All posts in Data

14
Apr

5 Reasons to Stop Reverse Engineering Your Hotel Budget

Categories: Budget, Data
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by Robert Hernandez

Even without any research to back me up, I think it is safe to say that most companies reverse engineer their budgets. That is, they decide on a final profit number or percentage and then go about building all the P&Ls to support that final number. From Wall Street to Main Street (sorry for the cliche), business managers tend to build budgets that reflect the expectations of owners and shareholders. Owners like this approach because it allows them to set Read more

14
Mar

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

14
Feb

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

Categories: Analytics, Data, Revenue Management, Strategic Planning
Comments Off on In Revenue Management, Never Being Right is Better than Sometimes Being Right
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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