revenue management thesis - mario takao roma momma

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An Exploratory Study of Revenue Management and Hotel Distribution Practices in Coastal Hotels Located in São Sebastião, Brazil Mario Takao Roma Momma M.Sc. in Hospitality Management 2016

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Page 1: Revenue Management Thesis - MARIO TAKAO ROMA MOMMA

An Exploratory Study of Revenue Management and

Hotel Distribution Practices in Coastal Hotels

Located in São Sebastião, Brazil

Mario Takao Roma Momma

M.Sc. in Hospitality Management

2016

Page 2: Revenue Management Thesis - MARIO TAKAO ROMA MOMMA

An Exploratory Study of Revenue Management and

Hotel Distribution Practices in Coastal Hotels

Located in São Sebastião, Brazil

Mario Takao Roma Momma

A thesis presented in partial fulfillment of the requirements for

M.Sc. in Hospitality Management

Presented to the School of Hospitality and Tourism

Dublin Institute of Technology

Cathal Brugha Street

Submitted to: Dr Deirdre Quinn

25th February, 2016

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DECLARATION

I certify that this thesis which I now submit for examination for the award of MSc in

Hospitality Management, is entirely my own work and has not been taken from the

work of others, save and to the extent that such work has been cited and

acknowledged within the text of my work.

This thesis was prepared according to the regulation of the Dublin Institute of

Technology and has not been submitted in whole or in part for an award in any

Institute or University.

The institute has permission to keep, to lend or to copy this thesis in whole or in part

on condition that any such use of the material of the dissertation by duty

acknowledged.

Signed: _________________________________ Date: _________________

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ACKNOWLEDGEMENTS

I would like to take this opportunity to acknowledge and express my sincere thanks to

some people.

Firstly I would like to thank DIT for giving me the opportunity to study here, meet

lovely people, make good friends and acquire knowledge. This was a fantastic

experience and could have not been better!

Secondly, Dr. Deirdre Quinn, my supervisor, whom above all had the patience to read

my endless chapters. Your wisdom, advices and positivism were absolutely vital for

the completion of this dissertation. The lessons I learned from you was that writing

less means more. You made me complete this without a single second of stress, thank

you!

Jennifer McMahon, you were also a huge part of this! Thank you so much for all your

support, patience and love. You made me stand up again when I fell! I will be

eternally thankful for that. Unfortunately, things in life do not always happen as we

planned.

How could I possibly be motivated at all without you, May May and Gi Gi? More

than knowledge I gained friends that I will care for the rest of my life! With you I

learnt to listen and the importance of having someone that wants to listen to you.

Amongst other things, of course! Working as a group was just a small detail, the

pleasure of getting things done with zero stress and loads of fun is the key thing!

Thank you! #wolfpackforever

Mary thank you so much for your help proofreading my thesis. Without you it would

be very hard to understand the way I think by reading what I write. Typos are a small

problem now as Google and Microsoft do that for you. The problem is a Portuguese

speaker writing academically in English. A sentence that makes perfect sense to me,

may make no sense to other people.

Lastly my Mom, Dr. Laura Silvia de Lima Roma whom is someone really special in

heaven because she deserved more than any person I have ever met. Well, words are

not enough but I am here because of you! Wherever you are right now I know you are

proud and happy with this achievement. I so wish you were here in person though for

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my graduation! I cannot just say thank you, it is too small. I exist because of you!

One of the lessons I learned from you is that whatever belongs to us is somewhere out

there, waiting for us. No need to rush, no need to worry about it. At some point in life,

we will find it. And this masters is proof of that! Love you Mom!

