Designed specifically to help your hotel business boost performance, grow as a brand, and deliver amazing experiences for your guests; SiteMinder’s series features some of the best minds in the industry.
Seven expert interviews with tangible insights and a wealth of knowledge. Get actionable knowledge your hotel can take away and put into practice quickly.
In this edition we spoke to Markus Seemann, founder of 9seemeilen Hospitality, about all things hotel revenue management.
Table of contents
Every hotel deserves professional revenue management
Having founded 9seemeilen Hospitality in 2019 after almost two decades of experience in large hotel chains such as Accor and Starwood, Markus Seemann has made it a mission to give hotels of all sizes access to professional revenue management services, one that he speaks passionately about.
“I believe that not only chain hotels should have access to revenue management but also all other hotels. Mostly, however, it fails because either the necessary expertise is not available or the time for it is missing. This is where we come in,” he explained. “We support the hotels in strategic revenue management. This means that we develop new strategies together with the hotel in order to lead the business into an economically successful future.”
It’s a full scale business that keeps Markus busy, however he still relishes the chance to get away from the desk, keeping an adventurous spirit and a passion for travel alive.
“I spend a lot of time hiking in the mountains. Being so close to the Austrian Alps, that’s a natural choice,” he said. “It clears my head for new things and sharpens my focus on the essentials. It’s a nice side effect of the sometimes hour-long and very challenging ascents.”
“Another hobby of mine is diving. From the heights to the depths, so to speak. The sea is so breathtakingly beautiful and I enjoy the silence underwater. I prefer to be in warm waters like off Mexico or in the Red Sea. Travelling is also a passion of mine, which fits quite well, as this allows me to discover new hotels again and again.”
When hoteliers need to seek help and what it takes to succeed
As every hotelier knows, revenue management can be a highly complex challenge. It becomes a full-time job at larger hotel brands wanting to maximise revenue and profit.
For hotels that may not have the resources, expertise, or budget to get it right, Markus and his team are there to help.
“Hoteliers should always resort to external help when there is a lack of the two factors – expertise and/or time,” he explained. “Hoteliers simply cannot do everything 100% themselves all of the time.”
Time is often the enemy of hotel management, and for revenue management to be effective it needs to be given full attention. So, if a property is struggling Markus will take a holistic approach to improving its performance.
“We first look at the existing costs in the business and, on this basis, develop a new rate model and distribution strategy that is more agile, flexible, and efficient,” he detailed. “The goal is to generate the best possible revenue, to further expand market share and to position the property optimally through price.”
“Taking a holistic approach also means looking at processes within the hotel, as well as the tech stack.”
2022 is the year of tech stack optimisation and mastering common challenges
Each year brings greater demands for hoteliers to respond to. Greater demands from guests, and higher demands to collect and analyse data with which to make smart and fast decisions. Maximising performance depends on the ability to easily access accurate data and be able to draw conclusions and act accordingly.
It’s no easy task if your tech stack isn’t working together and your data is fragmented. Markus said 2022 is crunch time for hoteliers looking to get things in order.
“In the past two or three years, there has been a tremendous amount of software development for hotels. We now have so many options and tools at our disposal, and we should take advantage of them.”
“Often, outdated technology creates major problems for hotels. For example, it means certain processes have to be repeated over and over again because there may not be an appropriate interface. This is frustrating. Not only for the employees but it can ultimately end up impacting the guest experience.”
With this in mind hoteliers should look at how they can centralise their operations under one roof to increase efficiency and growth potential. Platforms such as SiteMinder offer everything a modern hotelier needs to succeed in growing revenue and profit.
When it comes to revenue management in particular, a good idea for hoteliers is to learn how they can conquer the challenges they are constantly faced with. Markus explained a few of them.
“Basically, I see a few points over and over again. One of them is that most hoteliers have never questioned what they actually have to take in at least for their rooms so that all costs are paid and covered at the end of the year,” he said.
“Most of the time, prices are based on gut feeling. But gut feeling has never been a good advisor when it comes to money and numbers. A proper break-even point analysis with a corresponding calculation of price limits is existential for every hotel. Otherwise, there is no target to work towards.”
Only by focusing on key performance indicators can hoteliers control the fate of their business in real-time and set a plan for future success.
“This is where we come, of course,” said Markus. “These are exactly the points where we support the hotelier to give them back the rudder of their business.”
Best practice revenue management and success stories
So, how much of revenue management is data and how much of it can be handed over to intuition and creativity? Well, Markus says there is room for both but it is conditional.
“It depends a bit on what period of the year I am in and what I want to try. If it’s peak season and I need to generate the maximum revenue, then I’d rather not experiment. I prefer to rely on a consistent analysis of hard numbers, data and facts and stick to my plan,” he said.
“In the off-peak times, however, creativity can certainly be given more rein. Basically, I am a great friend of creativity in this area. Unconventional paths may also be taken to reach the goal. But of course you must not lose sight of the key figures. If they develop negatively, you should get back on track very quickly. Then the experiments should stop.”
This prevailing focus on the end result is why Markus has been so successful in helping the hotels that have come to him for assistance. The pandemic delivered one of his most memorable and satisfying client experiences.
“It was 2020 and we were in the middle of the first lockdown. No demand, no guests, no revenue. A very difficult time for all of us.”
“Before this in 2019 we were working with a client, adjusting his rates almost daily and keeping an eye on his metrics. COVID-19 put a spanner in the works but when it became clear hotels in the region would slowly reopen we needed a plan.
I assumed that the demand would increase by leaps and bounds – my customer disagreed and said he would like to take over the adjustment of the prices for the month of June himself, as he would need as much occupancy as necessary to make up for the missing turnover on the previous two months.
We basically had different views on this, as I think that starting a price war on your marketplace is not a good signal. In addition, more occupancy does not necessarily result in more revenue.
This is exactly what happened. At the end of June, my customer had an increase in occupancy of almost 10%, but the ADR and revenue was far below the previous year and the possibilities.
Afterwards we took over the rate control for him again and in the following months we were able to see sales increases of more than 20% and increases of the RevPar of almost 18.00 EUR in one month.
That was great! Happy customer – happy us!”
Thank you for the chat Markus! Find out more about Markus and his services here.