hospitality are ready to assist you in Development, Operations, and Training, Control systems, helping you make the right decisions for 2011.
We at Sutter & Pine Hospitality are ready to assist you in Development, Operations, and Training, Control systems, helping you make the right decisions for 2011.
Wednesday, December 15, 2010
To Pay Or Not To Pay…Sense or Dollars….
A National Chain has decided to take the first steps in eliminating their free rewards program. At checkout a staff member would ask for you Rewards card or email address. They decided to switch to a program in which you have to pay $20.00 to join the basic plan which to gain anything from this plan as it stands, you the customer would have to spend $200.00 a year in the store to get back your original $20.00,so to include that your break even point is really $220.00 before you get nothing. If it were a hotel chain, your sign up would be free and your points accumulate and accrue. If you get points in their plan which equates to roughly $5.00 you have 30 day to use them, with no rollover or accrual.
The one part which makes no sense is that the employee’s were sent a letter telling them to support the program, or that they would be written up in disciplinary form, getting hit with a stick does not make the donkey move faster. The customer base they have to work with at the store in particular is Latino from Mexico, and the email required to start the process doesn’t allow them to accept Mexico emails or their base is elderly and don’t have emails or computers. It is funny how none of this is taken into consideration during the design or implementation of the new system.
It won’t work for any of the reasons I mentioned who wants to Pay to Play, and support by a staff who has their hands tied to make it work, who is threatened with disciplinary action. Some companies need to do more to get more.
The one part which makes no sense is that the employee’s were sent a letter telling them to support the program, or that they would be written up in disciplinary form, getting hit with a stick does not make the donkey move faster. The customer base they have to work with at the store in particular is Latino from Mexico, and the email required to start the process doesn’t allow them to accept Mexico emails or their base is elderly and don’t have emails or computers. It is funny how none of this is taken into consideration during the design or implementation of the new system.
It won’t work for any of the reasons I mentioned who wants to Pay to Play, and support by a staff who has their hands tied to make it work, who is threatened with disciplinary action. Some companies need to do more to get more.
Tuesday, December 14, 2010
Make your hotel more profitable : Strategy #12 – Diversify Your Revenue Stream
(John Hogan brings some valid points for 2011)
The hospitality industry has many components, including lodging, food service, beverage service, meetings, tourism, entertainment, attractions and more.
Running a successful, profitable hotel and/or restaurant has parallels with
the stock market : one must diversify to maximize profitability and to
minimize risk. The risks are even more apparent today considering the current economic climate, which requires thinking about the future as well as the present.
Today, you may have a solid brand (local or national), a good location, a base of regular guests and are holding your own in your competitive set comparative numbers. On the other hand, you have been having some staff turnover, your profit margins are not always consistent and there always seems to be a new competitor entering the market.
Your business could become stronger, more balanced and able to strengthen market penetration if you carefully examined some options and expanded your offerings with some diversity of service and products. These could include:
1.Adding retail space and/or items. Conrad Hilton set the pace two generations ago and the industry is again about to expand this approach in deeper ways
2.Making your services more accessible. This is especially true in food services, with major and smaller players experimenting with delis, carry-out for select popular items, etc.
3.Exploring the potential for appropriate size party catering services. Hosting special events off-site, IF you can do it well and profitably.
4.Finding your niche. It could be weddings, showers, corporate team building, etc
5.If you have a hotel restaurant , assess the periods of volume and see if there are options, such as making your restaurant available for larger functions on slow periods. You could also find a niche in renting the
entire place for private parties on known slow days or in high demand seasons, like corporate holiday parties.
6.Assessing your current or potential meeting room space and determine if the need is met in the market. This could bring in group business not currently using your facilities.
7.Creating profitable partnerships. There are likely several other local businesses that would like to reachyour customer base. Come up with creative ways to give such partners advertising access to yourcustomers…for a fee.
The hospitality industry has many components, including lodging, food service, beverage service, meetings, tourism, entertainment, attractions and more.
Running a successful, profitable hotel and/or restaurant has parallels with
the stock market : one must diversify to maximize profitability and to
minimize risk. The risks are even more apparent today considering the current economic climate, which requires thinking about the future as well as the present.
Today, you may have a solid brand (local or national), a good location, a base of regular guests and are holding your own in your competitive set comparative numbers. On the other hand, you have been having some staff turnover, your profit margins are not always consistent and there always seems to be a new competitor entering the market.
Your business could become stronger, more balanced and able to strengthen market penetration if you carefully examined some options and expanded your offerings with some diversity of service and products. These could include:
1.Adding retail space and/or items. Conrad Hilton set the pace two generations ago and the industry is again about to expand this approach in deeper ways
2.Making your services more accessible. This is especially true in food services, with major and smaller players experimenting with delis, carry-out for select popular items, etc.
3.Exploring the potential for appropriate size party catering services. Hosting special events off-site, IF you can do it well and profitably.
4.Finding your niche. It could be weddings, showers, corporate team building, etc
5.If you have a hotel restaurant , assess the periods of volume and see if there are options, such as making your restaurant available for larger functions on slow periods. You could also find a niche in renting the
entire place for private parties on known slow days or in high demand seasons, like corporate holiday parties.
6.Assessing your current or potential meeting room space and determine if the need is met in the market. This could bring in group business not currently using your facilities.