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ABSTRACT

This dissertation explored how Revenue Management (RM) core activities (or

tactics), including distribution, are being implemented in coastal hotels. The region of

São Sebastião, Brazil is the place where the hotels are being studied. The objectives of

this research were firstly to critically review the literature related to RM and its core

activities and to examine how RM and distribution tactics are being implemented in

costal hotels in the region studied. Also, the author sought to identify relevant

challenges and opportunities when applying RM in coastal hotels. The literature

review critically analyzed the main RM activities and their applicability within coastal

hotels in general. In order to collect the primary data, a qualitative methodology was

followed and semi-structure interviews were held in situ. A total of fourteen

interviews were conducted. Ethical concerns and validity were acknowledged. A

major limitation of this dissertation was the word count, which restricted the level of

detail of findings presented in the thesis. The most important findings of the study

were that general managers (GMs) and owners in the region studied did not

understand RM holistically but they all implemented RM and distribution tactics,

adapted to the particularities of the region, without knowing they belonged to the RM

umbrella. There were also findings related to pricing. Most GMs and owners applied

differential pricing, some applied dynamic pricing, almost none of them applied cost

based pricing. The reasons for adjusting pricing were related to seasonality, method of

payment, loyalty status, location and proximity to the arrival date. Cancellation

policies were very flexible and they rarely helped the hotel to increase revenue.

Overbooking was seen as a very negative RM tactic however, there were indications

that the region is suitable for overbooking. In terms of distribution the region is very

dependent on one single Online Travel Agent (OTA). The challenges were discussed

in terms of seasonality, weather forecast and general challenges related to developing

countries. A few opportunities could be identified for instance targeting weddings to

increase revenue during low and medium seasons. Other opportunities were related to

education, loyalty programmes and distribution.

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Table of Contents

Declaration ................................................................................................................ i

Acknowledgements .................................................................................................. ii

Abstract ................................................................................................................... iv

Glossary of Abbreviations ....................................................................................... x

Chapter One: Introduction .................................................................................... 1

1.1 RESEARCH RATIONALE ................................................................................. 1

1.2 APPLICABILITY OF REVENUE MANAGEMENT IN COASTAL SMALL AND

MEDIUM HOTELS .......................................................................................... 2

1.3 THE FUTURE OF REVENUE MANAGEMENT .................................................... 3

1.4 RESEARCH QUESTION ................................................................................... 3

1.5 RESEARCH OBJECTIVES ................................................................................ 4

1.6 CHAPTERS OUTLINE ...................................................................................... 4

1.7 CONCLUSION ................................................................................................. 5

Chapter Two: Literature Review ........................................................................... 6

2.1 INTRODUCTION .............................................................................................. 6

2.1.1 RM DEFINITION ............................................................................................ 6

2.1.2 WHAT ABOUT RM IN OTHER CONTEXTS? ..................................................... 7

2.1.3 THE ROAD MAP ............................................................................................. 8

2.2 THE RM PROCESS ......................................................................................... 8

2.3 RM CORE ACTIVITIES................................................................................... 9

2.3.1 FORECASTING.............................................................................................. 10

WHY FORECAST? .......................................................................................... 10

WHERE TO START FROM? .............................................................................. 10

A GAP WITHIN THE FORECASTING RESEARCH ................................................ 10

2.3.2 PRICING ....................................................................................................... 11

VARIABLES TO CONSIDER ............................................................................. 11

COST-BASED PRICING VERSUS WILLINGNESS-TO-PAY (WTP) ........................ 12

2.3.3 DIFFERENTIAL PRICING .............................................................................. 13

HOW TO APPLY DIFFERENTIAL PRICING? ....................................................... 14

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2.3.4 DYNAMIC PRICING ...................................................................................... 15

2.4 CAPACITY MANAGEMENT ........................................................................... 16

2.4.1 OVERBOOK AS AN ALTERNATIVE ................................................................ 16

THE VALUE OF OVERBOOKING ...................................................................... 17

2.5 TECHNOLOGY-DRIVEN DISTRIBUTION CHANNELS ...................................... 17

2.5.1 DEALING WITH ONLINE TRAVEL AGENCIES ................................................ 18

2.6 RM IN COASTAL HOTELS ............................................................................ 18

2.6.1 COASTAL HOTELS’ GUEST SEGMENTATION ................................................ 19

2.6.2 WILLINGNESS-TO-PAY FOR COASTAL HOTELS ........................................... 20

2.6.3 PRICING COASTAL HOTEL’S ROOM ............................................................ 20

2.7 CONCLUSION ............................................................................................... 20

Chapter Three: Methodology ............................................................................... 23

