Tech Talk

Recent posts

We’re hardly out of the woods with COVID-19, and that means many properties will have to make do with a customer base mostly derived from local leisure, staycations and workcations from drive-to markets. With fewer overall guests, outside of cost savings efforts we must simultaneously look at maximizing the revenue per available guest (RevPAG), and there’s no better way to go about this than by sharpening your use of the PMS.

This is the last issue of Siegel Sez before this year’s CYBER HITEC event. HITEC is an event I have not missed in 30 years, and historically it has always been a great place to find innovation.

Toxicity Kills
Posted: 10/07/2020

It doesn’t matter if it is toxins in your physical environment or toxins in your mental environment. This stuff kills! 

It’s said that when someone’s mindset shifts, everything around them can change at the same time, and in our current setting, the importance of being in the right headspace, both personally and as an organization, can’t be discussed enough.

In my last installment, I introduced four areas of hospitality technology that I believe have been significantly changed by COVID-19. I covered contactless technologies in depth in that first article. This week I will turn to the other three areas: social distancing; health and sanitation; and communications.



want to read more articles like this?

want to read more articles like this?

Sign up to receive our twice-a-month Watercooler and Siegel Sez Newsletters and never miss another article or news story.

x
 

How to Manage Revenue in the Growing Extended Stay Market

02/22/2016
by Joerg Happel

Extended-stay accommodations are long time players in the hospitality industry, with the majority of hotel groups having one or more long-stay brands within their portfolio. Extended-stay accommodation typically refers to extended-stay hotels, aparthotels and serviced apartments – and their popularity over the recent years have been quickly on the rise.

According to Smith Travel Research, extended-stay occupancy rates in 2014 increased to 76 percent, up from 64 percent five years earlier. Homewood Suites by Hilton, an upscale extended-stay brand, similarly reported that their extended-stay revenues are up 12 percent.  With this type of rapid growth, properties in this sector need to equip themselves with tools that optimize their demand and price based on changing market conditions.

Applying revenue management in properties with extended-stay demand does require several unique factors for consideration. This article addresses the preliminary consideration in optimizing revenues while addressing the complex dynamics that the extended stay business brings.

Revenue Management Process

With typically more unique business considerations than other hotel segments, extended-stay hotels may find themselves at a bit of a loss on beginning to manage all of these decisions.

As a starting point, extended-stay hotels need to collect reliable data to build an accurate forecast. Strong data will help produce a strong understanding of the overall demand, and this understanding is needed to predict what future demand will look like and how it should be managed. Historical data should include rooms sold, room types booked vs. room types occupied and upgrades. Hotels should also break down the revenue by day and market segment for any specific timeframes.

Data capture processes should be set up or reviewed to ensure the hotel truly understands its guests. Some of these additional data variables may include asking guests why they are visiting, recording whether they are a long- or short-stay guest, and if his or her price is fixed or flexible or includes additional yielding restrictions such as last room availability (LRA). With an in-depth understanding of guests and their behavior, a future demand forecast can be built.

Forecasting is essential for properties to respond to constantly changing market conditions, helping them make strategic and informed decisions. It is also important to consider the elements in extended-stay properties that can impact stay patterns significantly. For extended-stay hotels, this means examining guests that extend their stays or depart early, where the consumption of inventory is over a significant period of time. It is especially important over high demand periods to understand what demand may be displaced by accepting shorter stay demand or, adversely, where those shorter stay bookings are needed to fill in the gaps.

With all of these complexities to consider, it is important that extended-stay hotels do not rely on pricing management alone, but also implement controls that can help manage all demand by arrival date and duration of stay. These controls also account for lost revenues through cancellations or no shows, and helps ensure that hotels know where they might turn away guests due to gaps in inventory. A common example of this could be turning away a 30-night website inquiry because the hotel was sold out on one or two nights in the desired room type. These controls also ensure that hotels know how to balance transient and group business, since the acceptance of groups can significant impact the disruption of stay patterns more so than in shorter-stay properties.

Many of these complex business factors should be considered in conjunction of one another. Doing so requires a consistent and disciplined approach to data collection, forecasting and the application of analytics. Beginning with proper data collection and a thorough understanding of guest behavior, extended-stay hotels can build a starting foundation to navigate the complexities of extended-stay revenue management.

The hotel industry has long been known for its complexity, and it becomes even more complex when extended-stay properties are involved. However, extended-stay hoteliers now have access to solutions and strategies that will increase profits and guide them through unraveling their business complexities. Combining the right data with the right analytics will ensure that extended-stay hotels attract the right guests, generate the most revenue and continue on their meteoric rise within the industry.

About The Author
Joerg Happel
Senior Product Manager
IDeaS Revenue Solutions


Joerg Happel is the senior product manager for IDeaS Revenue Solutions.

 
Comments
Blog post currently doesn't have any comments.
Leave comment



 Security code