There are many indicators in Revenue Management.
But there is one that is especially useful for understanding what is happening with our bookings:
pick-up.
Pick-up measures how many new bookings we have received for a given date over a specific period.
Put another way, it tells us the speed at which our future occupancy is growing.
A simple example
Imagine that on Monday we have 20 rooms booked for next Saturday.
On Thursday we check that date again and we have 29 rooms.
Our pick-up over those three days has been:
9 rooms.
That information may seem simple, but it is extremely useful.
It tells us there is movement and that demand is growing.
Why does it matter so much?
Suppose our hotel has 40 rooms.
There are still ten days to go and we already have 30 booked.
If we also see that eight new bookings have come in over the last three days, we have a clear sign that demand is accelerating.
In that situation we could consider different decisions:
- raising rates;
- withdrawing certain promotions;
- limiting discounts;
- reviewing restrictions;
- holding back inventory for more profitable segments.
The specific decision will always depend on the context.
What matters is that pick-up lets us act before it is too late.
What happens if pick-up is low?
The opposite can also happen.
We may see that bookings are coming in much more slowly than expected.
Before lowering prices automatically, we should investigate what is going on.
For example:
Has overall demand for the destination dropped?Is our competition offering better conditions?Do we have a visibility problem?Are there rates loaded incorrectly?Do we have restrictions that make booking harder?Is our website working properly?
Pick-up does not tell us directly what the problem is.
But it does warn us that something is happening.
Comparing is essential
The data is even more useful when we compare it.
We can analyse:
- pick-up this week compared with last week;
- pick-up compared with the same period last year;
- pick-up by day of the week;
- pick-up by channel;
- pick-up by room type.
The more information available, the more precise our strategy can be.
The goal: anticipating
Revenue Management is not only about reacting.
Its real value lies in the ability to anticipate behaviour.
When we analyse pick-up regularly, we can detect changes in demand before they are fully reflected in our occupancy.
And that allows us to make pricing decisions with more information.