3.1 INTRODUCTION ............................................................................................ 23

3.2 SECONDARY DATA ....................................................................................... 24

3.3 METHODOLOGY AND METHOD JUSTIFICATION ........................................... 24

3.3.1 PHILOSOPHY OF THIS RESEARCH: INTERPRETIVIST .................................... 24

3.4 RESEARCH DESIGN ...................................................................................... 25

3.4.1 SAMPLING.................................................................................................... 25

3.4.2 LOCATION OF THE INTERVIEWS .................................................................. 26

3.4.3 INSTRUMENT TO COLLECT THE DATA: RESEARCH PROTOCOL ................... 26

3.4.4 THE COLLECTION OF THE PRIMARY DATA ................................................. 27

3.4.5 RESEARCH METHOD.................................................................................... 27

3.4.6 THE INTERVIEW PROCESS ........................................................................... 27

3.5 ANALYSIS .................................................................................................... 28

3.6 ETHICAL CONCERNS ................................................................................... 29

3.7 VALIDITY ..................................................................................................... 30

3.8 LIMITATIONS ............................................................................................... 30

3.9 CONCLUSION ............................................................................................... 31

Chapter Four: Findings ....................................................................................... 32

4.1 INTRODUCTION ............................................................................................ 32

4.2 REVENUE MANAGEMENT AWARENESS ........................................................ 32

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4.3 SEASONALITY IN THE CONTEXT OF COASTAL HOTELS IN THE REGION OF

SÃO SEBASTIÃO ........................................................................................... 33

4.4 REVENUE MANAGEMENT TACTICS FOR COASTAL HOTELS ........................ 35

4.4.1 REVENUE MANAGEMENT TACTICS FOR COASTAL HOTELS DURING LOW AND

MEDIUM SEASONS ....................................................................................... 35

WEDDINGS ................................................................................................... 35

4.4.2 REVENUE MANAGEMENT TACTICS FOR LOW, MEDIUM AND HIGH SEASONS

.................................................................................................................... 36

THE COLLECTION, INTERPRETATION AND USAGE OF HISTORICAL DATA ......... 36

FORECASTING ............................................................................................... 37

PRICING ........................................................................................................ 38

DIFFERENTIAL PRICING ................................................................................. 39

OTHER FACTORS INFLUENCING PRICING ........................................................ 40

DYNAMIC PRICE ........................................................................................... 41

CANCELLATION POLICIES .............................................................................. 42

4.4.3 REVENUE MANAGEMENT TACTICS FOR THE HIGH SEASON ........................ 43

OVERBOOKING ............................................................................................. 43

4.5 DISTRIBUTION ............................................................................................. 44

4.6 CONCLUSION ............................................................................................... 46

Chapter Five: Discussion ...................................................................................... 47

5.1 INTRODUCTION .................................................................................................. 47

5.2 OBJECTIVE TWO - EXAMINE THE KNOWLEDGE THAT COASTAL HOTEL

MANAGERS FROM SÃO SEBASTIÃO, BRAZIL WITH REGARD TO REVENUE

MANAGEMENT PRACTICES ........................................................................... 48

5.2.1 REVENUE MANAGEMENT AWARENESS ........................................................ 48

5.3 OBJECTIVE THREE - EXAMINE THE MAIN REVENUE MANAGEMENT TACTICS

APPLIED IN THE HOTEL INDUSTRY IN THE CONTEXT OF COASTAL HOTELS

LOCATED IN SÃO SEBASTIÃO, BRAZIL ......................................................... 49

5.3.1 THE COLLECTION, INTERPRETATION AND USAGE OF HOTEL HISTORICAL

DATA ........................................................................................................... 49

5.3.2 FORECASTING.............................................................................................. 50

5.3.3 PRICING ....................................................................................................... 51

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5.3.4 DIFFERENTIAL PRICING .............................................................................. 51

