Revenue optimisation should be a basic tenet of any business at any given time, but it is the primary consideration for most hospitality businesses in the new world we find ourselves in.
It is in this context that experienced commercial leader Judith Cartwright has launched Black Coral Consulting to provide innovative optimisation solutions to help hotels, destination resorts, spas and F&B venues unleash their profit potential by identifying new revenue streams.
“One can optimise revenues per square metre, regardless of the brand level they have. But often you have a lot more opportunity in the ultra-luxury sector because you have a lot more outlets to work with. For example, tennis courts, huge spas, banquet halls - have a lot more revenue centres, so to speak, to optimise,” Cartwright, Founder and Managing Director, Black Coral Consulting, tells us.
“I always tell people - give me a price point, give me the inventory and distribution, and I'll optimise it for you.”
“I always tell people - give me a price point, give me the inventory and distribution, and I'll optimise it for you”
– Judith Cartwright
Leveraging Judith’s more than two decades of experience working in senior commercial roles for major hospitality brands including Kerzner International, during which time she achieved unprecedented results, Black Coral Consulting works with developers, operators and asset managers to create a strategic roadmap for commercial success.
The consultancy’s wide-ranging portfolio of specialist services includes developing commercial strategies, conducting audit and gap analysis and systems and platforms reviews, advising on pricing, budgeting and inventory optimisation, crisis management, creating bespoke standard operating procedures, training and education and more.
“Take spas, for example. Spas usually have a very big footprint in the hotel, but they have a lot of square metres. When you look at optimising spas, you take a look at which treatment does not have a high cost, but has a high price point and you want to make these available during your peak periods. You also want to make sure that you do have the right amount of therapists available during your peak periods. You wouldn't want to schedule people on break in your peak periods. For instance, facials usually cost more than a massage, so you can train your spa reception to try and convert massages to facials over peak periods.
“Many spas open late at around 10am, while there may already be a demand for treatments early on in the day. These are opportunities that can be capitalised.
“We need to build the total revenue management and culture in the hotel around revenue optimisation. The team needs to have the right training – this is key – otherwise they will convert what the guest wants and lose the opportunity to optimise.”
Coaching hospitality executives is one of Cartwright’s fortes, helping them to build commercial roadmaps to optimise revenues and understand the essential role revenue optimisation plays in achieving growth.
Judith also advises on best practice, develops bespoke standard operating procedures (SOPs), trains talent and conducts workshops to help hospitality businesses integrate revenue optimisation into their company culture.
“It’s often about asking important questions. What do you do with that banquet space if it’s not busy? Do you lease it out to giftshops or boutiques to showcase their products? Do you convert them into paddle tennis or into gyms as the demand for fitness increases? What do you do with banquet kitchens? Perhaps use them as cloud kitchens or lease them out to others for added revenue?
“What we do is we break down each and every revenue centre, see how profitable every space is, and work from there.”
Revenue optimisation is equally important in the distribution world as well and the distribution world has become very complex, Judith tells us. “At the end, it's down to the end-consumer on how he or she wants to book. It’s the end consumer that we need to influence – today I might be a customer who books directly with a hotel. Tomorrow, I might book through a third-party website. And the next day, I might book through a travel agency or a tour operator. It depends on the travellers’ needs, it also depends on the destination that they are travelling to and equally how much time do they have to set it all up?
“When you spend more on your vacations and on ultra-luxury segments in general, travel agents and tour operators are very, very important. It's just an extension of your sales arm really,” says Cartwright.