Destination Yield Management
Written by Dave Bahlman
The right people won’t always find us at the right time, but we can easily help them. Right timing, right customer at the right price to maximize revenue. This is simple yield management. Destination Management Organizations don't control hotel or attraction prices, but we can massively influence them. DMOs can and SHOULD market to our ideal customer from outside of our tax boundary and control the community narrative to generate demand at the right time.
I love Destination Yield Management℠ and I strongly believe it’s our future.
It focuses our attention on the overnight visitor who is generally considered more valuable than a day tripper because they are spending exponentially more. We need to stop looking at an overnight visitor day by day in a reporting tool, we should evaluate the average stay value of the reservation from an aggregate. Average stay value provides information on quality visits and visibility into booking patterns, advance purchase, origin markets and their booking channels. Get it?... Now we are looking at overnight accommodations like a marketer.
The key to our industry’s success is being essential to our community. Understanding when to apply specific marketing strategies to influence demand, create local events, manage compression and shape resident sentiment allows destinations to control their community’s well being. This makes us vital to our fellow residents.
This data is available to DMOs, and if we can use it to accurately predict future demand, we need to know where we have been in the past first. This development of historical baselines, compared with future pacing of accommodation bookings, provides us patterns of seasonal trends, potential events, and market conditions. Now, we can help all local hotel managers optimize their pricing and inventory management. In return, they help us generate more room revenue tax.
Another benefit of Destination Yield Management is that it proactively alerts our community when they can expect to have more or less overnight visitors. Allowing our small business, retail, restaurants, and attractions to manage their costs and provide a better visitor experience. Proactively alerting potential slow periods creates advocacy, and that’s much better than defending past down periods.
Lastly, we’ve all wanted to know performance compared to our competitive landscape. Are we up? Is everyone up? Are we losing market share? Now, we finally have a benchmarking tool to compare our industry efforts. Competition = Progress.
So what now?
We’re now local heroes. Because with real time detailed lodging reservation metrics, we can drive the results our boards and stakeholders have always wanted. Heroes are ordinary people who make themselves extraordinary. Yeah, that’s us.