5.3.5 DYNAMIC PRICING ...................................................................................... 53

5.3.6 CANCELLATION POLICIES ........................................................................... 53

5.3.7 OVERBOOKING ............................................................................................ 54

5.4 OBJECTIVE FOUR - EXAMINE HOW ROOMS ARE BEING DISTRIBUTED IN

COASTAL HOTELS IN SÃO SEBASTIÃO, BRAZIL ............................................ 55

5.5 OBJECTIVE FIVE – IDENTIFY THE CHALLENGES AND OPPORTUNITIES WHEN

APPLYING REVENUE MANAGEMENT AND DISTRIBUTION TACTICS IN COASTAL

HOTELS IN SÃO SEBASTIÃO, BRAZIL ............................................................ 56

5.5.1 CHALLENGES ............................................................................................... 56

SEASONALITY IN THE CONTEXT OF COASTAL HOTELS .................................... 56

5.5.2 OPPORTUNITIES........................................................................................... 57

WEDDINGS – AN OPPORTUNITY TO INCREASE REVENUE DURING THE LOW

SEASON ........................................................................................................ 57

A FORMAL LOYALTY PROGRAM .................................................................... 58

Chapter Six: Conclusion ....................................................................................... 60

6.1 INTRODUCTION .................................................................................................. 60

6.1.1 OBJECTIVE ONE - CRITICALLY REVIEW THE LITERATURE SURROUNDING

REVENUE MANAGEMENT AND ROOM DISTRIBUTION PRACTICES WITHIN

COASTAL HOTELS ........................................................................................ 60

6.1.2 OBJECTIVE TWO - EXAMINE THE KNOWLEDGE THAT COASTAL HOTELS’

MANAGERS FROM SÃO SEBASTIÃO, BRAZIL HAVE REGARDING REVENUE

MANAGEMENT PRACTICES ........................................................................... 61

6.1.3 OBJECTIVE THREE – EXAMINE THE MAIN REVENUE MANAGEMENT TACTICS

APPLIED IN THE HOTEL INDUSTRY IN THE CONTEXT OF COASTAL HOTELS

LOCATED IN SÃO SEBASTIÃO, BRAZIL ......................................................... 61

6.1.4 OBJECTIVE FOUR – EXAMINE HOW ROOMS ARE BEING DISTRIBUTED IN

COASTAL HOTELS IN SÃO SEBASTIÃO, BRAZIL ............................................ 63

6.1.5 OBJECTIVE FIVE – IDENTIFY THE CHALLENGES AND OPPORTUNITIES WHEN

APPLYING REVENUE MANAGEMENT AND DISTRIBUTION TACTICS IN COASTAL

HOTELS IN SÃO SEBASTIÃO, BRAZIL ............................................................ 63

CHALLENGES ................................................................................................ 63

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OPPORTUNITIES ............................................................................................ 64

6.2 RECOMMENDATIONS ................................................................................... 66

6.3 STATEMENT OF CONTRIBUTION TO THE LITERATURE ................................ 67

6.4 OVERALL CONCLUSION ............................................................................... 67

Reference List ........................................................................................................ 69

APPENDIX 1 – Research Protocol in English and Portuguese ........................... 78

APPENDIX 2 – Fully Transcribed Interview in English ..................................... 89

APPENDIX 3 – Fully Transcribed Interview in Portuguese ............................. 109

APPENDIX 4 – Analysis Themes ........................................................................ 132

APPENDIX 5 – Introduction email in English and Portuguese ........................ 133

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x

GLOSSARY OF ABBREVIATIONS

RM Revenue Management

SMH Small and Medium Hotel

OTA Online Travel Agency

GM General Manager

WTP Willingness to Pay

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CHAPTER ONE: INTRODUCTION

This research project explores the application of RM and distribution tactics within a

very specific context: small and medium hotels (SMHs) located in the coastal region

of São Sebastião, Brazil. Through a literature review and findings from empirical

research the author aims to provide insights for hoteliers in terms of how RM and

distribution tactics can maximize revenue of SMHs located in the coast of a

developing country. Moreover, the author wishes to identify opportunities to improve

their revenue management, distribution practices and the respective challenges.

