DALLAS — Measuring success in revenue management has long relied on things like year-over-year comparisons and gauging market share to show a long-term growth trajectory, but how can companies do that when the data they rely on is following patterns unseen in the modern history of the lodging industry?
Speaking with HNN during the 2021 HSMAI Revenue Optimization Conference in Dallas, a group of revenue-strategy experts said they've had to adapt how they look at data in order to identify positive or negative trends, but that doesn't mean the historically important key performance metrics no longer carry weight.
Cassie Bond, vice president of revenue strategy for Chesapeake Hospitality, said she keeps it simple.
"Did we do better than last week? Did we do better than last month?" she said. "Did we clean all the rooms? Did we sell all the rooms?"
Erica Lipscomb, senior vice president of commercial strategy for Crescent Hotels & Resorts, said occupancy, average daily rate and revenue per available room are still their foundational metrics, but there were points in the pandemic where it was hard to look at them and feel motivated.
"We still use our traditional [key performance indicators] overall, but at a point, they can be so depressing," she said. "So I've moved the company away from doing that at every property."
She said those KPIs are tracked more closely at hotels that have largely recovered from the pandemic-induced travel slowdown, while others have to find alternative metrics to define how they're competing within their markets.
"When I'm looking at my city-center hotels, I use RevPAR index growth," she said. "Are we growing? Are we moving forward. I always tell my regional teams, 'When you're looking for wins, what are you looking for?'"
Kerry Mack, executive vice president of revenue and distribution for Highgate Hotels, agreed that there are some markets that have returned to more traditional data analysis and others that require another layer of analysis.
"There are still functioning markets where you can do [STAR Reports], you can do index, you can do all that fun stuff," she said. "But then in a market like New York ... then it's more about, well is your conversion at least getting better on the website. I get that you're running 10% occupancy, but are you converting a decent amount? Are you getting your fair share of [online travel agency] business against the comp set on a given day?"
Jennifer Driscoll, VP of revenue management for McNeill Hotel Company, said it comes down to judging each property on its own basis.
"You've got to find the wins for each one, each individual hotels," she said. "Is it growth? Is it weekends? Is it rate?"
Driscoll agrees with the industrywide practice of benchmarking against 2019, which has been adopted because 2020 data is largely viewed as anomalous, but she said that can be a deflating comparison for some properties.
"Some hotels are already beating" 2019 performance, she said. "Some are very close, and some are way behind. But you don't want to keep beating up those that are running low. You have to find those small wins."
Revenue strategists have a bit of a tightrope to walk in terms of finding those wins and acknowledging the reality in front of them, though.
"Other departments help with that," Driscoll said. "Like how asset management will look at" gross operating profit per available room.
Heidi Cosio, vice president of revenue strategy for Aimbridge Hospitality, said one way to maintain that balance is to benchmark against yourself and where you're at and find metrics that will have a long-term benefit to improve upon. She said Aimbridge is taking a closer look at its business mix and how to better target more profitable business rather than just capturing more market share.
"Then we measure that against ourselves versus against our competitors, and that really helps kind of keep it positive," she said. "And nine times out of 10, we'll find that helps our standard KPIs to keep improving. So when we made that focus, it was about what we can do today to affect tomorrow as opposed to saying 'How are you looking as compared to last year?' That way we felt both the metrics of positivity and KPIs were being met."
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Editor's note: STAR Reports are compiled and published by STR, CoStar's hospitality analytics firm.