Profit by Customer Segment & Net Channel Revenue

Do you study your profit by customer segment? How much will they spend in the hotel and what profit outside of rooms do they generate?

If you could measure profit by guest/segment then based on demand you might make top yielding guests more loyal and incentivise lower yielding guests/segments to come back in periods you need them.

Net Channel Revenue (a channel refers to the channel the booking went through. Samples of channel segments would include OTAs, wholesalers, central reservations, hotel direct, brand or hotel website, third-party wholesalers, global distribution system, etc.) is important to know & manage. It can help you make better decisions as to which campaigns you may or may not participate in. For example a last minute OTA mobile platform versus a campaign on your own website.

However demand must be factored in. There is no point doing a direct deal on your website versus participating in a OTA special if majority of the demand books through the channel and wont know about your direct campaign anyway?

The customer is not aware of the margins properties have established with OTA’s and booking channels (and they don’t care). Their booking behaviour will be the same regardless as technology at their finger tips advances rapidly. We need to be aware of Net Channel Revenue (before fixed costs) but always factor in demand and marketing impact before campaigns are chosen or turned away and of course Revenue Manage all demand regardless of channel¬†appropriately.

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