June 25, 2012

Are your 2013 Hotels Target, Budget and Marketing Plan Ready?

The first semester of 2012 is almost gone, it's time to think ahead....generally most hotels in the Gulf areas, have performed quite well in 1st quarter, and should perform well for Q4, to keep their owners happy.

If you are thinking going for a vacation trip prior to Ramadan, well it may be just a short break trip with Fly Dubai or Air Arabia to a nearby destination.


Summer for hoteliers is always a sign for scratching numbers, looking at your segmentation, start collecting Business Intelligence information (trustworthy), read newspapers, select articles, spot the new company to re-locate in your city...

2012 Semester 1 - Evaluation
Where do you stand in terms of Year to Date 2012 Budget? are you ahead of the exercise, or are you running behind your numbers? you must analyze your figures, and understand your performance. 

a) Negative Impact:
If you are in negative growth, then you need to strategically re-think your Q4. Will this be reflecting in a better mix, focus on higher rate contribution? You need to write down what went wrong:
- a wrong strategy (lack of availability, price resistance, turnaways analysis...)
- a new competitor with lower rates (don't only focus on their low rates, try to understand why did they use this strategy, do they have solid market base?),
- an existing competitor with distress inventory, 
- a less performing sales team (=> go segment by segment to understand + and -),
- a sales manager that went to work for a competitor,

b) Positive Impact:
- Is that temporary due to regional situations (Egypte, Levant...?),
- Being ahead from budget is good (you may have build a low budget target), however did you gain position in RGI? (Revenue Generation Index: RGI)
- Was there any hotel inventory that go under renovation / closure? (i.e the impact of Metropolitan Hotel Dubai demolition, 255 rooms)

Budget Elaboration
The basis of the budget comes from a detailed demand calendar. It's very important to map the events, conferences (Trade Centre, Exhibition Centre), sports exhibition game, trade fairs, concerts, GCC holidays (UAE, Saudi, Kuwait...), International holidays (Russia, UK, India, China, Brazil) and local bank holidays. This can be carry out by the revenue manager or the marketing coordinator.

Looking at your first semester exercise, we are working with hoteliers for which we have implemented a detailed daily market segmentation so that they are able to perform analytical analysis instead of reporting. Results: they started gaining back control of their inventory in order to maximize revenues.

It is more precise to leverage your Monday trends by explaining that your market segmentation is composed of 25% local corporate, 15% best available rate, 40% local DMC, 15% OTA and 5% crew, rather than saying on Monday we have leisure clientele. Huhh? what does leisure means? If 55% of my hotel is booked towards leisure segment, am I consider a leisure hotel? well only a detailed market segmentation can answer to you.

A real budget exercise is an activity that need to be elaborated through 90-120 days work and not 10 days.

We recommend hoteliers to implement a day by day budget for their market segmentation mix and revenues, because they will feel more in control, than programming a xx% increase, and dividing by 12 months, dividing by 30 days. That's the old school, and will not support your strategic thinking.

The General Manager or the Revenue Manager or Director of Sales, should effectively perform displacement calculations on all segments and channels to uncover hidden revenue potential. Additionally, you should analyze the real cost of each distribution channels by paying attention to the travel agent commission, agency fees, sales blitz investment, GCC trips investment, sales payroll, marketing collaterals, reservation costs, extra commission level (end of the year, 3-5% based on volume of targeted room nights).

For budget, you should also compare your year on year growth per main segments and sub segments, to make sure this tally with your marketing plan.

Marketing plan is a must for any hotel that has a strategic approach from the management. When you start managing 15-100 Million AED business, you deserve a structural approach.

Marketing Plan: back to basics
The marketing plan can function from two points: strategy and tactics. As I see, most of approved marketing plans are locked up in a book shelf, in the Sales Office, and don't move until the next season. 

It should be on the Director of Sales desk at all times, to prevent that we don't follow the right strategy as outline 8-12 months back. Tactical decision to introduce new rates, or extend rates, should be record so that you could notice if your volume of bookings has made the difference...or not.



