Do You Need Revenue Management When Demand Comes Back?

Michelle Marquis, Chief Revenue Officer of Lexicon Travel Technologies
Melanie Brown, Director of Data and Analytics of Key Data Dashboard
Brandon Sauls, President & Owner of InterCoastal Net Designs
Trevor Stuart-Hill, CEO of Revenue Matters
Colin Morrison, Senior Account Executive of Beyond Pricing
Desiree Sandoval-Garcia, Corporate Director of Revenue Management for Streamline

President and Owner of ICND, Brandon Sauls, briefly discussed the impact on COVID-19 on the vacation rental industry using available web data. With Google trend search terms, Sauls found that the term “vacation rentals” had an increased search after April 5th. This revealed that many people are already thinking about booking their next vacation even though we are still in the midst of a pandemic. That search term traffic also mimicked the increased traffic on ICND’s server – 55% above normal server usage. “It’s looked like July 4th the last few weeks here,” stated Sauls.

Key Data’s Director of Data and Analytics, Melanie Brown, provided a multitude of graphs with booking data to show the increase in bookings for many markets. “As soon as places open up people are ready to book,” stated Brown as she began discussing the increase in global bookings within 30 days. Although Hawaii and Colorado are not experiencing a large increase in bookings, Florida had a recent influx in bookings once their Governor allowed vacation rentals to reopen. More secluded areas, such as the Georgia Mountains, are booking better than crowded cities. Bookings have also booked higher than the end of February for the Southeastern U.S.

CEO of Revenue Matters, Trevor Stuart-Hill, began the discussion of why revenue management is important, stating that a company has fixed costs, variable costs, and a revenue line that creates a profit. A revenue manager can help find the revenue line. While discussing past shocks to the tourism industry, Hill stated that in the recovery stage, “…usually, ADR takes twice as long as occupancy.” Hill used Arrivalist data to measure who has driven more than 50 miles away from home within the United States. The low point for travel was in early April and travel has increased significantly since then. For projections, Hill believes that leisure markets will have an idea of what the summer months look like by what their occupancy is on July 4th. Corporate travel seems to begin in the summer, along with mixed results for small groups in 2020.

Senior Account Executive of Beyond Pricing, Colin Morrison and Corporate Director of Revenue Management for Streamline, Desiree Sadoval-Garcia, continued the discussion of why revenue management is important by addressing the pricing aspect of revenue management. As the demand changes, pricing should change alongside it. Seasonality guides us through the year, along with day of the week, and local events. “At this time, we shouldn’t discount to get clients in – a lot of occupancy coming in is replacing what was cancelled,” stated Sadoval-Garcia. Instead, companies should make sure they are staying in from of customers to capitalize on their markets reopening. In order to do so, one should have strategies in place before this happens to maximize income by being adaptive to the situation. 

For more information on “Do You Need Revenue Management When Demand Comes Back? - including detailed graphs, web data, and revenue management expertise – watch the recorded version of this webinar to learn more.