Daily analyses, pick-ups by day, dynamic rates… But what, ultimately, is the job of the Forecast Manager? That film, the one about football where there is the monologue before the decisive match, saying that “Life is a game of centimetres, and so is football, because in both these games, life and football, the margin for error is tiny. Half a step taken a little early or a little late and you fail; half a second too fast or too slow and you lose your grip.”
Knowing, understanding and deciding
Every day, every room sold or unsold, ten Euro more or ten fewer separate the Forecast Manager from the result. The coach, Al Pacino, goes on: “But the centimetres we need are everywhere, they’re alla round us, they’re there in every match break-up, at every minute, at every second.”
Every Revolution update may bring to the Forecast Manager the sale he was looking for, the one he has been working for for months, up to the Starting Rate from almost a year before. Knowing, understanding, deciding.
Whether to take a group, at what price to stipulate an agreement, whether to drive hard on the individual: balance between the rating policy and the business one in the short, medium and long term; because it can hardly be just one room or just one choice that makes all the difference.
Just as they say in the changing room in that film, “We know that, when we will go to add up all those centimetres, the il total will then make the difference between victory and defeat.”
And the Forecast Manager too knows that the result only arrives at the end of the path, made up of many different elements that must be combined in the right way.
There is one of these that is becoming more and more important. We have often said and written that brand reputation is a fundamental element for the purposes of improving the economic performance.
Knowing, though, that there is one centimetre between the highest possible rate and the excessive one that brings negative prejudice.
An Eloquent Case
Today we will talk about an eloquent case, one that is very significant for understanding the tight relationship linking the trend of the brand reputation with that of the results of a facility (occupancy and turnover).
Today we shall talk about the centimetres earn at a San Vincenzo (LI), Tuscany. A 3-star, 12-room hotel. A facility in the area of an important highway (the Aurelia, linking Rome to Ventimiglia and the French border), but at the same time just a few steps away from the sea.
A perfect position for getting centimetres in Summer just as in Winter, in the middle of the week just as at the weekend.
A quality structure that is appreciated by the clients, as the on-line comments demonstrated. But at the start of the collaboration, between December 2016 and January 2017, the historic occupancy situation was thus:
January 2016: 12.9%
February 2016: 4.88%
March 2016: 15.32%
April 2016: 14.72%
May 2016: 16.39%
June 2016: 58.33%
July 2016: 91.12%
August 2016: 93.01%
September 2016: 39.72%
So, except for the Summer-by-definition months (July and August), the facility was showing decidedly low occupancy percentages, considering its potential.
As it is nearly always necessary to do, the Starting Rate was structured so as to maximise occupancy in the statistically weak periods through conditioning prices. We initially needed centimetres to make up the numbers and monetise the quality-price ratio: fill as much as possible, to generate both the increase in comments and the improvement in the average score.
In the first 5 months of the year, the exponential rise in occupancy was accompanied by a coherent growth in the number of judgements, to such an extent that in that short time the facility practically almost quintupled the il number of comments obtained in the entire previous year (161 vs 35), haining 0.5 points and passing from 8.1 to 8.6 in the overall score.
The whole process is summarised in this graph, which highlights the proceeding of the brand reputation in the first months of 2017 compared with the previous year.
As we have said, it was actually the partial in the Quality-Price Relationship that had the deepest effect on the improvement in the on-line reputation.
This decisive increase in comments was the natural consequence of the initial strategy, but also the cause of the equally exponential growth in occupancy and hence turnover, in a virtuous circle that fed itself. The centimetres earned in the initial part of 2017 compared with the results of the previous year:
Centimetres that appreciably modified the visibility of the facility and, at the launch of the peak season, we found ourselves in the ideal condition for starting to reap the best rewards of the year. With the Summer period we even started to gain centimetres on average incomes.
Whilst June required an intervention in quantity (with the average revenue unaltered but the occupancy having grown by 54%), July ad August showed their real dimension with an average revenue notably higher in comparison with the historic one.
The importance of having accumulated a great deal of comments in the low season obviously allowed the facility to soften the blow of the inevitable, physiological negative comments from July and August: it is known that, when the client pays more, he or she also demands far more.
It is, though, the average that always counts, and the success in stabilising ourselves on an optimal 8.4 for the end of Summer allowed us to work very well for September too, where the slope was climbed according to the natural, cyclical procedure of brand reputation.
Brand reputation, and, specifically, its four pillars of breakfast (in particular), wi-fi, staff and cleaning, is fundamental for going to get those centimetres we need, especially those in the peak season, the most important centimetres that can make it possible for us to earn money.
Everything should, though, be inserted into an overall strategy: good work in maximisation for greater visibility and reviews in the low season allows you to optimise the peak season. It is all a circle: the low one helps to sell the peak one that helps to sell the low one; the price that creates occupancy that creates reputation that creates visibility that creates an average revenue.
And it is always at the end that you add everything up; just as we at the end return to the changing room, with the team from the film just in time to hear the coach tell us that: “Our life is all there; this is what it consists of. Of those 10 centimetres before your face,” and to understand what the Revenue Manager does a bit better.