When looking at strategic information, RSVP Hospitality would recommend:
* Ministry of Finance information (GDP Growth, Inflation rate...),
* Ministry of Tourism Information (Arrivals, airport statistics, airline routes...),
* Overall Hotel + Hotel / Apartment Supply,
* Market Source by origin,
* Market demand by main and sub segments,
* Benchmark reliable online source for RevPAR,
* Geo-political opportunities and threats,
* Distribution channels analysis (local CRS provider...),

Taking in consideration, that most of hotels in GCC are growing their online sales, a part of your marketing plan should be focused on Internet marketing and Online Distribution. 

Another part of your marketing plan, will be on to protect your corporate clients (individuals and groups), from giving them the best prices and ensure there are producing as per rational level. How you will communicate on that? How the sales team would be organized?

Shall you need assistance from expert, contact us at info@rsvp-hospitality.com or call us @ +971 50 589 3011 (UAE) or visit our website at www.rsvp-hospitality.com 

RSVP Hospitality
Better Information, Better Decision for Better Results 






June 05, 2012

Beauty World M.E - Download Conference Presentations !

To the Beauty World M.E attendees, please find attached my presentation for the conferences.

1) Key Performance Indicator - Spa and Beauty Salon Industry

RSVP Worldwide Presentation: 
How to use KPI's to effectively identify revenue opportunities.
Visit the link 

2) Maximizing profitability - Spa and Beauty Salon Industry

RSVP Worldwide Presentation: 
Maximizing efficiency and profitability of your business
Visit the link 

Thank you and keep asking questions about your concerns.

Romain

June 04, 2012

Spa Benchmarking: from where to get reliable research

Following the Beauty World Middle East, held on May 29-31st in Dubai World Trade Centre, RSVP Hospitality introduced a "Key Performance Indicator" and "Revenue Maximization" presentations to the audience.

Spa benchmarking is one of the "hottest" topics in the spa and hospitality industries. There are too many studies, surveys, that lack the credibility, integrity and quality especially when the data are exchanged without a third party. Who could rely on an Average Treatment room check from a competitor, down the street?

Poor information, suggestions or recommendations can be very harmful to your business, especially when you rely on this information to make operational, personnel, marketing and financial decisions.

We, all know that every owner like to claim, being the best in town, getting the best revenues and profitability. It's time to be realistic. Those reports may cost you less than USD 1 or 2 per day, so I am sure no one will have an objection, to get realistic accurate data.

The fact is you cannot manage what you cannot measure. It is important that you start tracking at least 03-05 metrics to review accurate analysis of your spa. Spa and Beauty salons needs to track numbers internally, as well as compare them with the market level information.



To my mind, there are three companies that can provide reliable information about Spa benchmarking in the Middle East:

1) Intelligent Spas
Website: http://www.intelligentspas.com
Type of Spas: ALL
Reports cost: USD 300.00

It is one of the dedicated spa-specific research company that collect, analyze and display report findings. Founded in Singapore, in 2001, Intelligent Spa assists in research in over 90 countries. Intelligent Spa also publishes a range of Spa Operational Manuals design to assist spa business raise services standard, improve customer satisfaction.

2) Ernst and Young
Website: http://www.ey.com/EM/en/Industries/Real-Estate
Type of Spas: Selected hotel spas
Reports cost: USD 795.00

3) PwC
Website: http://www.pwc.com/m1/en/publications/
Type of Spas: Selected hotel spas
Reports cost: TBD

Soon, there will be a fourth one (Q4, 2012 in the GCC) with The Benchmarking Alliance, visit the link: http://www.benchmarkingalliance.com

Just to clarify, Revenue Management is a principle that is used to enhance a firm's revenues by selling the right product to the right customer at the right time at the right price. It is important to note that Revenue Management is not meant to trick the customer into paying more than she or he is willing to pay. 

Instead, it is a way to acknowledging customers' different needs and perceptions of value and catering to those needs. 

Best Regards,

Romain @ RSVP-Hospitality