The inaugural Indo-China Hotel Revenue Management Seminar was held at the Queen Sirikit National Convention Centre, Bangkok, Thailand on September 26-27 2012.
The event brought the finest minds from the regions hospitality industry to Bangkok to share knowledge and discuss the latest best practices in the field of hotel revenue management.
What is Revenue Management?
Revenue management, also sometimes called yield management, is the practice of intelligently pricing products so as to maximise revenues (and usually profit!). The primary goal of revenue management is selling the right product to the right customer at the right time for the right price. The challenge is deciding what is ‘right’!
The discipline of revenue management originated within the airline industry in the 1970′s as large carriers competed with young, budget airlines who slashed prices and gained market share as a result. American Airlines successfully competed against these budget airlines by implementing revenue management within their organisation.
Not long after this, Bill Marriott saw how these techniques could be applied to the hospitality industry and in the past 30 years revenue management has been proven to give strong return on investment and nowadays every major hotel chain has team’s focused on this subject.
The opening presentation was given by Mr. Chavi Malhotra the Regional Director of Revenue Management at Starwood Group Indo-China. He shared some valuable insights into the challenges of implementing revenue management within a large organisation such as Starwood. The key takeaway was that the optimal organisational structure of revenue management was with the Director of Sales and Director of Revenue Management both at the same level in the organisation structure (usually reporting in to the General Manager. Revenue Manager reporting to Sales was mentioned specifically to cause problems, mainly due to the difficulty a lower ranking revenue manager may experience when proposing price changes to his senior Sales Director)
The presentations continued with Windsor Plaza Hotel and property management, a Vietnamese hotel chain, demonstrating how they use revenue management internally with the delegates offering feedback anad helpful advice on best practice for them on how to evolve their techniques over the next 12 months.
Excellent presentations were made by Mr. Philip Niemann the Director of Revenue Strategy at The Sukothai, Bangkok and from Chatchai Pongprapat, the Cluster Director of Revenue Analysis at JW Marriot, Thailand. The common theme from the Bangkok hoteliers was that discounting rates has to be done intelligently – and as a general rule you lose more than you gain by lowering your rates.
In the afternoon, Luxury Machine’s Managing Director, Mr. Borey Chum showed us the big impact revenue management made on a Cambodian resort near Angkor Wat. They had seen big improvement in their resort’s profitability by investing in their website and driving direct bookings to their property. He was followed by the President of the Thailand Hotels Association, Mr. Surapong Techaruvichit, who gave a speech about the current state of the industry in Thailand. Mr. Surapong encouraged the audience to foster ‘out of the box’ thinking by bringing talent from other industries into the hospitality industry.
The day was concluded with a round table discussion chaired by Mr. Brinley Waddell, which discussed current hospitality industry issues such as the role of OTAs and Tripadvisor’s place in a hotel’s marketing mix as well as the impact of social media on the Thai hospitality industry in recent years.
Mr. Brinley Waddell, Managing Director from the eHotelier Alliance got day two underway as he explained why hotel websites are a key strategic resource in the modern day hotel’s marketing toolbox
Hotel Kungfu’s very own Managing Director, Dominic Scaife, then followed with a presentation on the part voucher deal companies play in a Koh Samui resort’s revenue management strategy. You can read more about his presentation ‘Revenue Management: A Voucher Deal Perspective’ here:
Dominic was followed by STR Global’s Alex Pivin, who showed us performance data and current trends about the main tourist destinations in Thailand and gave his opinion on the outlook for each destination. His verdict: Phuket and Pattaya will see the biggest growth in the next few years whilst Koh Samui show’s the least promise.
The morning session was concluded by Mr. John Poon from one of the leading revenue management solutions – EzRMS – John talked about ‘Myths & Realities about Revenue Management’ and illustrated how their product delivers value to their customers around the Asia Pacific region.
In the afternoon, Brinley Waddell organised breakout sessions where delegates discussed current hotel revenue management tactics, shared key learnings and our plans for future revenue management over the coming years.
Overall, an excellent couple of days learning, networking and sharing with others. We came away happy in the knowledge that our customers are way ahead of the curve in this important discipline.