Speaker: It's caa.
caa.
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It's time for the show.
Let's go
Speaker 2: today.
We're Desiree Garcia, the co-founder of revmax, the Revenue Management System, and
we're talking about the three things that you should do daily, weekly, and monthly
when working with a revenue manager or working with a revenue management company.
Desire Ray, thanks for coming on today.
Speaker 3: Hey Steve.
Thank you for having me.
Speaker 2: So Desiree, we've had you on before you started in 2006 and Destin,
you have got a long history of being a revenue manager, growing revenue for
a multitude of companies to include the big dogs on the block in the hotel
industry and all the way up to meeting Carlos and becoming a co founder of
the RevMax revenue management system.
Speaker 3: Yes.
It's been quite the journey.
Speaker 2: You've come from one market segment into a different
one and then became a leader of the short terminal segment and
then co founded an entire revenue management software . That's a pretty
outstanding career you've got going on.
Speaker 3: Thank you.
It's a lot of fun as a revenue manager in the hotel space, if you will,
they kind of give everything to you.
And as revenue management evolves and strategies evolve, they're
not so keen to give you that flexibility and functionality.
So being the co founder, especially in the vacation rental space with
the revenue management system and the diversity that's needed, the complexity
with working with owners and different companies and roles, it's important
that we have a system that gives the flexibility and to know that we have that
control to bring that to the marketplace is what keeps this exciting and fun.
Speaker 2: Uh, you know, I remember years ago when we would do everything
on Excel spreadsheets before Streamline was a thing, when you would Yahoo,
not Google, because Google wasn't a thing yet, Yahoo property management
software, nothing would come up.
I would build these great big charts showing the homeowners what we'd
be charging for the entire year.
And we'd send them out and have them like on our front desk.
So that.
Guests could pick them up and decide what time of year they
wanted to come and see everything.
And then we'd even secretly drop them close to our competitors
offices with the wrong numbers on it.
And that's how we would get competitive advantages on it.
Back in the old days.
Speaker 3: Yes.
Yes.
I remember those pricing sheets.
Speaker 2: They were really valuable and they were such a thing.
And like, I remember like, we can put it on nice paper and it was like,
Oh, you can put it on nice paper.
Like, yeah.
And I have times have changed.
Speaker 3: Yes.
They were magnets.
Speaker 2: Yeah.
Well, today we're talking about the three things that you should be
doing daily, weekly, and monthly.
And I think this is so important because when you bring on a revenue manager or
you hire a revenue management company.
They know what they're doing, but you really don't often as a property manager.
I wondered sometimes asked like, okay, I'm glad you're on board.
What should I be doing or what questions should I be asking,
or what should I be monitoring?
I'm really excited about this episode because I think that we're
going to answer those questions for our partners at Costco today.
Speaker 3: I think ultimately when you have a revenue manager, they
should be responsible for your entire revenue management strategy
because revenue management isn't just about setting a price, right?
A pricing tool can do that.
And they're not just sitting back changing rates for 365 days for every home.
It's all about managing the strategy and making sure that we're optimizing
the supply and demand for every day.
Revenue management is an art and a science.
The science is through the system.
Let the system do a lot of that heavy lifting.
The art is through the revenue manager, as well as with a blend of
the property manager, because they are the ones who are boots on the ground.
Most revenue managers are remote, but ultimately the collaboration
of those two are what's going to make a successful strategy.
And making sure that all the key players that are involved know the goal,
understand the strategy so they can execute in their respective position.
Speaker 2: I love that you said that the people on the ground.
Along with the strategist as the revenue manager are working together.
And in a previous episode, we talked about how revenue management is a team sport
and making sure that the people who are actually on the ground, picking up the
phone calls, talking to guests, talking to homeowners, answering emails, are
giving feedback to the revenue manager.
Who's setting the strategy.
Speaker 3: Yes.
It's important that owner services, marketing reservations, revenue
manager, we're all aligned.
And the
Speaker 2: homeowner.
Speaker 3: I'm the homeowner.
Yes.
Speaker 2: Yeah.
So we're going to start with daily.
So the three things that we should be doing daily as a property manager, you
said number one was major bookings.
Speaker 3: Yes.
The important thing is right.
I'm going to kind of take a step back before we jump into that is
once a revenue management strategy.
is set.
This is what you should be doing then daily, weekly, monthly.
