To remain competitive in such a fast-paced, ever-changing, and advancing industry, it's essential to incorporate the latest tools and technologies into your revenue strategies.

At McKibbon Hospitality, we've honed our approach to revenue strategy by forming a three-pronged revenue generation team composed of our Revenue Management, Sales & Marketing and eCommerce departments.

Collaboratively forming three legs of a stool, it is our belief that these three disciplines cannot - and should not - stand on their own; they should be in balance. Direct sales must be in place, pricing strategies must be set, and digital marketing and eCommerce channels must be open and operating in order to produce positive results. Simply put, if you were to pull out one of these legs, everyone falls, highlighting the importance of their symbiotic relationship.

This three-pronged approach began several years ago, allowing us to break down silos and improve communication between departments, fostering a greater sense of trust and collaboration, ultimately bringing our teams closer together to work toward a common goal in order to better support and guide our on-property leadership teams. With the success we have seen using this approach, this continues to be how we operate today.

Our strategy is driven by our overarching goal to win in market share. To win in market share, we must first understand the amount of demand coming into a market and base our holistic strategies and action plans on that estimated demand. To say we need to sell out each night is unrealistic, and so our strategies need to be appropriate to the amount of demand coming in during that timeframe, i.e., sell out nights should focus on higher ADR segments while periods of low demand prompt us to focus on all funnels and channels being open.

There is an expectation and requirement across all three disciplines that we are coordinating alongside the property sales and operations teams to put in place the optimal segmentation and channel mix. These can change by day of week, weekly, monthly, or seasonally. Teams that are successful are able to communicate their overall strategic plan as one cohesive unit, aligned and moving in the same direction. Telling the story is a critical component of the success of a commercial team. Telling the story is not just directed towards hotel teams, but also managing up to asset managers or ownership groups.

As a collective and unified revenue generation team, we're passionate about applying new, innovative technology to our "back to the basics" models of success. Recently, we were presented with a real-world scenario that allowed us to apply our methodology effectively.

Case Study

In 2021, we assumed management of an extended-stay property located within a growing leisure market. Prior to takeover, our Revenue Management department identified forward-looking opportunities through a combination of both third-party and proprietary tools such as Demand360 and Brand Pace Reports, evaluating opportunities across channel and segment mix. From there, we recommended an optimal mix to our counterparts in Sales and eCommerce to discuss if those strategies were feasible based on their expertise and knowledge. Adjustments to the strategies were made in conjunction with the property-based teams so everyone was aligned with one direction.

One of the first steps was to proactively review retail pricing strategy through third-party tools such as OTA Insight and RevenueStrategy. Identifying and positioning the benchmark retail rate is a critical step as a significant number of sub-segments are positioned based off of the published retail rate. It is not only important to look at your benchmark rate but also any premiums loaded across the room types to ensure that all room types are sellable and not just sitting on the shelf. Sellable not only means being visible (on the shelf) to the customer, but is there an appetite to actually purchase the room at the published price point?

Additionally, as a best practice, we ensured the brand tools were set up correctly to optimize retail pricing recommendations based on brand propriety algorithms. The brand tools provide a great starting point due to the power of the algorithms and the historical and future looking data components they utilize in their decision-making abilities. Ensuring that we, as a team, are feeding the systems correct forecasts is another critical step for accuracy of the recommendations. Sales must provide and assist with accurate group and negotiated forecasts, while eCommerce, in conjunction with Revenue Management, should identify forecast opportunities in the transient segments. These forecasts will assist in achieving a more accurate baseline recommendation from the brand tool.

Building on this foundation, as a next step we dug into sub-segment detail, both historical and forward-looking, to identify where our focus should be. Leveraging third party tools such as Demand360 or Kalibri allowed us to see if current strategies needed updating or tweaking or holding. Based on the findings, we discussed with the on-property team as well as our Sales & Marketing and eCommerce departments to implement a holistic approach to each of these segments, i.e., targeting more per diem reservations, focusing on weekend group, and utilizing TravelAds to increase visibility.

From a Sales & Marketing perspective, we focused our attention on Local Negotiated Rates (LNRs) and direct sales efforts. We supported the on-property team who have eyes and ears on their market and a deep understanding of the competitive set and local accounts. Our backyard accounts have always been, and will always be, a focus and priority. It is imperative that our on-property teams have their "feet on the streets" as we like to say, and that we regularly connect in-person with our clients. We place heavy emphasis and focus on building relationships and delivering the right customer experience once we get these accounts through our front doors. While our on-property field teams are ultimately accountable for this relationship building, our above-property sales support team walked alongside them to ensure they were supported and always focused on big picture strategy.

As one of the legs of the stool and a critical pillar of our strategy, our eCommerce team started with an audit to understand the hotel's digital performance. Our team used a mix of tools built in-house with Excel and PowerBi and third-party subscriptions to SEO, Paid Seach, and competitive analysis tools for a comprehensive approach. Once we had the complete digital picture, we developed a plan to ensure the hotel captured enough demand to be successful.

During the transition of this hotel property to our management portfolio, we discovered that a like-branded property had reflagged a few months prior, causing confusion in the market. Many of the local accounts were still referring customers to the old hotel name and old hotel website, which was a broken link. Leveraging our suite of tools, we created a list of local partners and universities and worked with our local sales team to redirect that business to our hotel.

By going through that process, we were confident to reduce our advertising spend and realize increased traffic coming to the website. That freed up crucial advertising dollars that we could use to target other channels and specific segments that were in line with our overall optimal mix.

Collaboration amongst all three disciplines and working through our unique processes allowed us to capture and seize the demand that the hotel vacated, increasing our exposure in the market long-term. Prior to our takeover, the hotel ranked 3 of 8 in RevPAR. Post-takeover, the hotel ascended to the rank of 1 of 8 and was beating the second ranked hotel by a significant $20 premium in RevPAR.

While each of our revenue disciplines must constantly adopt and leverage technology and tools to help uncover opportunities, collect and analyze the data, and ultimately produce revenue, it can be easy to forget the basic, tried-and-true principles that have historically led us to securing business and producing results. Use technology to your advantage to expedite processes and improve efficiencies, but never forget that there's something to be said for the elements of collaboration and human intervention. Regular pulse checks and constant communication allow us to assess and adjust if something isn't working. In order to remain competitive and fully aligned, we must constantly stay on top of the strategies we've put in place, continually evaluating for success and pivoting quickly, as needed.

The hospitality industry is evolving at an unprecedented pace, driven by technological advancements and shifting customer expectations. However, amidst this fast-paced transformation, the core principles of revenue generation remain as crucial as ever. McKibbon Hospitality's holistic strategy, incorporating Revenue Management, Sales & Marketing, and eCommerce, exemplifies the power of combining technology with traditional approaches.

By leveraging tools such as Demand360/Agency360, Kalibri, OTA Insight, and RevenueStrategy, while also maintaining a focus on collaborative efforts and human insights, we've achieved remarkable results, propelling our properties to the forefront of the market. As the industry continues to evolve, the fusion of technology and fundamental strategies will undoubtedly remain a guiding principle for sustained success.

This article was a collaborative effort involving McKibbon Hospitality's Vice President of Revenue Management, Jihad Lotfi, and Vice President of Digital Marketing & eCommerce, Ben Golson.

*Reprinted from the Hotel Business Review with permission from http://www.hotelexecutive.com/.