7.Creating profitable partnerships. There are likely several other local businesses that would like to reachyour customer base. Come up with creative ways to give such partners advertising access to yourcustomers…for a fee.
Make Your Hotel More Profitable and Successful – 2011 is the critical time to invest in Your Talent and Your Team
(John is a great friend and former Instructor, he has keen insight.)
“Learning is not compulsory… neither is survival.”
W. Edwards Deming (1900-1993)
Deming was known as the father of the Japanese post-war industrial revival and regarded by many as the leading quality guru in the United States. Trained as a statistician, his expertise was used during World War II to assist the United States in its effort to improve the quality of war materials. He was invited to Japan at the end of World War II, where Japanese industrial leaders and engineers asked how long it would take to shift the perception of the world from the existing paradigm that Japan produced cheap, shoddy imitations to one of producing innovative quality products. Deming told the group that if they would follow his directions, they could achieve the desired outcome in five years. Few of the leaders believed him, but were ashamed to say so and would be embarrassed if they failed to follow his suggestions. Looking back, Dr. Deming observed, "They surprised me and did it in four years."
For much of the past three years, many industries have faced somber financial challenges. Hospitality in literally all segments struggled to find ways to meet the global financial meltdown in 2008 and 2009 and the 2010 scorecard shows mixed year-end results. Erosion of revenue and profitability from 2006-2007 periods, and the loss of both long-term customers and loyal staff are all issues faced.
As recently as last week in the HVS Career Network , there was discussion of a growing demand from their clients for top talent, especially at the middle-management level. Their report stated that the middle management group was considered a “ traditionally neglected group” of employees, but they were a crucial link between top management and line employees and responsible for turning business strategies into tangible outcomes.
In my career, I have experienced four major economic recessions that all dramatically hurt our industry for a period and I have participated in four recoveries. I agree with the HVS assessment that “Hoteliers have come to realise that now more than ever the quality of the workforce is the key market differentiator, and are ramping up their talent sourcing and retention strategies.”
Now is the critical time for hospitality business owners and managers to invest in their talent and team if they hope to make their Hotel More Profitable and Successful. Rebuilding our center of attention into a business recovery over the next 12 months means that now is the time to pay attention to those professionals in our organizations who are the key components of why guests will stay with our businesses.
I commented in several columns a year ago that it is a sometimes a hardship in the cost-conscious operations facing many businesses today for managers to leave their properties for professional development. It is also a reality that there is seldom any longer dedicated time for meaningful on-the-job training, which had habitually been a strong element of the hospitality industry’s career advancement path. There are many issues facing the complex world of hospitality and today’s business owners and managers need to be aware of that diversity, regardless of their own business focus.
As an individual who has been involved with well thought-out learning as both an academic and a corporate educator, I have come to recognize that delivering a balance of real-world business skills and comprehension with structured learning is essential to long-term success.
“Learning is not compulsory… neither is survival.”
W. Edwards Deming (1900-1993)
Deming was known as the father of the Japanese post-war industrial revival and regarded by many as the leading quality guru in the United States. Trained as a statistician, his expertise was used during World War II to assist the United States in its effort to improve the quality of war materials. He was invited to Japan at the end of World War II, where Japanese industrial leaders and engineers asked how long it would take to shift the perception of the world from the existing paradigm that Japan produced cheap, shoddy imitations to one of producing innovative quality products. Deming told the group that if they would follow his directions, they could achieve the desired outcome in five years. Few of the leaders believed him, but were ashamed to say so and would be embarrassed if they failed to follow his suggestions. Looking back, Dr. Deming observed, "They surprised me and did it in four years."
For much of the past three years, many industries have faced somber financial challenges. Hospitality in literally all segments struggled to find ways to meet the global financial meltdown in 2008 and 2009 and the 2010 scorecard shows mixed year-end results. Erosion of revenue and profitability from 2006-2007 periods, and the loss of both long-term customers and loyal staff are all issues faced.
As recently as last week in the HVS Career Network , there was discussion of a growing demand from their clients for top talent, especially at the middle-management level. Their report stated that the middle management group was considered a “ traditionally neglected group” of employees, but they were a crucial link between top management and line employees and responsible for turning business strategies into tangible outcomes.
In my career, I have experienced four major economic recessions that all dramatically hurt our industry for a period and I have participated in four recoveries. I agree with the HVS assessment that “Hoteliers have come to realise that now more than ever the quality of the workforce is the key market differentiator, and are ramping up their talent sourcing and retention strategies.”
Now is the critical time for hospitality business owners and managers to invest in their talent and team if they hope to make their Hotel More Profitable and Successful. Rebuilding our center of attention into a business recovery over the next 12 months means that now is the time to pay attention to those professionals in our organizations who are the key components of why guests will stay with our businesses.
I commented in several columns a year ago that it is a sometimes a hardship in the cost-conscious operations facing many businesses today for managers to leave their properties for professional development. It is also a reality that there is seldom any longer dedicated time for meaningful on-the-job training, which had habitually been a strong element of the hospitality industry’s career advancement path. There are many issues facing the complex world of hospitality and today’s business owners and managers need to be aware of that diversity, regardless of their own business focus.
As an individual who has been involved with well thought-out learning as both an academic and a corporate educator, I have come to recognize that delivering a balance of real-world business skills and comprehension with structured learning is essential to long-term success.
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