So if you're saying tomorrow, right, I'm going to just hire a revenue manager,
but there's no existing strategy.
We may need to do all of these things daily to try to get the strategy
built, get the system set up.
So you understand what's happening once your strategy is good.
And now you're in maintenance mode, if you will.
These are the things you want to do daily, weekly, monthly.
We're going to start with daily and you had said measure bookings.
Because we want to understand our reservations.
We want to understand what reservations are coming in because if we had
just made a price adjustment, or we just opened up our calendars, or
we just sent out a marketing piece.
Or we just added a different distribution channel or partner OTA.
How is that impacting the volume of reservations coming in?
So we need to have a pulse on every day, how many reservations are
coming in because ultimately that's cash also, how much cash is getting
deposited into my bank account.
So that's why as a GM, you want to have a pulse check of your bookings.
Speaker 2: And so for number two, you said major leads, why major leads if
they haven't turned into revenue yet?
Speaker 3: Correct.
In our previous podcast, we had talked about availability, which was opportunity.
So leads are opportunities where people have picked up the phone
or sent an inquiry and are ready to spend money, but haven't yet.
That's your demand.
That's how much demand is coming in.
You also want to know, okay, that's great that I had 20 bookings.
But how much demand did I have?
If I had 20 bookings and 50 leads, I need to convert those leads.
Why did they not book?
Was it policy?
Was it rate?
Was it availability?
Was it deposit?
Are they nervous about the cancellation?
Why did 20 of them give me money right away?
And why did the other 50, why were they apprehensive?
Speaker 2: So when you're measuring leads, you're also
inside of that measuring denials.
Speaker 3: Correct.
So denials are when somebody called in and it was a hard no,
I'm not moving forward with you.
Why did we deny that reservation?
Why did we deny their money?
That's how I look at it.
People have money, they walked into my store, they have an intent
to buy, and we turned them away.
Why is that?
So it could be the price was too high.
It could be their house had a certain night minimum.
They weren't flexible with their stay.
They wanted to bring their pet and they couldn't, it could be a number of reasons.
So why would we turn those customers away if we didn't
have existing demand to book it?
That's the conversations we need to have with clients or reservationists
to the revenue managers and the GMs.
Marketing is doing their part with getting the demand in, but now we're running
into hurdles because we can't convert it.
Speaker 2: So for number three on our daily schedule, we should review pickup.
And we're not talking about a Ford pickup here.
We're talking about something else, right?
Speaker 3: Yes.
So pickup simply just means We know that we had bookings, but pickup
is where does that occupancy fall?
What day in the calendar, what did we pick up?
So if I had 10 bookings, fantastic, but where are they picking up?
Is it last minute?
Is it next week?
Is it next year?
Is it 4th of July?
When are those reservations picking up?
That helps to understand this last Thursday, we picked up five reservations
and they're all booking for 4th of July.
Good to know.
Versus five reservations and they all just booked for next year.
It's important to have a pulse check of how many reservations are coming
in and what days are they falling on.
Speaker 2: That's really good advice.
You know, I look at the daily pickup, but I'm not really
looking at when it's coming in.
I was trying to pace pickup comparatively to the year before, but I think I'm
leaving a lot on the table by not looking at the dates for the pickup as well.
So we've done our daily three for the past week, and now it's coming up to our
weekly meeting or our weekly schedule, and we have three things that we should be
doing weekly, and one is review pricing.
Speaker 3: At least once a week, you want to have a collective meeting with
all your players at bare minimum, the GM or the owner and the revenue manager.
It would be great if you had a director of marketing or marketing manager, a
reservationist owner services, because it's important to understand the,
why we're doing what we're doing.
And if we need to make adjustments, if we're noticing certain
trends, All players are there.
They understand the goal.
So any questions anybody gets asked, they all have the appropriate
answers in the weekly meeting.
When we're reviewing price, if we recognize, hey, for the last seven
days, our pickup trend has been X.
We need to offer a discount, right?
We're sitting with 100 nights open.
We're going to offer a discount owner services and reservationists need to
be aware of why we're dropping price.
So if they get calls, they can speak confidently to the owners
about why instead of passing it off.
They can easily convert that.
So we were reviewing prices.
Number one on our weekly call, because we need to understand based upon our
pickup, where is demand coming in?
And where is the opportunity if demand is coming in hot and we are
pacing to sell out too fast, then I probably need to increase my price
a little bit to slow that down.
