Today I’d like to share with you a subject that’s particularly close to my heart, and I mean how the inductive method could transform your hotel’s results.

Over the years I’ve got to work with thousands of hotel facilities, and if I’ve learnt one thing, it’s that there is no such thing as universal strategy.

Each hotel is unique, and the key for achieving outstanding results lies in the very personalisation of strategies and an approach that has nothing to do with what you thus far considered valid.

If you are tired of chasing competitors, basing your decisions on what “others do” and applying preset models – minimum stay, not refundable, etc. – the inductive method is the only path you can take for success.

It must in the meantime be said that the overwhelming majority of hoteliers has until now always believed that the inductive method is the most natural path to undertake.

But our revenue management strategies have demonstrated the exact opposite.

From the deductive to the inductive method, a silent revolution in revenue thinking

The majority of (other) revenue techniques are based on a deductive approach.

This method starts from observing the market: analysing trends, comparing the competitors’ prices and seeking solutions based on what is going on abroad.

It may seem logical, but this modality presents quite a few limitations which often turn in to far from efficient choices.

Why?

First and foremost, because each hotel has its own history, its own clientèle and its own peculiarities. Replicating others’ strategies without bearing thjs in mind is a mistake leading to mediocre (sometimes disastrous) results.

When you observe the competitors’ rates, do you really know why they apply these? Do you know their costs, their objectives and their internal dynamics? Basing your choices on this partial information could be risky.

The market is always changing, but the deductive method is often based on rigid models that fail to respond to changes swiftly.

Following this approach often means losing sight of what makes your hotel unique, so that you chase inappropriate goals.

The Inductive Method: Starting from within so as to create tailor-made strategies

I have developed the inductive method over more than 25 years’ experience, and it completely upturns this approach.

It invites you to focus on your facility’s internal data, rather than to look outside.

This does not mean ignoring the market (far from it: this is your “employer”), but putting at the centre what you know best: your hotel.

When we perform focused revenue management consulting, we are based on the inductive method, starting from three fundamental things:

Analysis of the historic data: each hotel tells its own story through its data. Studying what happened in the past allows us to identify strengths and margins for improvement, building a strategy based on your specificities.

Dynamic, Personalised Rating: It is precisely by analysing data that we study a highly attentive starting rate, remembering that there is no such thing as rates that apply for everyone. Each day, season or event requires its dedicated strategy, keeping in mind the internal dynamics and requirements of the market.

Continuous monitoring: Revenue management is not a static process. Through daily analysis of the booking and request data, we can adapt our strategies in real time, maximising the results.

This approach requires greater effort with respect to standardised models, but the results do not even come close.

Each hotel is unique

Hotel management is often compared to the education of offspring. Imagine you have two children: you bring them up in the same environment, with the same principles and the same rules. Yet the result is surprisingly different.

Each individual responds uniquely, as each one has its own features and needs.

But how is it possible for the same educational rules to apply to two different universes as for two human beings?

The same goes for hotels. Each facility may be situated in the same neighbourhood or have similar service, but it has its own dynamics that effect its performance.

The real uniqueness, however, lies elsewhere: namely, in the response it can get towards rating stress.

This is why the starting rate is so important. Everything starts from the optimal fixing of this data so as to reach a point where the truly performing rate can be made dynamic.

The inductive method helps you to enhance these aspects, building strategies that not only improve revenue, but also reflect your identity.

Advantages of the inductive method

Adopting the inductive method allows you to personalise your strategies, as each decision is based on your hotel’s internal data and specific needs.

It helps you maximise revenue, and so selling each room at the best possible price becomes and achievable target.

Continued monitoring also allows you to respond to market changes in real time.

Passing over to the inductive method requires a change of perspective. Once this fundamental step has been taken, you may go on to the following ones.

To start, data is collected; it is necessary to analyse the historic data for bookings, prices and performance. To identify the most profitable and most critical periods.

A dynamic strategy is to be created, the rates must be flexible and adaptable, updated on the basis of the demand. And never mind the competitors: focus on the numbers concerning your hotel. Each rate modification must have a concrete base.

Trust expert consultation

If change strikes ou as complex, a revenue management consultation can help you put the inductive method into practice and take full advantage of the results. This is what the over three thousand hotels we’ve followed over these years have done.

With the inductive method, the results speak for themselves. Over the years, I have seen this method transform the performances of thousands of hotel facilities all over the world, with concrete results.

There has been a rise in the occupation rates, with empty rooms becoming a thing of the past.

And let’s not forget the final goal, which is the maximisation of profits, as, thanks to personalised strategies, each room is sold at the best price possible.

The inductive method is not a magic wand, but a powerful tool that can, if used correctly, make all the difference.

After all. revenue management is a balance between data and intuition.

The inductive method offers you a path to enhance what makes your hotel unique, transforming each choice into an opportunity to improve.

What happens outside doesn’t matter; the key to success lies within your facility.

If you want to change your perspective (and results), our revenue management consultants can help you take the first step.

My advance is to start at once; each day lost is an opportunity wasted.