Teamwork is the key for successful serviced apartment operations

Joerg Happel By Joerg Happel
Uploaded 17 January 2017

Establishing the ideal team and strategy for your serviced apartments is essential, says Joerg Happel of IDeaS Revenue Solutions.

Following the record growth the serviced apartment sector saw in 2015, the European market continues to enjoy rude health with transaction volumes climbing by a third last year.

It was a similar scene in North America - the world's largest market - where the Apartment Service Worldwide's Global Serviced Apartments Industry Report 2016/17 reported that room revenues exceeded $13 billion in 2015, up more than $1 billion from the previous year and occupancies continued at the high rate of 76.4 per cent.
 
As the serviced apartment market and guest demand continue to expand, owners are turning to their revenue management teams to help monitor and predict the needs of their long-term guests.

Even though there are fewer long stay decisions to be made, those are the ones that have a greater impact on the bottom line, and some losses can be difficult to replace. These unique risk and uncertainty factors can be overcome by establishing the right internal team and focusing on a customised revenue management strategy.

Whether you are planning to enter the serviced apartment market or aiming to maintain the success of a current property, keep the following tips in mind to help differentiate you from the competition and ensure revenue growth: 

1. Build the right team that will thrive in the serviced apartment market
Finding and maintaining an internal team for serviced apartments isn't easy - but it's not an impossible feat.

Start by developing a strong sales force that will drive results and create a solid occupancy base across all aspects of your serviced apartment business - project business, corporate contracts, relocations, etc.

Ensure the sales team doesn't act in isolation; pricing and evaluation requires data-driven analysis that is best supported by an effective revenue management team, who must also work with the marketing team to create the right demand at the right price.

All of this needs to be done in close cooperation with the operation and finance teams, as inventory decisions will impact staffing needs, planning and costs. Additionally, with all of these moving pieces, the revenue manager often serves as the link between all departments, making it vital that this role be filled by a savvy individual who focuses on the right data, possesses strong analytical abilities and demonstrates interactive internal communication skills.  

2. Set your team up for long-term success
Focusing on business mix optimisation and the analytics involved around this are key for the overall success of your property and team.

Serviced apartment revenue managers will find themselves responsible for more data points and inventory and pricing decisions than their shorter stay counterparts do, as they look to balance the peaks and valleys of long stay demand with shorter stay business. It's the dual analysis of these factors that's key to effectively managing a serviced apartment property.

Luckily there are tools and resources available to assist with the analysis, which can help all team members better understand the analytics behind revenue optimisation.

Collaborative learning is essential, and the entire team should have a foundational knowledge of revenue management. Building a revenue and pricing culture throughout the organisation will lead to effective communication and strong, long-term results.

Additionally, it's important to set overall goals for your team to hold themselves accountable to and measure their success against. Three important categories include:
Financial: Are you meeting your RevPAR, ROI, GOP and EBITA targets and delivering to your owners, shareholders and asset managers?
Competitive: How are you doing compared to your competition and overall market performance in terms of market share?
Capabilities: Are you growing your revenue management team and capabilities for long-term effectiveness and sustainability?

3. Support your team with the right tools and technology
For serviced apartment revenue management teams, the right analytical tools are essential to understanding guest data and determining the right business mix and pricing of every reservation.

Begin building this toolbox by selecting and implementing a nimble, scalable revenue management technology. Don't be limited to rule-based pricing or off-the-cuff recommendations. Instead utilise advanced revenue solutions that offer dynamic and customisable analytics that automatically send input to your reservation system.

For serviced apartment properties, these solutions are particularly helpful for doing the heavy lifting and making sense of all the forecasting, price and guest data, allowing the revenue team to focus on strategic decisions that drive results to the next level.

Additionally, combining revenue management with change management may help differentiate your strategy from the competition. Change management refers to how hotels transition their individuals and teams and align their resources, processes and technology to meaningfully restructure their organisation toward a common goal.

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