“Are you familiar with STAR monthly trend reports?” asked Mark, the outgoing RM at the newly refurbished Bradford Hampton Inn.
Mark was talking to Ja Lin, the newly hired RM for the property. Mark was retiring, and the hotel’s GM had asked him to “show her the ropes” on his last day of work and her fi rst day.
“I think I understand them pretty well,” replied Ja Lin.
“That’s great” said Mark, “performance is really important here. But you’ll really like the freedom you’ll have in this position. Our GM and DOSM are so busy with sales and their own to-do lists that rate and inventory management decisions will be pretty much left up to you. Since the renovation, we have always led the comp set. Our RevPAR index for the month is 119.5 percent. That makes us fi rst again. I’m really proud of that!”
Ja Lin reviewed the trend report document Mark had handed her to her. The competitive set’s overall occupancy rate for the month was 61.5 percent. Her property’s occupancy index for the month was 140.9 percent. Its ADR index was 84.8 percent.
“Of course, the owners always want more. Just between you and me, I’m not sure they will ever be satisfi ed. They are always pushing for us to do better,” continued Mark as he shook his head.
“Do better?” asked Ja Lin.
“Yes, better. You know. Make them more money. Honestly, I just don’t think they are very realistic,” said Mark.
What do you think has been the rationale behind Mark’s revenue management strategy?
Do you think the current strategy is in the long-term best interests of the hotel’s owners? Explain.
What actions would you advise Ja Lin to take to learn more about her hotel’s relative placement within her competitive set and the customer value her hotel delivers?