This Argophilia post by Phillip Butler starts the conversation: Who is the big bad wolf of hotel marketing?  Simply put, there isn’t just one –  OTA’s, Franchise Fees, Internet Marketing Fees, Booking Engine Fees.  This is one leaky ship.

Here is my response, but I am more interested in what all of you have to say?
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Great read. Thank you much. =)

I always thought of the OTA’s as something that filled the gap during the off line to online distribution evolution. They were a stopgap solution. They are now becoming unnecessary, and getting in the way of commerce because they are becoming obsolete, where they used to promote some level of commerce for our industry. Distribution has changed… and their role will phase out. It won’t be in the next 5, maybe 10…. but this will all change. I adore how people revile when you suggest the guy on top won’t be there forever.  The fact is, nothing is forever, and new paradigms unfold.

Another big bad wolf, on top of franchise fees? Ridiculous internet consulting firm charges by hourly consulting model.  Buuteeq is doing some good with simple pricing plans… it makes a lot more sense, and you aren’t nickel and dimed for the internet marketing group’s mistakes or on the job training.

Lastly…. commissions to booking engines. Including the franchise fees, as well… Engines like Synexis get promoted by franchise and flag brands, which then take a cut. It’s incredible how much money is lost to an engine that simply helps facilitate online booking. Eventually, the hotels will realize the money lost can be recouped quickly by building and designing a proprietary engine of your own, off a template, for the hotel to own, outright. That can save 20K – 100K+ a year.  I imagine a management group could justify the development fees to an owner group, based solely off the last 3 years of annual or commissionable fees that the property made to the booking engine company.

Would anyone have any idea how much it would cost for development of a competent template, and simple engine with solid UI – that includes a mobile component? Is that $100k or more?  I know… you can always spend more. =)

I)  Thoughts from Paul Burditch, owner of an excellent Luxury Hospitality PR & Marketing company, Burditch Marketing Communications, in regards to hotels in San Francisco, and a decision *not* to allow dogs at a property:

Travelers who come from all over the world know San Francisco to be a dog paradise – it should be given certain treatment so that it is welcoming, & visibly warm & fuzzy feeling.  If dogs are not allowed, we will have a responsibility for a fair explanation of *why* we do not allow dogs, especially in light of the entire industry moving that direction.  Most San Francisco hotels allow dogs, and the national parks and Golden Gate National Recreation Area are one of the most popular places for dog walkers & dog fans in the city.  Dog owners who stay nearby will see many dogs on the trails, or at Crissy Field, and throughout the park system.  This might not only have negative PR implications, but it will be a negative impact on those that see dogs throughout the city, parks, and out our back door.  Almost all hotels in San Francisco allow dogs including the top boutique companies Joie de Vivre (ed note: kaput), Kimpton and luxury properties like Ritz Carlton, Four Seasons, St. Regis and others.  San Francisco is one of the most dog friendly cities in the country, with the parks being a perfect place for dogs and owners to enjoy. To not allow dogs is going against the bigger trend in dog policies here in San Francisco.  A no pet policy is antithetical to the prevailing opinion of most Americans and pet owners in the country today.  There are 78 million dogs in the U.S. and 39% of U.S. households own at least one dog. With the abundance of dogs throughout SF and the parks, a decision to disallow pets will have obvious negative PR implications.  At this point, it’s almost assumed that they are allowed, and “no” is never part of a good guest experience.

II)           FINANCIAL DATA:

At one unnamed property: “We’re at $24,475 in dog fees through October YTD.  It’s a one-time $75.00 fee (most fees are much less, but balanced against the full cost of dog sitter or kennel if guest were to leave them at home), regardless of length of stay.  The audit report only gives posting totals, so no way to track Room Night production.  I’d make an educated guess of 550 – 600 total Room Nights YTD.  The total doesn’t breakdown evenly when divided by $75 because we had a few in there we only charged $50 because their res was already OTB when we changed the fee and a few we charged $100 because they had more than 2 dogs. It is our opinion that these guests would have stayed elsewhere with their pets, and we would have lost the room nights.  This does not account for incremental revenues. [ed note: this is from a peer who doesn't know I am posting this. It's anonymous, but if ANYONE has ANY concern at all re: financial disclosure, I will take this down].

