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What is the best way to handle rooms inventory in a hotel where some suites are owned by individuals?

July 14, 2020 | Ask Duetto Team

Q: What is the best way to handle rooms inventory in a hotel where some suites are owned by individuals? The hotel operates, manages and books the suites, but has to divide the rate with the owners. There are 220 total rooms, but 160 are hotel rooms while 60 are individually owned/hotel managed.

STR only allows the hotel’s rooms and rates to be entered into the STR reporting, yet the inventory and rates in the revenue management system would be ALL of the hotel’s inventory.

Will the revenue management forecasts, rate inputs and overbooking percentages be accurate? And since the revenue management systems use STR for data, how accurate can the revenue management be?

A: It’s important to remember that hotels across the world often have special use cases like this. When there is a special use case, it’s important to use flexible tools built on the latest technology so you can pivot where needed.

In terms of a strong revenue management system, owned rooms are no different than occupied rooms when they are occupied by their owners. When the owners have vacated and the rooms are available to sell, this should be marked as a vacant room in the PMS. This will inform the RMS when/how to use the rooms in terms of available inventory.

For example, let’s say you have 220 total rooms. Twenty are occupied by owners. Forty are vacated by owners. One hundred and sixty are vacant hotel rooms. A goodRMS will know based on the PMS that there are 200 available rooms to sell.

Pricing those vacant owned rooms is simple. You need to make sure that you have applied the appropriate minimums to those particular rooms so you do not fall below a threshold of profitability (since we know that you need to share the revenue with the owner).

Smith Travel partners with a few RMS solutions, including Duetto, and we share data back and forth, but the data we ingest from STR does not impact our pricing or forecasting, as it is largely backward looking data.

A good RMS will use actual data from your PMS at the transactional level to determine owner trends (occupied/vacant), room type trends, and occupancy trends to ensure the optimal forecast, rate recommendation, and overbooking recommendations.

I’m not totally sure of all the details of your individual situation, but you may just want to completely ignore the 60 owned/managed rooms. If that’s the case, this is even simpler. Duetto, for example, can ignore that inventory and treat your hotel asa 160 room hotel, yielding it as such. We are able to filter out certain room types as they come across from the PMS to handle this use case.

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This question was answered by:

Daniel Lofton
Director of Hospitality Solutions, Americas

Daniel has served in several roles throughout his time at Duetto over the last four years, with the lion’s share of his time spent in consulting, working in the field with Duetto customers to optimize their revenue strategy. Prior to that, he was a Director of Revenue Management at Landry’s Hospitality where he worked with both their gaming and non-gaming hotels. Over the course of seven years with them, he handled property openings, brand transitions, and expansions.

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