Distribution is directly related to RM because every distribution channel has an

associated cost that affects the room rates. Pricing is the most important tactic of

revenue management. Therefore, managing the channels impacts on RM pricing

tactics and that is why distribution is being integrated in the research (Kimes, 2010;

Guillet & Mohammed, 2015).

1.1 Research Rationale

The origin of this research project was based on the RM literature that demonstrated

that the vast majority of research was conducted in the context of Asia, Europe and

North America. No attention seemed to be given to hotels in South America.

Moreover, it is clear how powerful RM tactics can be, and this is one of the author’s

reason to investigate this topic. For instance, because of effective RM tactics

American Airlines had a profit of US$1.4 billion, the Marriott hotel chain increased

its profit to approximately US$35 million and Hertz Car Rental’s profits were

increased by approximately five percent (Smith, Leimkuhler, & Darrow, 1992;

Geraghty & Johnson, 1997 as cited in Guadix, Cortés, Onieva & Muñuzuri , 2011;

Cross, 1997).

In addition, the author managed to find a research gap that combines the application

of RM and distribution tactics in SMHs located in a coastal region of a developing

country.

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1.2 Applicability of Revenue Management in Coastal Small and

Medium Hotels

The RM concept is very broad. Cross (1997) and Talluri & Van Ryzin (2005) argue

that RM is all about generating as much revenue as possible from a specific customer

segment by finding optimal levels of supply to match a given demand.

Authors also argue that RM is applicable in hotels because they have:

(i) high perishable inventory

(ii) fixed capacity

(iii) low variable costs

(iv) high fixed costs

(v) sell a service to a volatile demand in markets where customers have the option

to book in advance

(Kimes, 2000; Ng, 2008; Ivanov & Zhechev, 2012; Legohérel, Poutier & Fyall, 2013;

Guillet & Mohammed, 2015).

Hence, it is plausible to say that RM is applicable in any type of hotel despite its size

or location.

However, Ivanov & Zhechev (2012) and Guillet & Mohammed (2015) have

demonstrated that most research on hotel RM was concentrated within Asia, Europe

and North America and the majority of research followed a quantitative methodology.

Also, Morrison & Thomas (1999) argue that researchers often treated the management

of small hospitality businesses with less priority and had a wrong understanding of

their reality.

Therefore, the author believes that the application of RM must be researched from a

fresh perspective. For instance, developing countries face significant challenges

related to their economy, politics and local community involvement (Brohman, 1996).

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Therefore the author aims to explore how this context affects the applicability of RM

and distribution tactics.

1.3 The Future of Revenue Management

As Kimes (2010) suggests, the future of RM is technologically driven. Also, social

networking and mobile technology are the future of hotel distribution. Furthermore,

management teams will need to have excellent analytical and communication skills in

order to transform computer insights into successful managerial decisions.

Large city hotels seem to have resources to invest in technology and to hire skillful

management teams. It is implied then that these hotels can survive the future. What

about SMHs? More specifically, what about coastal SMHs in developing countries?

Can they survive the future and if so, how can they continue to survive?

The rationale of this dissertation is to give a new perspective that has not yet been

given: explore the RM and distribution tactics in South America using a qualitative

method. Also, to be even more specific and in contrast with what has been researched,

the author wishes to investigate a particular hotel category: coastal hotels.

1.4 Research Question

Based on the research rationale previously explained the research question of this

dissertation is:

How are managers of coastal small and medium hotels in the region of São Sebastião,

Brazil are dealing with RM and distribution practices?

In order to guide the research project towards answering the research question several

objectives were established.

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1.5 Research Objectives

Critically review the literature in the field of hotel distribution and RM and its

application in coastal hotels.

Examine the knowledge that coastal hotels’ managers from São Sebastião, São

Paulo State, Brazil have with regard to RM practices.

Examine the main RM tactics applied in the hotel industry in the context of

coastal hotels located in São Sebastião, Brazil.