Incrememental revenues = selling branded or logo’d hotel merchandise to dog owners – whether homemade local treats or a rubber ball with your brand stamped on it.

III)          Articles, info, data:

a)    Tripadvisor Pet Travel report.

“In a TripAdvisor survey of more than 1,100 pet owners in the United States, nearly half said they plan to travel with their animal within the next 12 months.”

b)   Pet Friendly Travel  – via Bella Dog magazine, also talks about airline fee frustrations, and more:

The majority of pet owners surveyed (61 percent) said they travel more than 50 mi. (80 km.) with their pets at least once a year, with 38 percent of those pet owners stating that they travel as often as once a month with their pets.  Pet friendly travel still is almost exclusively for dogs, with over half of the pet owners (61 percent) saying that they choose to travel with their dogs (33 percent of pet owners travel with their cats).  (Source:  Bella Dog magazine)

c)    According to the U.S. Travel Association:  “Pets make great travel companions. Over 49 percent of U.S. adult leisure travelers consider their pet to be part of the family and 18 percent of U.S. adult leisure travelers usually take their pets with them when they travel. (Source: travelhorizons^TM, July 2009”)

d)   Forbes: pet friendly hotels were due to market forces demanding it -

Why the change of heart? Travelers with pets are a huge market, and one that is untapped at the luxury level. According to the Washington, D.C.-based Travel Industry Association of America, there are 62 million dog owners in the U.S., and 29 million of those hit the road with their dogs in tow. The latest American Express Leisure Travel survey, released in October 2003, found that 13% of its respondents described an ideal vacation as one that is “pet-friendly.”

e)    Hotels Dogs Travel (via HotelMarketing.com) -

The nation’s pet boarding industry has figured out it doesn’t take much persuasion to get pet owners, often guilty about dropping their dog or cat off at a kennel while they head off on vacation, to pay extra for pampering: In the last five years, spending on pet services including boarding and grooming has more than doubled to $2.5 billion, according to the American Pet Products Manufacturers Association in Greenwich, Conn.

f)     Hotels renting pooches to guests without dogs via Time.com

These days, the coziest hotel trend has nothing to do with plush mattresses or comfy slippers. It’s about catering to guests who had to leave their furry, feathered or finned family members at home. This spring the Fairmont in Sonoma, Calif., added a dog to its staff, a chocolate Labrador named Zeus who is tasked with such things as welcoming guests in the lobby and going on hikes with them — or what is referred to, in corporate jargon, as “interactive guest appreciation.” (I have seen this in many JDV hotels as well. This trend started after studies showed that petting a dog or having a pet around reduces stress and increases health)

g)    Fairmont’s doggy ambassador delights guests (same as above, but more info)

h)   “Top Dog Hotels” via USA Today (same Tripadvisor rankings from above, but a little more about the hotels and amenities)

i)     Recent press release for Bernardus in Carmel Valley via SF Gate PRWire (the fact that someone does a press release is typically because the new amenity has relative strength or equity to the brand and bottom line)

j)      Kimpton’s Argonaut with their “Howl-O-Ween” dog costume contest (something that drives room nights and community around Kimpton property)

k) 15% of people are allergic to dogs (not including the 30% of asthma sufferers who are allergic), while 40% of people own dogs. With stringent cleaning methods (or just normal ones), i have yet to hear of an allergic person with a problem inside a room, let alone ever knowing whether they had been place in a room previously occupied by a dog.  For those truly allergic, they usually mention it, and it’s never an issue to accommodate all those concerned.  What’s more, hotels have been dealing with chemical sensitivity and allergies to things like down, etc, for years.  One more thing won’t be a major impact or operational issue.

l) Dogs that travel with people are typically incredibly well behaved, and often better and more quiet than children.  We also know weight limits are not necessary, because a) most large breed owners don’t travel with their pets, and b) a chihuaha can do as much, if not more, damage as a larger breed.  But if that rare bark is a concern to owners, remember  that acoustics won’t be an issue – a crying baby is louder than a dog in most acoustic tests: http://www.controlnoise.com/storage/dBSoundproofingChart.pdf

IV)         Conclusion

We have seen a lot more conversation on an internal industry level and an external marketing level because it has become so much more popular in recent years.   Opening without a pet-friendly policy, only to allow it later, would create PR issues because it is difficult to recapture initial interest after telling people that you are not dog friendly.

