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Revenue managers adjust to 2017 calendar shifts

Column: industry Tag: Revenue managers Published: 2017-04-11 11:01 Source: Author:

Calendar and event shifts happen every year, throwing off comp sets and requiring revenue-management departments to work extra hard to keep revenue as stabilized as possible.

Nine times out of 10, when there’s a wild swing in monthly or weekly data, it’s because of a calendar or event shift, said Jan Freitag, SVP of lodging insights at STR, HNN’s parent company. That means something happened during a specific week or month a year ago that didn’t this year or vice versa, he said.

Freitag cited the shifting Easter holiday, which fell in March in 2016 but moved to April this year, and Jewish holidays moving from October to September. These shifts mean there will be “noisy data” for the first quarter into the second quarter, and the third into the fourth, he said.

“So all the quarterly data is going to be slightly off, and I think it’s very important to remember when looking at monthly data for those four months, to just take a deep breath and remember that there’s major holiday shift that shifts the group business predominantly and that then has impact on the national numbers,” he said. “So it (says) nothing about underlying strength or weakness of the industry. It’s purely because something happened in the prior year.”

Looking ahead
During budgeting and strategic planning for 2017, Marcus Hotels & Resorts was cognizant of the Easter holiday shift, said Linda Gulrajani, the company’s VP of revenue strategy and distribution.

Even so, she said, the holiday calendar shift and accompanying spring breaks created some challenges.

“I think we just need to continue to do a better job monitoring spring breaks and see where they are happening in the markets that affect our hotels,” she said.

First Hospitality Group looks at its event and holiday calendar a year in advance, which should eliminate surprises, said Jenna Smith, the company’s VP of revenue management.

“We need a proactive strategy a year out,” she said. “We should not be waiting until we get into the booking window of these holidays and events. The strategy should be placed ahead as far as possible.”

Taking this approach allows hotels to capture early transient bookings and group bookings at the right rate, Smith said. Otherwise, it’s possible to lose groups by quoting too high a price.

“You have to look at previous years’ history and see what occurred during those days or months and, combined with other events in the area, what groups are in the books and what the forecast says,” she said. “We have to make sure to adjust pricing restrictions and that discount strategies are based around those forecasts.”

Shift effects
The Easter holiday shift seems to have had a larger impact than anticipated, Smith said. Last year, when Easter was in March, schools’ spring breaks generally fell the week before and after the holiday, she said. But this year, they’re not overlapping the holiday and are further spread out.

“I would say we prefer it to be in March versus April,” she said, explaining a later Easter delays the start of high-occupancy season in April or May.

FHG has a number of city center properties, Smith said, so looking at the remaining holiday shifts, Halloween moving to a Tuesday is expected to have more of an effect on special corporate business than if the holiday were on a Monday. Similarly, the company hopes guests might turn New Year’s Eve into a long weekend as 31 January is on a Sunday this year.

Most of FHG’s markets that host large events are university markets with consistent sporting events and graduations, she said. Many of the major conventions in Chicago are repeating this year, she said.

“Louisville is challenged with the convention center being down this year,” Smith said.

One trend Marcus has observed is that group business has remained fairly strong for both March and April, Gulrajani said. The weeks before and after Easter are slow, she said, but there isn’t a large impact on group bookings for the remaining weeks.

“It doesn’t seem to be hugely impacted year over year compared to transient,” she said. “That has really spread based on spring breaks and people taking time off.”

Marcus’ hotels in Milwaukee benefited from the city hosting the first round of the NCAA championship, Gulrajani said, which helped during a typically slow period. The company only has one hotel in the Houston market, so the Super Bowl did not have a large impact on the company. One hotel in California had improved performance as a result of the Porter Ranch gas leak in Los Angeles, which forced 5,000 residents to evacuate their homes until a utility company could close the leaking well.

The Fourth of July falls on a Tuesday this year, but it’s close enough to the weekend that people might stretch out the holiday, Gulrajani said.

“Labor Day, not so much,” she said.

Gulrajani agreed that Halloween falling on a Tuesday will have a bigger impact on group business during that week. But overall, she said, the different shifts should offset each other throughout the year and turn out to be fairly neutral.

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