Hospitality Revenue Analytics

3 Pace Report Metrics That Will Reveal Hidden Revenue

For many hotels, the time-honored Pace Report forms the heart and soul of their RM analysis. Pace Reports are usually designed to give the reader a quick snapshot of future rooms revenue versus the previous year. Since this type of report is typically widely distributed to many functions (i.e Sales, Marketing, Executives), the data tends to be aggregated to focus on total rooms performance by market. While this format may be useful for putting the current year’s performance in context, it contributes limited input for making the type of decisions that truly affect profit. To be effective for RM decision making, the Pace Report has to go into deeper levels of detail. Specifically, RM should be closely monitoring pace performance by room type, week part, and discounting.

Room Type Pace

A Pace Report by Room Type reveals patterns that give RM and Marketing insight into important market dynamics that may require further research. For example, your occupancy pace for a given month may be the same as last year but if the room mix is now more skewed towards lower category rooms it may be an indication that your customer’s wallets are shrinking, that your superior rooms are overpriced or that your brand is losing steam among the best potential customers. With this information, RM and Marketing can jump into action before it is too late.

Monitoring Room Type Pace also prevents you from making catastrophic pricing decisions. Say you only look at total rooms pace and for a given month you are pacing ahead of last year in total occupancy, the first reaction may be to increase rates to take advantage of the higher demand. Many RMs would increase the BAR rate and all the other room type rates would be increased by a static markup. Upon closer examination of your Room Type Pace you realize that the demand for the lower category room types are driving the higher occupancy. Therefore, your decision to increase the BAR rate may not have been optimal. What you have effectively done is that while you probably yielded the BAR rate correctly, you further eroded demand for the higher, more profitable, room types. Therefore, while seldom done, tracking Room Type performance and pace can have a major impact on RM success.

Week Parts Pace

Many hotels consider themselves either a weekday or weekend property, which typically means that one week part compensates for the other. Splitting the pace among week parts by month allows you to see whether one week part is dragging down the other excessively.  For example, if you expect your weekdays to be slow, they should at least keep pace so that they don’t wipe out gains made on the weekend.  This may translate into making rate adjustments that are not necessarily aligned with the brand strategy in order to keep your “weak” days from dragging down your entire P&L.  One property I worked with wanted to keep their weekday rates within $50 of their weekend rates, but when a weekpart pace revealed that half of their weekend gains where being erased by the weekday performance, they quickly dropped that pricing scheme.

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Recurring Events Pace

For some properties, a handful of recurring event dates can account for a significant portion of their annual revenue.  A pace report by recurring events can reveal shifts in patterns that may help you better manage your rate tactics.  For example, this year, New Year’s eve is on a Wednesday, as opposed to a weekend.  That Wednesday are the lowest occupancy dates for many resort properties may have a significant effect on pace. Isolating events allows you to closely monitor the days that have the biggest bang.  Furthermore, you can also see the the impact on non-event dates on your P&L, which are the vast majority of the days of the year.

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Robert Hernandez, Statistical Analysis and Data Mining for Revenue Growth Robert is an expert in the field of mathematical Hotel Optimization and Analytics. He has spent the last 17 years building data-driven forecasting and optimization models for companies in over 20 different industries, from tech to tourism. Robert possesses a very unique skill set including cross-disciplinary experience, advanced mathematical and analytics skills, data transformation, industry-specific knowledge and business-process improvement expertise. Robert began his career at the Walt Disney Company in Revenue Planning. Read More+


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