Observing and mulling all the above data and information, it seems pretty obvious what the right choice is for your guests, and your hotel.  Any complications, of which there are few and it’s very rare, is what needs to be discussed further.  I have a couple dog policies I can share, if you need them…. but overall, we feel strongly that a pet friendly policy should be approved for any hotel looking to drive revenues and capture new markets.

Hope this helps guide the decision making process.

Here’s an article on Room Key, the hotel brand search engine.

Upshot (summary via TNOOZ):

Choice Hotels International, Hilton Worldwide, Hyatt Hotels, InterContinental Hotels, Marriott International and Wyndham Hotel Group have combined to establish the joint venture under the leadership of CEO John Davis, founder of the Pegasus hotel distribution and technology service.”

And here is Barb Delollis from USA Today with a Facebook post that sparked some awesome conversation.

This is my commentary from that Facebook post (which, as it happens, is by far the most interesting post I have seen on Facebook in years, and no… not because of my response).

I am excited about Room Key for many reasons…. I hope the below is succinct but helpful in understanding why this is an exciting move forward…..

It’s not a better solution, but that’s okay. It’s a flawed solution that has monopolistic traction – and this entry from Room Key is simply the start of their traction. It’s like Google Plus vs Facebook….. just because Facebook has more traction doesn’t mean it’s a better option.

It’s all new tech, and layered diversification coupled with competition in the early decades of online travel distribution means that the booking process is exhausting and varied…. one site has not, and will not, *EVER* serve *every* single on of your needs.

If you can honestly say you book solely on one site, and one site alone… more power to you, and that’s a rare thing – a branded OTA travel consumer. Travelers that use OTA’s are deal shoppers, so the idea that they would use one site and stick with that due to loyalty is odd, when it’s myopic only to consider one site with the scores of other’s available. A real travel consumer isn’t going to stick to one OTA, and that process of shopping around has become somewhat of a liability…. and an exhausting one. In the last 5 years, the only thing that OTA’s have done is to train the smart revenue managers to yield such that the best available rate is *ALWAYS* directly on the brand website…. in this, you maintain as much rate integrity and control of inventory as possible. That being said, the gestapo like extortion and bullying from OTA’s like Expedia has backfired, and savvy travel consumers are starting to be trained that the best deal is ALWAYS on the hotel website. OTA’s know this, and they are losing consumers due to it.

Room Key is a brand new product that is put together by some of the biggest players in the hotel industry ( Hilton Hotels & Resorts, Wyndham Worldwide, Choice Hotels, Marriott Hotel, InterContinental, Hyatt Hotels as well as Pegasus), and it’s a new product that is *BRILLIANTLY* devised, the UI is quite easily the best online booking product that exists, currently (although KAYAK’s mobile app is stellar). It is filling a sorely needed gap in a crowded space – a simple, concise, uncluttered way to easily find hotel rates and book without the pain of being upsold on value ads and overwhelming options. The OTA’s like Expedia or Travelocity are dinosaurs, and this new option is filling the space that travelers are clamoring for.

I understand your comments about being a consumer, and wanting the simplest option – what you are forgetting is that OTA’s had a chance to offer the simplest options for booking, but have failed in an overarching attempt to increase revenues by destroying any functionality or user experience on their sites. This is all new technology, so the best travel experience hasn’t even been developed yet. Just because one of the OTA’s has a monopoly doesn’t mean it’s the best thing for the consumer. This is the first attempt at our hotel industry to create that experience.

Room Key is coming at the right time – it mimics Google in a light user interface that is concise, simple, and clean.

The other side of this is how Google will lay waste to the uneven and disjointed online travel world -

Google Search + Google Travel + Google Flight + Google Hotel + Google Plus (in searches) = dominance & sheer terror for the existing landscape of online distribution.