Examine how rooms are being distributed in coastal hotels from São

Sebastião, Brazil.

Identify the challenges and opportunities when applying RM and distribution

tactics in coastal hotels in São Sebastião, Brazil.

1.6 Chapters Outline

In the second chapter the literature is critically reviewed and the research topic to be

empirically studied is defined. Also, the hotel RM and distribution core activities

discussed in this dissertation are defined, namely: forecasting, pricing, differential

pricing, dynamic pricing, cancellation policies, overbooking and technology-driven

distribution channels.

In chapter 3 the author describes and defends the methodology and the method used to

collect the primary data. Also, the author gives an overview of how the fieldwork

evolved. The sampling technique used, the limitations involved and the ethical

concerns are also presented.

Chapter 4 presents the findings of the fieldwork. Interviews were analyzed based on a

set of themes and sub-themes established. A total of fourteen interviews were

analyzed and several quotes used to support the findings.

In chapter 5, the key findings are presented and discussed according to each objective.

These findings are discussed along with the scholars’ arguments presented in the

literature review.

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Finally in chapter 6, according to the objectives defined previously the author arrives

at conclusions which summarise the key findings of the research. Also in this chapter,

the author explains the contribution of the research and directly answers the research

question.

1.7 Conclusion

Hotels are capacity-constrained firms that offer a perishable product. Revenue

management is managerial tactics that balance supply and demand by managing

customer uncertainties and applying optimal prices. When successfully applied, RM

maximizes the hotel total revenue. This has not been investigated extensively in South

America and most research followed a quantitative methodology and this is why the

author has chosen to study coastal hotels in South America following a qualitative

methodology. To holistically understand RM and hotel distribution, as well as the

particularities of coastal hotels, the literature on these topics is critically reviewed in

the next chapter.

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CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

In this chapter the concept of RM will be defined and reviewed. In addition

management tactics or core activities that encompass RM will be examined. After

discussing RM the author will establish RM in the context of coastal hotels as this is

the main purpose of this research project. Finally, the chapter will conclude by

examining the applicability and suitability of RM within coastal hotels.

2.1.1 RM Definition

According to Cross (1997) and Talluri & Van Ryzin (2005), RM thinking exists since

the commencement of commerce itself. Nowadays, the desire to generate revenue

from a given segment is subject to the same variables that existed eight thousand

years ago. Since its first appearance which occurred during the final years of the

seventies, through the North American aviation industry, RM has evolved. What

makes it different today from the past is it has been become more strategic in nature

and technology has become the main RM driver (Kimes, 2011).

A substantial number of authors define revenue management. Ivanov & Zhechev

(2012) and Guillet & Mohammed (2015) critically reviewed a substantial number of

research papers that studied RM and its core activities. Therefore, the most common

definition used amongst the majority of RM authors is that RM is about selling the

right product at the right price, at the right time to the right customer. Legohérel,

Poutier & Fyall (2013) affirm that hotels have both high perishable inventory and

fixed capacity whereas Cross (1997, pp. 131-32) argues that RM is ‘the application of

disciplined tactics that predict consumer behaviour at the micro-market level and

optimise product availability and price, to maximise revenue growth.’

Cross’s (1997) definition reflects the field of work of a revenue manager, which are

the main RM areas that this chapter will address. In terms of “disciplined tactics”, this

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chapter analyses the main RM tactics used by managers as follows; the word

“predict” refers to the exercise of forecasting; “micro-market” means the different

customer segments that a hotel can target; “optimize product availability” is the way

that room stock is managed and distributed; in terms of “price”. This chapter

addresses the pricing process, differential pricing and dynamic pricing; and as a result

of the combination of these tactics, revenue is maximised.

Nevertheless, changes such as cancellations, no-shows, walk-ins, length of stay,

competitors’ movements and seasonality influence the level of complexity of the

process of applying RM tactics to the hotel industry (Bobb & Veral, 2008).

