TOURISM MATTERS: Benefits in revenue control
OVER THE YEARS, airlines, most cruise ships and train operators – together with many hotel brands – have understood, and in the main applied, the concept of revenue control very effectively.
It’s almost a given that when you board a plane, even when you are in the same designated seating class, that passengers have paid different levels of fares, for in many cases an identical level of service. Hotels too, especially with 100 rooms or more, constantly battle with the dilemma of using more creative marketing ways to attract a higher percentage of direct rack-rate-paying guests or entrust tour operators to fill contracted allocations of rooms at heavily discounted prices.
Other options include online websites like Expedia, among the several others. But again these also attract a lower net rate. A very simple equation is to fill 100 rooms at US$100 would bring you $70 000 through direct bookings, while the same number would probably realise only $49 000 per week through a wholesaler or tour operator.
The question then to ask is: by spending a proportion of the differential, could you drive more higher direct revenue income? In many cases, I believe the answer would be yes. I will be the first to admit that I have failed dismally in trying to persuade some of our restaurants to see the potential benefits of revenue control. It was never our intention to bully a single establishment to participate in the re-DISCOVER dining programme. Even though they know a greater choice would make it an even more enticing offering to our visitors and locals and a very much more powerful marketing tool to differentiate us as a destination.
Knowing what the actual costs are, I can fully understand that some restaurants could not sustain a three-course dinner, half bottle of wine, value added tax and service charge at $99 for every paying customer. However, by encouraging early diners to allow multiple table sittings, limiting the numbers at that price to about ten per night, it provides an additional revenue stream of almost $6 000 per week, based on six days opening, which goes a long way in paying standing costs like insurance, electricity, land taxes, municipal solid waste tax, liquor licence and so on.
To further assist in reducing costs, we negotiated with wine distributors to offer a range of wines to re-DISCOVER partners at a substantial reduction. Other hospitality suppliers were invited to target specials to the more than 50 restaurants that are now part of the promotion. And pray tell me where could a single restaurant generate a potential additional turnover of $312 000 per year at absolutely no participation cost, as in the case of the dinner menu offering, subject to meeting a sign-up deadline?
Every major restaurant on Barbados has been given the opportunity to join this promotion entirely free of cost and we applaud those with the vision who can see the objective behind the initiative and have seized the day. Mention also has to be made of all those in the background who have volunteered their precious time to make the project work and to Barbados Tourism Marketing Inc for adopting re-DISCOVER as the national restaurant component of the recently launched Brilliant Barbados campaign.
Email: [email protected]