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Budgeting for Success in 2018

11/01/2017
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For many hoteliers, it seems budget season begins earlier and earlier each year. While the process and timeline varies from company to company, every hotel ultimately has to answer the same question: “What can we do differently next year to optimize revenue and maximize profit?” The answer will vary at each hotel due to any number of different factors, but there should also be common themes that every hotel needs to explore to achieve success in 2018 and beyond.
 
Consider an Audit?
Distribution is a term every hotelier knows and uses, but what does it really mean? Is your hotel analyzing the cost of acquisition through all available channels and allocating appropriate expenses into the budget for 2018 based on those findings? Too many hotels spend tens of thousands of dollars on GDS advertising, SEO, and pay-per-click (PPC) marketing campaigns simply because they are carrying over line items from the previous year. When is the last time your hotel underwent a content audit or budgeted for updated photography? Over time, the little things get lost in the shuffle and those high-impact channels need to be revisited for opportunities. Updated photos, consistent content and even showing availability (yes, this happens more than anyone might want to think) will all help increase performance and ensure the dollars spent see a maximum ROI. It does not help to spend thousands of dollars on advertising if HOD screens are cluttered, content is stale, or if most room types or rate plans are not bookable for what you are advertising in the GDS. There are companies that have built its business around distribution auditing and optimization. A distribution audit is highly recommended will help a hotel quickly identify areas of opportunity that can be used to determine where to spend marketing dollars for the upcoming year. 
 
Budget to Make Money
Data analysis is another big-ticket item every company should consider allocating funds to in 2018. Technology continues to advance more rapidly than any industry can keep up with and there is more data to analyze than any person could possibly wrap their head around. Thankfully, there are many systems that can help aggregate data to allow revenue management and sales and marketing teams to focus on larger trends and stay one step ahead of the competition. Is your hotel utilizing any software to aid in decision-making and minimize the use of manual spreadsheets and data entry? If not, it is time to explore the available options and think about including this in your 2018 budget. The ROI tends to outweigh the associated costs in addition to freeing up precious time to allow hotel teams to make faster and more educated business decisions. Also, the competitive landscape among software companies has made costs more affordable. Now is the time to take a look at what is available and invest in the future. Time is money, so budget to free up some time to make more money!
 
Training Should Never Be Overlooked
Another key element that often gets overlooked during the budget process is training. Whether it is for a CRS, PMS, RMS or other business intelligence tool being utilized, ongoing training is a vital aspect for every hotelier to fully understand the tools available and maximize their capabilities. In this digital marketplace, systems are continuously being updated, upgraded and enhanced. Having every team member understand the technology being used will certainly give an edge to any company. Many times, understanding the nuances of how to manipulate a system to your advantage can be the difference between success and falling short of expectations.
 
There are also digital marketing and revenue management certification programs available through HSMAI that operations and sales professionals should take advantage of. Having an operations team versed in revenue management and sales and marketing practices is an oft-overlooked element of many successful hotels. Total hotel revenue maximization can only take place if operations (including F&B), sales and marketing, and revenue management departments all buy into a greater revenue management culture. Achieving higher revenues does not have to come at the cost of guest satisfaction. Having every department understand how each affects the other is vital to the overall success of the team, which is why training is so important. The bottom line is that every company should budget to invest long-term in its employees.
 
The Right People for the Job
Last, but certainly not least, is making sure the right people are in place to carry out the business plan for the upcoming year. For some hotels this could mean adding positions in revenue management or sales and marketing, adding a digital marketing/e-commerce position, or it could mean restructuring entirely to put your organization in position to succeed moving forward. For those hotels and companies that can’t afford a revenue management team on their own, there are affordable options available to have top-tier talent at your disposal. Spending thousands of dollars on technology and innovative systems is useless if the right people are not in place to take advantage of them and fully utilize their capabilities. 
 
The landscape of the hospitality industry has certainly changed dramatically in the last few years and will continue to do so at a rapid pace. However, what has not changed is the need for quality talent. Budget to invest in revenue management for 2018. If invested properly, the ROI will be well worth the expense.
About The Author
Rich Rebidue
CEO
Revenue Optimization Consultants


Rich is widely recognized by peers and colleagues as an industry leader in the revenue management discipline. He is renowned for his ability to drive superior market share for multiple brands and independent properties alike through the optimization of market segmentation across all distribution channels.

 
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