Presentation by senior students studying at the Institut Paul Bocuse

1. TOTAL REVENUE
MANAGEMENT TOOLS
Quentin Abolo / Amandine
Anaf -Grisard/ Jean - Noël
Cannac/ Eugénie Colatrella /
Anna Lalain / Romain Manus
/ Kim Mermoz/ Alexis
Montcel / Louis Volot
HR4RM

2. OUR GOALS
To develop a set of tools to assist these departments see the "big
picture" as well as propose new KPI's and TRM appropriate bonus
system. This is seen to be the foundation from which hotels will be
able to start a process that will lead to a systematic optimisation of
total revenue in the next 3-5 years.
Our considerations :
•Creating shared values
•Being innovative
•Sustainability
•Experience economy (4 E’s )

3. CONTENT:
BY CONSIDERING THE NEW
CHALLENGE OF REVENUE
MANAGEMENT1) Technology influencing commercial transactions and strategy
2) On-going changing consumer behavior
3) On-going issues related to organizational variables (Knowledge
management and metrics )

4. INTRODUCTION TOTAL REVENUE
MANAGEMENT
o“The concept of total Revenue Management is simply about
managing every revenue source at every guest touch point to
it’s maximum profitability for the entire hotel or resort asset”
(Bonnie Buckheister, 2013)
oDynamic pricing will replace fixed pricing in outlets
oEverything will be based on customer behavior
oAll sell strategies will be based on accurate demand forecasting

5. DIFFERENT TYPE OF REVENUE
Define Core and Ancillary revenues & Partnerships :
Core revenue:
Room Revenue
?
Ancillaries
Revenue
Catering
Function
space
Parking
Water sport
area
Restaurant
& Bars
Golf Spa
Welness
center
Partnerships
Airport
Bus (transfer
to the resort)
Excursions
(outdoors)
Boat
Retail shops in
the city
Outdoor bar
and restaurant
Airline
companies

6. THE EXPERIENCE ECONOMY : THE
4E’S
Pine and Gilmore (1998)
Resort position : « posit that richest
- experiences such as going to
Disney World or gambling in a Las
Vegas Casino - encompass aspects
of all four realms, forming a “sweet
spot”, around the area where the
spectra meet. »
 May use this organizational
scheme to evaluate the mix of
activities in current offerings
The analysis may provide
information to reveal strengths and
weaknesses in each of the realms

7. TECHNOLOGY INFLUENCING
COMMERCIAL TRANSACTIONS AND
STRATEGY Part 1

8. TECHNOLOGY
Magnetic badge
Labor cost management
Data collection

9. MAGNETIC BADGE
AVAILABLE OPTIONS
Room key
Energy consumption
Purchases > points credit
Visits
Points handover
HOW DOES IT WORK?
Booking online via direct channel:
Room rate
Optional extra points (at a lower rate than on-the-spot)
Gold card for loyal customers (points credit at a lower price)

10. TECHNOLOGY TO DRIVE COST
MANAGEMENT
SET UP OF LABOR COST SOFTWARE
Restaurants datas:
Hotel occupancy (transient - goups) /Capture ratio / seats nb / average length of meal / weather
Staffing guide:
Nb employees needed of X covers / Nb worked hour per days
Standard Forecast
According to the hotel datas & the staffing guide : theoritical plan
Labour Forecast
Manual input from the manager
=> Check the labor costs in order to ensure high profit

11. DATA TO COLLECT IN ORDER TO
ANALYZE CUSTOMER’S BEHAVIOUR
THESE CARDS SHOULD PROVIDE DATA’S ABOUT ANCILLARY CONSUMPTIONS LIKE:
 Which outlets/facilities are the most used by the guest
 At which time of the day the guest uses these outlets.
 How long these facilities are occupied by each customer
 How many points the guest spent in each outlet

12. BOOKING DATA’S TO LINK WITH
THE CARD
 Demographic
 Preferences
 Number of previous stays
 Loyalty level (if there is any)
 Booking channel
 Room type

13. ON-GOING CHANGING
CONSUMER BEHAVIOR Part 2

14. CUSTOMER BEHAVIOR
Process to use
database
Customer behaviors
and preferences

15. PROCESS
Define an accurate Forecatd
Data Analysis
Choose the right data
Collect Data

16. PROCESS STEP 1: COLLECT DATA
New
technologies,
at every
guest touch
points
General
software for
al the resort
•Instantaneous
•Reliable
Develop
visuals tools
Easy to
segment and
select

17. PROCESS STEP 2: CHOOSE THE
RIGHT DATA
Traditional data used
for RM
•Competitors analysis
•Historical data
•Calendar
•…
Data related to the
consumers’ behavior
inside the hotel
•Golf data
•Spa data
•F&B data
•….
Number of customers
who use the
golf/Number of total
customers
RevPATM Spa
Revenue per Available
Treatment Period
(Spa Treatment
Revenue/ (N° of
treatment Periods per
day x N° of treatment
Rooms))

18. PROCESS STEP 3: DATA ANALYSIS
Revenue
Managers will be
demand/profit
managers
Differentiate every
segment of
customers
(Transient vs.
Group,…)
Identify, Core,
Ancillary and
Partnership
revenue
•For example, in a
resort, does the core
revenue will really be
the rooms?