WHAAAAAAaaaaaaaaaaaaT did you say???

The power of Groupon’s success has surely been due to the happy consumers rambling on about the score they just made.  You can’t go anywhere and not see it.  The crisis of perception is that everyone is beside themselves with how “cool” coupon sites are, but only regard them from the perspective of being a consumer. Stop being selfish, and think about these poor businesses. Everyone seems to be in a mindless consumer mindset when they consider them, and especially when they sign on to participate in them; all the proselytizers are consumer advocates or discounters. I don’t know one thoughtful business person that finds them to be anything but frightening, even if deemed necessary (and in hospitality, they never are necessary). They can surely bring business into an operation with low to no overhead, huge margins, or zero variable operational costs…. but to businesses like hotels, it’s a losing proposition.  Please, check your giddiness at the door – and hope these coupon publishers are a fad, because if they are not we are in big trouble. Whether you scored a good deal on Living Social is moot, so put on your business acumen hat… and let’s explore!  This post is meant to be a simple, accessible cautionary tale to Hoteliers and the like.  I am not covering entirely new ground.  But, I rather have something for us to refer to than having to explain my dour skepticism to each person incredulous as to how I am “missing the biggest thing ever”.

In fact, I wouldn’t mind being known as that one guy that stopped the entire hospitality industry from participating in any form of online coupon site.  At least, realize the impacts.

Search “Is Groupon Killing” in Google, or simply click this link.

Do you here a ticking sound? Is that for us or for Groupon?

[Leafing through pages of Google results] Leeeet’s seeeeeee….

They are killing brands, retailing, local food, restaurants, photography, and more. Whether this is hyperbolic is beside the point… the issue is that you can see significant duress about the long term efficacy of these coupon sites.  People are talking about the drawbacks of coupon sites much more often, and deeply considering the short term gain versus long term costs.  In fact, I don’t have to wax endlessly, for once, because a gentleman and scholar from DAVIDID Blog…. nailed it succinctly.

“But if marketing is defined as increasing perceived consumer value in service of increasing sales at a profit, we need to look beyond Groupon’s short-term sales impact, and ask how it might be influencing perceived brand value.

On this matter, we have serious concerns.  Groupon, and its ilk, unfortunately is training people to expect a coupon on most anything.  And that means that unless people find a deal, they’re less likely to buy at full price, preferring to wait until the next coupon cycle.  This applies to current customers who are used to paying full price, and new customers who would now never dream of paying full price.  The result:  More and more people will be trained to only buy on deal, which, of course, diminishes the perceived value of a brand both short and long-term.”

In fact, it can be even simpler when you consider this article about Groupon becoming the online Walmart that kills small business.  ”The ratio of consumer savings vs business profit can kill small business“.  Math, of course, is known to be frustratingly honest.  This has been quite apparent with Groupon’s expansion into Europe, damaging small brands.  The New York times also comments on Groupon altering and destroying proper retailing, while other people muse about the crush of business that they can’t manage (more Groupon vs restaurants commentary here and here) - but I don’t want to stray too far from my original point:

A discount seeking non-branded consumer is not your guest.

If you ask me, it's not that uncertain, but it is surely a dead end.

If you are considering doing an online coupon, please do some research and find out if any of your competitors or professional peers have information regarding how their coupon went. In fact, the buzz and excitement is leaving us blind, so that a “successful” groupon customer might not realize all the associated costs. A restaurateur breaks down the costs in this article, “5,772 new customers — how can I not love Groupon?”, and the results are unnerving.  I do not understand how we were able to become this intoxicated with the shiny new toy, but the long term costs are even more problematic than the short term costs, which are, funny enough, also problematic.