2.1.2 What about RM in other Contexts?

A significant amount of research has been undertaken in respect of the core activities

of RM currently applied in the hotel industry. These include: customer segmentation,

pricing, forecasting, overbooking, room allocation and channel management (Ivanov

& Zhechev, 2012; Guillet & Mohammed, 2015). However, RM does not seem to have

been reviewed or examined in different contexts. For instance, much research has

been undertaken in the area of large hotel chains in developed and stable countries

(Guillet & Mohammed, 2015) but the opposite research scenario seems to be a little

neglected. Lee-Ross & Johns (1997) concluded that in spite of a significant

managerial “cultural” elements being exercised by small and medium hotel’s (SMH)

managers, RM can still be effective. These “cultural” elements of SMH such as the

“hands-on” managerial style, the lack of overbooking policies and displacement of

profit maximisation, do not impede on the success of RM in small and medium

enterprises (SMEs). Nonetheless managers must understand that RM cannot be more

important than basic managerial elements. It requires better communication between

departments and that RM highly depends on skillful, motivated and talented

employees.

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In particular the coastal hotels category also seems to be in need of new research

studies in terms of RM as only few authors were identified in this area. These types of

hotels have very specific characteristics such as very unstable demand due to

seasonality and very specific customer needs (Ekonomou, Neofitou & Matsiori, 2014;

Modica, Landis & Pavan, 2009). This category of hotel could be practically sold out

during summer and vacation periods but reach significant low levels of occupancy

during colder seasons of the year. Sometimes in countries where winter is not

necessarily cold, seasonality not only varies according the time of the year but also

according to the weather and the day of the week (Getz & Nilsson, 2004). However,

having said that, the application of RM in small and medium coastal hotels is the area

of research of this paper and is therefore evaluated in detail.

2.1.3 The Road Map

With the aim of serving as a basis for an empirical research, this literature review

focuses on critically approaching the general understanding of RM and its

applications to coastal hotels. Hence, it is relevant to initially discuss the core

activities of RM and then deliberate on the application of RM in coastal hotels given

their unique characteristics (Ekonomou et al., 2014; Modica et al., 2009)

2.2 The RM Process

RM is a process that follows a few phases and encompasses managerial activities that

can be called RM tactics. The starting point is to set goals in terms of RM

performance measurements for a determined period of the year. These include:

occupancy

revenue per available room (RevPar)

total revenue per available room (TotRevPar)

total revenue per available square foot (TotRevPASF)

gross operating profit per available room (GOPPAR) and

average daily rate (ADR)

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Next, it is important to collect and analyse historical data in terms of booking patterns,

cancellations, walk-ins, denials and length of stay divided by customer segments.

Seasonality and competition should also be considered. With all this data compiled,

the next phase is to forecast demand, occupancy or revenue.

Therefore, decisions in terms of pricing, capacity control (including overbooking) and

distribution are made for a particular customer segment, for a particular day and for a

specific length of stay (LOS).

Practical examples of the RM process and the implementation of RM core activities

are identified through research conducted by several scholars such as Guadix, Cortés,

Onieva & Muñuzuri (2010, 2011), Ivanov & Zhechev (2012), Guillet & Mohammed

(2015), Vinod (2004), Lieberman (2003), Kimes (2011), Pullman & Rogers (2010),

Shy (2008) and Elbanna, Eid & Kamel (2015).

2.3 RM Core Activities

RM activities are an important element of the RM process. They are part of the

decision-making and implementation phases of the RM process. As Vinod (2004)

argues, revenue managers use registered historical data in order to forecast different

customer segments and occupancy levels, adjust to seasonality and competitors’

actions. Their final goal is to:

(i) set optimal prices in relation to demand

(ii) control room allocation and

(iii) apply overbooking polices

Ivanov & Zhechev (2012) and Guillet & Mohammed (2015) demonstrate how these

RM activities have been extensively studied amongst researchers. Therefore, the

subsequent paragraphs will discuss the following RM activities:

forecasting

pricing

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capacity management and overbooking and

room distribution

2.3.1 Forecasting

Why Forecast?