19. PROCESS STEP 4: DEFINE THE
ACCURATE FORECAST
Link the data
collecting system
with the DPMS
•Automatic integration of
data in the technological
tool
•Interface available from
each unit of the hotel,
even from mobile phones
All sell strategies will
be based on
accurate demand
forecasting
•Monitoring the results
•Adjust the strategy
Identify ideal
business mix
•What is the actual
business mix?
•How could we adjust the
business mix according
to data analysis?

20. SEGMENTATION : BEFORE
Traditionally, hotels segment their guests based on the purpose of
their stay:
Business or corporate
Leisure
Government
Contract
Tour and travel

21. TYPE OF CUSTOMERS:
GENERATIONAL
Millennials (1977-
2000)
Generation X (1965-
1976)
Baby Boomers (1946-
1964)

22. LIFESTYLE SEGMENTATION - VALS

23. Innovation: lifestyle changer, information ready, future
oriented
Thinkers: conservative, mature, reflective
Believers: economical, me too followers
Achievers: aspirational, hard working, moderate
Strivers: fun loving, up to date, overwhelmed
Experiencers: assertive, energetic, optimistic
Makers: hands-on, practical, self-reliant
Survivor: cautious, loyal, traditional

24. Innovation: buy new things, activities to experiment them, are not
influenced
Thinkers: take a lot of time before purchasing by looking deeper at
the details, can be influenced
Believers: believe in the right & wrong (activities such as gambling),
communities, team activities, verify information, often woman
Achievers: me first I want to, team activities, money is what matters,
high income, family activities=married, rely on technology
Strivers: center, importance of fashion and money to them, like
video games
Experiencers: exclusive and different activities, want everything,
sociable, 50% live with their parents
Makers: make their own trips, activities, mechanical activities, may
be perceive as anti-intellectual
Survivor: cautious, no risk activities, oldest, more time alone,
routine activities, loyal to brands, less use internet

25. BEHAVIOR
Woman represents 60% of bookings and revenue
Man are paying higher rate than woman
Lead times are greater in January & February 52 days, when in may
and June it is 35 days
20,7% are coming from mobile booking, 17,7% from tablets and
61,6% from desktop
59% of the bookings are made between 9am to 7pm and 22,6% from
8pm to 11pm

26. ON-GOING ISSUES
RELATED TO
ORGANIZATIONAL
VARIABLES
Part 3

27. ORGANISATIONAL STRUCTURE
Operations
Head of
operational
departments
Demand/profit
management
RM
Sales &
Marketing
Finance
Front
Office
Reception
nist
Concierge
desk
F&B
Bar
Restauran
ts
C&E
Wellness
& spa
Activities
Golf
Retail
Stores

28. TRAINING
oCross-training inside the organization in different department in order to
better understand how to optimize profit
oImplement the revenue management spirit
oBreak the boundaries between departments

29. METRICS
Define common metrics to measure the impact of RM on profit &
facilitate the communication between the different functions
Revenue
Costs
Profits

30. NEW METRICS
TRevPAR = Total Revenue / Number of Rooms
According to the core revenue + the ancillary revenue
•F&B
ROGR = Catering Revenue per Occupied Group Room
RevPASH = Revenue Per Available Seat Hour
 SPA
SProPOR = Spa Profit Per Occupied Rooms
Spa Utilization ratio (SUR) = Hours Treatment Sold / Hours Treatment Available
Average Treatment profit = Profit / Number of Treatment
ProPETH = Profit / Number Treatment Room Hours
Total Cost per Customer = Costs before guest arrival (total costs acquisition) + Costs during the guest stay
(total fixed and variable costs) + costs after the guest stay (service recovery)
Non consumed points = (Number of points spent / number of points bought)*100

31. BONUS
Total Profit
Market Share
Incremental Revenue
Non-consumed ratio
Define common goals to stimulate the “working together”

32. CONCLUSION
 Before room focus  now « big picture »
 Ideal Consumer : he buys more than he
consumes – non refundable purchase
 Revenue Manager will become profit strategist
 head of the organization
 New metrics based on profit
 A common goal No more sillos & individual
bonuses
 Total asset management