The one thing for sure is this: someone looking for a deal will not become branded as they are already branded for the deal. Post stay, they won’t come back to the hotel, because they will be disgusted with normal rates. Groupon, Living Social, and other coupon advocates will claim that standard rates are a barrier to entry, and the coupon will allow for someone to experiment prior to committing to a brand or standard rates.  If this demographic exists, the onus is on the coupon sites to demonstrate newfound brand loyalty due to original Groupon-style sales.  That is a very meaningful measurement that equals equity for coupon sites, and would, in all likelihood, sell a hotel on a deal like these coupons. But it’s simply not likely, and I haven’t heard of these scenarios. I think it’s more selling and wishful thinking than careful logic on the part of Groupon and their clones.  But these Coupon Sites were never about the business side of things.

A consumer using any of these coupons will simply go back to the branded coupon site and buy the *next* hotel deal. Brand doesn’t matter to them, which is why they are shopping via a coupon site.  The deal is the brand. They won’t be your guests.

In fact, this article suggests a few ways that Groupon is going to kill your business, and one aspect is that you will become branded as a discounter.  Is that healthy for your year end?  How about 5 years from now as the economy strengthens? Will you get the rate back you gave up during the 2008 recession by discounting to no end?  So you don’t have to continually jump off to new links, I will repost the 4 concerns from the prior linked article:

1. You may always be fishing for customers.

2. You may be branded as a discounter.

3. You will get finicky and demanding customers who suck.

4. It conditions people that price is the only benefit.

The fourth comment is also vital.  It alters your pricing model, and suggests that your brand experience has no equity. Coupons destroy perceived value in your rooms. It immediately destroys the original value of the room to the Groupon user (would you pay 2x the rate you paid for your last stay?  No. No one will.), and it will confuse a branded guest, as well.  If a guest is branded and paying rack rate, then a coupon either means i) they are angry that their brand would distill their hotel stay by allowing a specific demographic water down the experience (in a way, it’s subsidizing rates so that rack rate guests pay more for a lesser experience… please explain how that might be fair?), or, possibly worse – ii) the branded guest who would have booked at full rate is, literally, given free money by the hotel.  I have friends who were planning a reunion at a specific property who found a coupon for the hotel they planned to book.  That’s 2 for 1 that was going to pay rack rate.  Smart business?

In summation – Coupon Sites like Groupon, Living Social, and the others impact your business by:

a) attracting non branded deal seekers who don’t know you, that won’t be back at full rate, which then may re-establish your brand as a budget, discount brand.

and / or

b) handing out your profits to branded people that would have paid rack rate who stumbled upon the deal.

On the right path.

Pro coupon site people ruffle at these comments, but I haven’t seen any meaningful metric from Groupon or clone sites that suggest a decent percentage of guests become branded, loyal fans. In fact, what I *have* seen are relaxing, healing spas with cooler toting cheapskates, or deal seekers causing endless headaches and complexity for well positioned, established brands. Your rack rate paying guests don’t take half the energy than these critical, troublesome deal seekers. A generalization perhaps, but often seen in practice.  Just ask the desk or prop level ops people how they feel about it.

Yes there are plenty of wonderful coupon site users – I can be one of them at times.  In fact, the only way I use these sites now is to wait for a deal of a brand I already patronize.  I am simply waiting for a business to give me free money.  That’s nothing but damaging to a brand.

I leave you with these cautionary words:

It’s not a good investment. For some businesses, it may work short term, but it can also hurt long term.  For hotels, it simply doesn’t make any sense.  I hope it’s a fad, but stay far away – because if the coupon craze is here to stay, it’s going to redefine the economy of your business.

Lot of sleepless nights ahead for Groupon

Thanks for reading, now go tell your GM or DOSM.  Do it now!  If you still don’t get it… good luck out there.

I don’t always have stuff hit me, but it hit me today.

So I hadn’t figured out why Tripadvisor’s Restaurant Reviews had recently, so vigorously, taken off.  For those of us in hospitality who are aware of our brands online, it was hard to miss.  It is vital to stay on top of all conversation, reviews, and mentions, and whether through Google Alerts, or a random internet search… you noticed restaurants began to get reviews on Tripadvisor. It’s not really a surprise, and it is a completely natural direction for a travel site like TA.  But, where there wasn’t even an option to review or add restaurants until a couple months ago, the frequency of seeing reviews pop up is gaining momentum. MASSIVE momentum… and it seemed like it had to be larger than the Tripadvisor user base. I really noticed when some of our restaurants were ending up with as many, if not more, reviews than Yelp. I hadn’t been able to figure it out, but when I just added one of our newly opened restaurants to the Tripadvisor database, it used *FACEBOOK CONNECT* to populate the information about the restaurant, meaning the database lives both in Tripadvisor, where people can review it natively from that site, as well as inside Facebook as an application called “Tripadvisor Local Picks”.