If demand is not coming in over certain periods of the year,
certain weeks, or even certain days, could I adjust my price down?
Whether that's through just a hard decrease.
Is it through a marketing campaign or a coupon?
Is it on every house or on a specific home?
So we're reviewing price in all of those capacities on the weekly call.
Usually the revenue manager will already have those answers brought
out for you to where everybody else just needs to approve.
They do all of that prep work in advance.
Speaker 2: So they're coming to the meeting with these reports
ready to go and sit down and you're reviewing pricing segment.
And trying to figure out how that applies to the strategy and whether
you're overpacing or underpacing and where you go from there.
Correct.
Yes.
So number two for the weekly revenue management meeting
is review nightly minimums.
Speaker 3: So we're reviewing nightly minimums because we want to make sure
we have the correct strategy in place.
We're not displacing weeds because if we're getting a lot of.
inquiries, but no conversion.
We're reviewing with our pickup when we are noticing that if we
recognize, Hey, we're picking up too fast for a specific weekend, right?
How do we increase our nightly minimum to capture shoulder nights
or to slow down a, just a one night sellout and on the flip side of that.
So it's looking at areas of opportunity.
If I need to adjust by reducing nightly, men's Or areas of opportunity
where I'm pacing really fast and I need to increase my nightly mins.
Speaker 2: You know, a lot of people think about adjusting your strategy,
whether or not you're overpacing or underpacing purely on price.
And what you're saying here is it's not just price.
You can also demand more nights or longer stays to drive higher occupancy
those times and help with either over or underpacing just by your length of stay
and your nightly minimums in itself.
Is that correct?
That
Speaker 3: is 100 percent correct.
Yes.
Speaker 2: I can't tell you how often everybody I talk to in property management
starts talking about pacing and the first thing we all go to is pricing, right?
This, we all go to, I mean, us as property managers, we're
all going to that immediately.
First thing, like drop price, raise price.
We don't think often about like, hey, Demand more nights or demand less nights,
you know, as the default go to for it.
So I think that's a great way to think about pacing your inventory.
So number three for weekly is review availability.
Speaker 3: Correct.
There is nightly minimum management.
If I'm saying two, three, seven nights.
There's the pricing strategy, but then there is the availability piece.
So maybe I reduce my nightly minimums or increase my nightly
minimums, but availability controls, which also means my turn days.
Am I forcing a Saturday arrival?
Am I forcing a Saturday departure?
Reviewing that strategy as well as my nightly minimum could be correct.
But if my availability is not correct, we have gap nights
or air quote orphan nights.
How are we opening those up and how are we capitalizing on those opportunities?
In some cases, if I have a three night minimum because I can't
sell two nights, fantastic.
However, I need to review those two night gaps because what I can do if I
can't sell it to a brand new customer.
I could always call the customers on both sides of that gap and offer them to extend
their stay either one night later or one night earlier, offer them an earlier
late checkout for a very aggressive price because it doesn't matter because
nobody can come in on those days anyways.
So that's a way to capture incremental revenue for those same customers.
Speaker 2: Once those nights are gone, there is no shelf life on them.
They're gone forever.
So if you've got that orphan night, even an aggressive rate, any aggressive
rate brings value to a night that was going to be wasted and you would
have rotted on the shelf, if it were a supermarket product, it's a way to
get value out of it before it dies.
Speaker 3: Absolutely.
Speaker 2: So we're doing our dailies.
We're doing our weekly meetings and now the month passes by and we're
going to do three things monthly.
And number one is review our marketing efforts.
Speaker 3: Part of the revenue management strategy.
We got to have demand before my pricing adjustments will have any impact.
I have to have the demand and I can distribute my product on distribution
channels, which is your OTAs, but I also need to be able to communicate
to either my existing customers or a way to capture new customers.
Because I can't depend on the marketplace and the destination to bring in demand.
I have to do my part as well.
I have to be able to get in front of the marketplace.
Through marketing efforts, whatever that looks like, is it social media?
Is it Tik TOK videos?
Is it snippets on Instagram?
Whatever it is.
What are the marketing efforts?
What is the company doing to generate demand?
Because just listing it on Verbo and Airbnb doesn't fill the calendars anymore.
Speaker 2: So should we be looking at things like the email marketing?
Does it move the needle?
So to say, and if so, How do we measure that
Speaker 3: in addition to capturing new demand?
That was part one.
