Revenue Management @en

Case Study: The Resort Credit as New Tool of Total Revenue Management

1,311 comments

5 July 2013 at 10:00, by

Revenue management hotels

Sunshine Riviera Maya Alfredo, Flickr

The price wars underway these days at many tourist destinations are forcing hotels to create new tools to boost income, a strategy that is especially aggressive with respect to special offers and rates.  The resort credit is one of those alternatives. Mexico’s Barceló Maya Beach Resortrevealed to us its experience with this instrument and its influence on revenue management. (Source: Stefanía Ballotta.)

We know that revenue management is the process of following, anticipating and influencing demand with the end of maximizing our income and profits. However, there is another concept gaining ever more importance: total revenue management, which analyzes not only income per room but also income obtained through sales of a hotel’s additional services.

This approach is establishing itself as a very profitable area of business given the growing trend towards consumption of extras and services, although the stay in itself yields less profit (among those extras and other services are the Spa, excursions, outings, etc., which are more profitable to a hotel).

In Mexico and specifically at the Mayan Riviera during the past two years, hotels have widely developed this concept. By increasing sales of extras, we make the stay for our clients all the more pleasurable and agreeable, which boosts our competitiveness and allows us to generate greater income, without necessarily sacrificing room rates.

This strategy is already widespread in the American market (where the idea originated), and increasingly popular in Canada, but has yet to achieve its full development in the European markets.

This particular tool of revenue management goes by the name of resort credit. But what is a resort credit? How do we define it?

There are a variety of ways to present it and how it works varies with each company, but generally it can be defined as a credit offered by the hotel that can be applied to a series of extra services.  These are, ultimately, services and products that do not form part of room plans or the all-included package.

Let’s analyze the current resort credit system at the Barceló Maya Beach Resort, located on Mexico’s Mayan Riviera, which is up and running with success in a number of markets.

Concept description

Three credit packages are designed based on the client’s length of stay: from one to four nights, $1,200; from five to 11 nights, $2,000; and 12 or more nights, $3,000.

A wide variety of services/articles are also included, those that are most popular and sought after by clients, such as, for example, the spa, hotel extras, food and drink, activities and shopping.

Presentation and distribution

The packages are offered in the form of a book of discount coupons given to each client upon arrival, with each coupon corresponding to a service and indicating the credit amount. Each is used like cash to pay for services or articles acquired at locations that participate in the program.

From his arrival at the complex, the client therefore has at his disposal the equivalent of a significant amount of cash in American dollars, with which he can buy a major range of services, and for which he will only have to pay the difference between the cost and the value of the resort credit coupon.

 In this way, the resort credit is set up as a discount tool that makes the consumption of hotel extras more accessible, thereby generating a continuous source of income.

At the same time, another area of satisfaction is offered to the client, who sees it as something value-added rather than as an additional cost, which has a positive impact on his loyalty.

Idiso Digital

Idiso Digital

Marketing & Distribution Services

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