Uh oh Yelp.

Yelpers can be attention seekers, but the platform of Facebook is the mecca of ME ME ME. If there is one thing a Facebooker is going to enjoy doing, it’s share their opinion – *ESPECIALLY* to their real live network of people who may be affected (or forewarned) by a review. It is obviously a natural part of networking, community, and connecting.  Oh.. it also vests itself in ego, and the desire to establish equity in social status. Go figure… but it never hurt, that while recommending a nice romantic restaurant to a friend, an ex fling sees your exciting life.  I am certainly not claiming this to be me, but the fact that studies have been done on detecting narcissism through facebook profiles, it’s certainly something that exists.  Here is another article that goes a bit deeper into social media and ego.

This means that, alongside the Tripadvisor user base populating restaurant reviews, we now have unwitting Facebook users contributing content to that database. You have a 400 million person population casually being redirected to Tripadvisor to help add content.  But this content generation is happening *from within Facebook*. This app makes it so that FB users are not leaving the site.  This reinforces the travel industry understanding that we can no longer create community when competing with communities like Facebook.  If Tripadvisor is learning this, and allowing off-site content generation, what do you think of your small community?  You need to congregate where people already exist, and reach out to them where they are online, not where you wish them to be (cue $100,000 website laden with bulky flash and slow load times).

In the meantime, you may have noticed Facebook searches being populated with hotel listings, and other brand names in wider internet searches. If a 400 million user population gets used to searching brand names and businesses for reviews, and information… that is the beginning of some powerful commerce. What’s more, Yelp could quickly become irrelevant under the crushing weight of Facebook’s population eager to add content for Tripadvisor, whether they know what they are doing or not.  It has been suggested that Facebook users don’t always know what they are doing (warning: hilarity ensues. Yes I know I have posted that a couple times.  It is too funny).

The way these two are dancing, I could see a marriage in the future. I think they want to date for a bit, but they might become a bit more popular than some of the other options out there. I am not saying Facebook could acquire Tripadvisor, but I am wondering what Google is going to do now that Yelp is off the table, or if that is something that might be revisited? Facebook and Tripadvisor paired could become a brutal force against Google’s plans, not to mention OTA’s like Expedia.  As for Yelp… they might not even see it coming.  Opentable reviews have already legitimized the review process in a way that Yelp has not been capable of.  Reviewing for friends, family, and network in a Facebook model creates more legitimacy still.

As always, I might be missing something. I know FB Connect works with Yelp in some ways, but I don’t think you can generate content from within a Facebook app?  There is so much to consider, I might be off.  But it’s always fun to watch this stuff develop. As always I promise to keep you posted. =)

I know, in these times, you cannot maintain total rate integrity without looking like an out of touch management group.  Others try to maintain their rates by laughing at their clients and just being rude, something so pompous and idiotic I need to quote it here.  CMO Scott Williams, from Morgans Hotel Group (on behalf of the Clift in SF) said it professional as can be:

““You can bury your head in the sand, discount your rooms, piss your brand away. But we are a luxury brand and we will act like a luxury brand. I’m going to look back at this recession and say ‘we didn’t just drop our pants.’

He has a way of making a point, doesn’t he?  It is a valid issue, no matter how garrish, classless, and totally out of touch he is.  (Even using that “L” word can get you in trouble.  The current “luxury” fiasco that has everyone up in arms, from groups to spas.)  Not everyone is maintaining rates with such bravado.  Choice Hotels seems to be doing a great job.

Whatever the case, the question is clear.  Where the heck are our revenue managers?

Well… after reading this article that suggests group rates are higher than transient/FIT rates (based off Star numbers), we might be able to guess where they are…out of work.

