All posts in Analytics

The Three RM Terms That Revenue Managers Misuse the Most

Categories: Analytics, Pricing, Revenue Management
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by Robert Hernandez

I have had the good fortune to engage with hundreds of Hotel Revenue Managers from every corner of the hospitality industry. With no reservation I can honestly say that the vast majority are dedicated professionals who want nothing less than the best for their employers.  They care about their personal performance and the value they create.  Despite all that, it is hard to argue with the reality that the career trajectory of most hotel RMs has left a lot of holes Read more

From PAR to PAC: The Big Revenue Management Reset

Categories: Analytics, Guest Analytics, Hotel Analytics, Per Available Customer, Revenue Management, Total Revenue Management
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by Robert Hernandez

Today, a revolution is happening in hotel revenue management as hoteliers with the highest profit expectations are beginning to follow the customer instead of the product.  They are using advanced analytics to dump their dependence on the crude “Per Available Rooms” (PAR) averages and have begun the move to measure their world by predictive indicators based on “Per Available Customers” (PAC).  This is the Big RM Reset.  It is a seismic shift that is reframing the Hotel Revenue Manager’s world Read more

Add This Power Metric to Your Pace Report Today

Categories: Analytics, Hotel Analytics
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by Robert Hernandez

Sometimes the simplest math can deliver the most powerful analytics. In my experience this is, by far, the metric that captures the most attention on a Pace Report. When analyzing variances for revenue performance, there is one powerful metric that is easy to calculate and so easy to explain and everyone will be impressed when you use it. The Variance Analysis Components metric will let you show what portion of a variance in revenue is attributed to changes in occupancy Read more

Taking On the Epidemic of Overconfidence in Hotel Revenue Management

Categories: Analytics, Data, Pricing, Revenue Management
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by Robert Hernandez

From time to time one of our clients asks me to sit in on a vendor presentation for some Revenue Management or Business Intelligence software.  At the end of these demos the salesperson usually summarizes the value of the system by saying some derivative of “it allows you to make more confident decisions.” That is exactly the opposite of what the sales pitch should be.  You see, in the hotel business there is no confidence problem.  Managers across all departments Read more

In Revenue Management, Never Being Right is Better than Sometimes Being Right

Categories: Analytics, Data, Revenue Management, Strategic Planning
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by Robert Hernandez

One of the most difficult concepts to explain in Mathematical Rate Setting is that the optimal rate is the one that has the best chance of maximizing revenue over the long term, not necessarily in the short term.  In other words, it is the rate that has the best chance of delivering the optimal revenue if the same rate decision where repeated many times.  That does not mean that it is the best rate for any one time that you make Read more

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