Part two now is to make sure that we're communicating to the database bi weekly.
That's our existing customers.
That's any leads, anybody that stayed with us for the past, you know, three years.
However, we're capturing our guests.
We need to communicate to them.
And we do that with email marketing every other week.
So we're not spamming them.
We're not sending them daily emails.
You can send them daily social media posts, but emails need to
be a bare maximum twice a month.
One email communicating the destination.
Why come to the destination, right?
What are the things to do?
Is there festivals in the area or there are concerts in the area?
Why come to my area?
The next e blast.
Would then be a call to action.
Maybe it's a Memorial Day sale, a Mother's Day sale, a summer sale, and you want
to be proactive with those because you know the booking window, right?
So you want to make sure you're ahead of them to give them ample time to
buy, to coordinate with whomever they need to, and One e blast is
called to action in two weeks.
They'll find another one about why they need to come to the destination.
And two weeks after that, it's another, you know, different call to action.
You don't want to spam them that way.
You're not always seeing that you're on sale and there is
a reason to buy with you.
It's not just information based.
Speaker 2: So one is information and two is offer.
Speaker 3: Yes.
And
Speaker 2: you, and you rotate back and forth.
Yes.
Speaker: Yes.
Speaker 2: And twice a month or never more than twice a month.
Speaker 3: You got to think about it if you were the consumer.
If you're getting constantly a weekly email about a deal,
it's usually not good cadence.
You're like, I'm just going to get spammed or there's no sense of urgency to buy.
Because I'm going to get another one the next week.
And then, I may not even be thinking about fall right now.
I don't want to see that every week.
Therefore, the more you email them, the higher the chance of getting spammed.
So, best practice is twice a month, every other week.
Speaker 2: And so for number three on the monthly cadence, you said, review the
OTA performance, the clicks and reviews.
Speaker 3: Part of the demand is we're catering to existing customers
who have stayed with us in the past.
We are trying to get new customers in the marketplace via pay per click or whatever.
Now we need to focus on our third lever, which is the shelves of
where our inventory resides.
The shelves, meaning distribution channels, right?
I'm on the shelf for people to buy.
I need to make sure that I'm optimized on those shelves.
Am I getting the exposure that I need?
Is my content good?
Do I need to make any adjustments to my pictures?
How many clicks am I getting right?
Usually the partners will give you some kind of report or benchmark in the portal.
of how many clicks the home is doing and whether they're up or down.
And then always make sure you're reviewing your reviews as well as your customers.
I think you have the ability in almost every platform to rate
your customer and review them.
Do that.
Because the more engaged you are with each partner, the stronger your relationship
is, and the more involved you are in that platform, it helps in your algorithm.
Speaker 2: So, when you rate your guests, do you think it actually boosts
your rankings inside of the OTAs?
Yes.
. Speaker 3: It helps in the algorithm because it shows that you are an engaged
user and your listing isn't stagnant.
So the more engaged you are with your listing, the chances
of you having a higher position in the sort order is greater.
And as a host, like me, that if I'm Verbo, I want to give customers to an active
homeowner because nine times out of 10, you're going to service them better.
If you're that involved with the listing, how much more are you going
to be involved with that guest?
First is me going to a listing that hasn't been touched in six months.
Now this guest is kind of going, I hope they talk to you.
They haven't paid attention to their listing at all.
They're not engaged with their reviews.
Good luck.
The guest isn't going to care about that owner.
That guest is going to care about Verbo.
So it does help.
I'm not saying it's going to make you number one, but it does help
with having a quality listing.
Speaker 2: Every little bit helps and we've been talking recently about what
would a 10 X listing look like and it's a combination of all these small things
that turns your listing into the 10 X listing right 10 times better than your
competitors, which serves you serves your homeowner serves your guest better
reviewing your guest is one of those.
Action items that you're going to have to take seriously.
If you really want to have a 10 X listing.
Speaker 3: Yes, that is correct.
Speaker 2: Desiree, thank you again for coming on.
It's always so much to learn.
And I have personally been curious about what kind of rhythm should
I be having on revenue management?
What should I be reviewing on a daily, on a weekly, on a monthly,
and this really lays it out.
Appreciate all of your time.
And as always, all the things you do for Costco, really one
of the leaders in our industry.
Thanks for spending the time with me.
Speaker 3: Absolutely.
Thank you Steve, and looking forward to the next podcast.
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