Is it possible that a significant amount of hotels pulled the plug on the pricey, but imperative, revenue manager?  I have heard of a couple properties letting them go, or restructuring so a Rez manager *becomes* a rev manager at the same payscale…. but I am starting to think they have all been fired from the hotels that actually had them, possibly due to the economic problems we are experiencing.  That’s my best guest, and it might be wrong…. but they seem to have gone *poof* and vanished.

I know the industry has been slow to grasp the concept of revenue management. As I mentioned, many still think it is a reservation manager under the Rooms Division, but that’s a majour mistake.  If this new trending information isn’t enough to help hotels realize that it is imperative to have one, I am not sure what will get the industry to really take notice.  A Revenue Manager has the final say on negotiations with the Director of Sales and Rooms… as well as reports directly to the GM so their experienced leadership can help helm the ship….but it is vital to have one, and it simply seems the concept of paying one an appropriate salary has fallen by the wayside.

In an effort to conserve on salary, it seems that more Revenue Managers have popped up with the same pay they had as a rez manager… seeming to be some off-handed consolation from archaic leadership just trying to get a grip on the new position, and blindly filling it (“doesn’t cost me a cent? sounds like the same thing to me.” mentality).  But a title does not a Revenue Manager make.  It simply means they don’t “get” what a revenue manager is, or does.  What’s more, the revenue management job is so intensive, so incredibly complex, and constantly changing in the *very* real time (the best revenue managers I know work 24 hours a day, basically)… I think a proper revenue manager should possibly be the highest paid person on a hotel team, short of the GM.  Might be a big statement, but even I don’t totally understand revenue management…. and I know these people are vital – possibly more so than the rooms manager.

So why do we know there is a problem beyond Group rates being higher than Transient/FIT rates?

Well.. No rate parity at all in majour markets (Las Vegas, Miami) and boutique markets (anyone look at rates in Monterey, CA the last couple months?).   What’s more, Revenue Management has taken a noticeable hit that has been trending since before this total economic meltdown, and polls suggest that thoughtful rate control has turned into a panic of sorts.  Ownership wants market share, even if it is out of step with the rates, often thinking “a full hotel is a happy hotel”.  This is where the pressure for Revenue Managers comes in… listening to the owners even if it is against their own best interests (lack of rate integrity kills future biz, and it will bite the person controlling it in the rump down the line).

With the economy, Rev Managers took a hit and now there is a dirth of any real control at all. It’s frustrating to see.  A lot of missed opportunities here, and a lot of smart people (like HotelSphere’s *incredible* post) are seeing that. I think this is an anomoly, and nothing more?  At least… I hope it is.  The real question is “Can our business work like this long term”?  I highly doubt it, which is why 2009 has got to be the year that Hotels cry out “PARITY!!” as a battle cry, and remain completely focused on integrity (Page 3 of this New England Hotel Mag has a great primer for Rev Management and maintaing rate integrity).

I know, as an owner and manager, you want to employ a lot of people.  What’s more, you especially don’t want to let valued staff go in this economy.  But it is what we do when times are rough, and we need to maintain rate for the longevity of your business rather than trade for occupancy for a handful of employees.  You won’t be able to employ them in the future if you drop the bottom out now, and what’s more – of the staff you do have left you won’t be able to pay a good wage.  This all degrades fairly quickly, and is obviously more complex than I could ever explain in this space (or totally understand).

So what do you think?  Do you, gentle readers, think they are still out there feeling constant pressure to listen to ownership, or did hotels let them go in droves when the downturn happened?  Is the industry just not getting “revenue management” yet?  I would love to know your thoughts.

Until then…. do whatever it takes to suck it up now.  Rather than panicking and having to pay a grave price in the near future (that may last longer than the downturn), do your due diligence, measure, watch, and manage.  Emotional rate management doesn’t help your business, and you don’t have the money to lose right now.  I have never been a big fan of paying with credit…. and in this situation it is just one post-dated check that your hotel shouldn’t write.  Don’t pay now with something you won’t be able to get back later.  It’s a bad move, and you need to trust your revenue manager much more than you are now.  Or better yet, hire one.