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Friday , September 22 2017

The changing value of the channel

The “walk- in”: possibly the lowest cost channel available to us, just not enough volume or consistent volume to totally rely on, (unless of course you’re yield managing a car park, in which case up to 80% of your guests could be “walk-ins”).

The “walk-in” however, is still a lucrative source of revenue.

The value of the “walk-in” channel to a property can vary depending on the market supply and demand on any given day, the time of day and available customer choice.  A walk-in at 10am, with approximately eight more hours of potential selling time could be valued very differently by the property if this same piece of business materialised at 6pm when the night is soon to pass.

This mindset can be applied to all our distribution channels, each channel can bring a different value proposition i.e. demographic reach, new segment opportunities, global market reach and hopefully additional volume at varied times or day of week across your annual inventory.

Revenue and yield managers are the key stakeholders of channel optimisation, consistency and performance. Their goal is to optimise the net value of all booking channels and align this closely with sales and marketing to maximise opportunities within customer behaviour patterns. How best to manage all the booking sources available to them is a process of constant change and cleverly crafted strategies in conjunction with sales and marketing to influence the right mix.

Best practice advice from our top revenue managers is to keep a balanced and flexible approach to distribution. This is to ensure they don’t keep all their eggs in one basket and can optimise each channel available with the anticipated needs of the property. Then, they can make all channels work effectively for the needs of the business.

About

Melissa Kalan is the Founding Director of Australian Revenue Management Association (ARMA).

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