Weekly Reading (for the class of December 8th, 2010)

Resume of the article

In the article,"Expedia on how to grow ADR without impacting occupancy", we talk about several strategies that can be used in order to increase the rates at which the rooms are sold. It is a fact that over the years the way clients act has changed in a huge way. Following this artcile, the autor enumerates the strategies that are used to higher the Average Daily Rate:
1. Adjust the segmentation that are yieldable. By targeting the OTA's, a hotel can higher its rates by letting them compete between each other. That is because the rates for OTA's fluctuate whether as the rates of local contracts are a more fixed rate so you can not increase or decrease them.
2.Implementing a need strategy. With todays tendency, it is more and more common to have a revenue management department that can see and forecast when will be peak and low seasons. In the same way the can forcast the black out dates for the coming years as well. By doing that they are anticipating and already making sur that several weeks before an event hotels are fully booked and so the rates increase until a top level.
3. Add values to the rates. This comes to the point when hotels decide to give promotions like for instance give a specific higher rate but offer a breakfast with the rates or an other service
4. Do not give away like that upgraded rooms. A problems is often that when there is a fault in reservation or something, the reception upgrade the room of the client in order to create loyalty. The problem is that this way of doing is a bit overused and that then when there is an upgrade needed there is no possibility anymore
5.Analyse high and low season in order to increase the rates in high season because at that moment everyone wants a room and decrease it when it is calmer.

Personal Comment

This article shows that the world is changing today and that the methods that were used in the past are not relevant anymore. We hear more and more talks about revenue management and the importance of it and I think that it is an interesting point because it gets more and more difficult to fidelize clients. People search the best deal especially in times of crisis and sothere are not loyal to the brand anymore but to the price. For this I think that revenue management plays a huge role in making sure a four or five star hotel still gets there money because without revenue a business is not possible.