Are you competitive? If you are, then you are probably #1 in market share in your comp set yes? And if you are #1 in market share, then what's next? What are you doing to stay #1? Well, in my opinion, if you are #1, then your goal should be to have the best year over year market share (RGI) growth in your comp set. Maybe you think being #1 in your comp set's RGI is impossible, maybe you think that spot is reserved for the property that is already there. In that case, maybe you need to find a different job in a less competitive environment! :)
I call this story “A Tale of Two Cities,” not to be confused with Dickens. I once had the opportunity to have a chat with a senior person who was “in charge” of two different properties in two different cities. We started to discuss strategies and based on where our conversation was going, I decided we need to talk about RGI results. STR Global® results. If you've read my blogs, you will know that I live and die by STR Global® data, but, back to my story. Since I'm a James Bond fan we will call our sales leader Q. I said to Q, “here in this city, your hotel is last in RGI, why is that?” Q, is a very serious person, and to a certain point understands his market well. Q's reply to my query was, “well, we are last because we are the oldest hotel and everyone wants to stay at the newer properties”. Ok, not acceptable reason, but, I could see where he is heading and this helps me with his thought process. Though Q still did not answer the question, I don't challenge his assertion, but asked a simple question regarding the second property in the second city. “Q” I say “In city number two, your property is the newest in the city, please tell me why you are last in RGI.” Without blinking an eye, without hesitation and fully confident I would understand his answer, Q replies, “Our property in the second city is brand new, no one knows about us and everyone wants to stay at the old properties that have been around for a long time.”
Can you imagine my surprise, this was awesome, what an incredibly unique way to look at your business. To me, (and I hope to you), this made absolutely no sense, but to this leader, his explanation fully surmised how he saw his properties in two different cities. So let's get this straight,
1.In City #1 you are last in RGI because you are the oldest property in the city!
2.In City #2 you are last in RGI because you are the newest property in the city!
So, my point in relating the story above it to show you that some people will never be leaders in their markets. They may have other traits that may be of use, but as a leader whose number one job is to steal market share, this person was not a good fit for either property.
Why was this even acceptable? Could you imagine giving this excuse? Ok, so now let's talk more about market share, or specifically RGI and RGI growth. Hoteliers live and die by RGI and year over year growth, it is vital to your success. I've said this before I will say it again. The first thing you need to do before implementing a strategy is to understand your hotels natural position within the comp set. Understanding the natural position is not the same as accepting the natural position as the best you can do. I once had someone “school” me on that, to which I happily corrected the teacher, that “I never said a natural position was an acceptable position”. Understand your natural position and then create bold strategies that will allow you to exceed your natural position and create a new natural position that is higher than you last. The only reason a #1 position exists is for others to aspire to do better. Do you think your natural RevPAR position is ok?
Chris Snyder is the Director, Professional Services for Revenue Science Corporation's Bangkok Thailand office. Chris leverages more than 27 years of experience in the development and implementation of sales and revenue growth strategies for hotels & resorts. Chris's strategies have grown market share in hotels & resorts around the globe.
PRIMES Revenue Management System is the great equalizer. It is a next generation RMS that has many industry firsts from our Wholesale functionality to our patented forecasting algorithms, & fully programmable, language and support. Revenue Science Corporation based in Hong Kong & in partnership with Hong Kong Polytechnic University School of Hospitality & Tourism Management also has an office in Bangkok Thailand. Our professional services boast more than 60 years of experience in hospitality leadership. Contact us at email@example.com for a presentation.
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