Forecasting is an important phase of the RM process because despite the fact that it is

rarely a hundred percent accurate, it provides managers with strong quantitative

valuable inputs for making decisions instead of having only intuition inputs. The most

common variable to forecast future occupancy levels is to provide an idea of how

busy the hotel will be, allowing managers to effectively allocate relevant resources

and project revenue (Vinod, 2004; Aghazadeh, 2007).

Where to Start From?

As it is implied, the historical data of the hotel is needed in order to forecast

(Schwartz & Cohen, 2004a). In the hotel industry, the data that supports managers

when forecasting is either related to the day the reservation was made or to the actual

day the room was consumed (Weatherford & Kimes, 2003). Depending on the

manager’s objective, forecasts can be done based on various data such as room nights

booked, denials, cancellations, check-ins, check-outs, late check-outs, early departure,

no-shows, walk-ins, occupancy percentage, average LOS, average guests per room,

RevPar and ADR (Weatherford & Kimes; Hayes & Miller, 2011).

A Gap within the Forecasting Research

After reviewing the literature on forecasting it was not clear whether it is applicable

within SMHs. As it is not straightforward to apply forecasting in SMHs (Lee-Ross &

Johns, 1997), Bodea & Fergusson (2014) argue that managers in this situation can

employ a qualitative forecast. Qualitative forecasting is driven by intuition and by the

manager’s own experience, which can also be used in combination with quantitative

forecasting. In addition, Schwartz & Cohen (2004a, 2004b) argue that managers’

experience, gender and forecasting software interface also play an important role

when forecasting. Specific studies empirically testing qualitative, quantitative or a

combination of both forecasting types within small and medium beach hotels could

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provide meaningful insights for managers of this hotel category.

2.3.2 Pricing

According to Guillet & Mohammed (2015), pricing is the area that researchers are

most interested in. A significant number of authors developed and defended various

different pricing approaches and mathematical models to determine an optimal price

(Ivanov, 2014; Shy, 2008; Ivanov & Zhechev, 2012; Kimes, 2010; Aziz et al., 2011;

Guillet & Mohammed, 2015), making the hospitality industry one of the most

sophisticated industries in terms of effective pricing techniques (Skugge, 2011).

Hayes and Miller (2011) and Cleophas, Yeoman, McMahon-Beattie & Veral (2011)

affirm that effectively pricing is the foundation of successful revenue management,

implying that revenue managers must master the different pricing strategies (Kimes,

2010). Moreover, Cross, Higbie & Cross (2009) and Vinod (2004) define accurate

pricing as the most essential RM component because it guarantees a sustainable

competitive advantage for the hotel. It is plausible to argue that pricing is at the heart

of RM because a room’s price assures the hotel market position. Incorrect pricing of a

room can attract the wrong target guest, alter the perception of the hotel’s quality and

position the hotel in a different category (Legohérel, Poutier & Fyall, 2013; Hayes &

Miller, 2011).

Variables to Consider

There are several variables that can help managers to create or add value to prices in

the hotel industry. For instance the types of services provided the room type, the room

view, the time criteria, payment terms, cancellation policies, distribution channels,

and loyalty (Ivanov, 2014). However, Kimes (2010) argues that the key point is to

adopt a marketing approach to pricing and identify the actual characteristics that

different target guests value the most. Therefore pricing is about creating the right

product at the right value by grouping the above variables together. It is suggested

that the delivery of value through a room can take the forms of bundles or packages.

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Cost-based Pricing versus Willingness-to-Pay (WTP)

It is known within the hospitality industry that cost-based pricing is a common

practice amongst hospitality managers. It is a straightforward pricing philosophy that

involves the total costs related to offering a room to customers plus an added profit.

Therefore, by the end of the sale the hotelier will have paid all the costs and thus

made some profit. Some benefits of this pricing method include:

(a) a very accurate way of pricing

(b) a fair way of charging customers

(c) less risk for the business and

(d) it is a very easy system to apply and teach to others (Bodea & Fergusson,

2014; Shy 2008; Ng, 2008)

This method of pricing may be very effective but despite the above benefits, some

authors state that it is an ineffective pricing approach for hotels (Hayes & Miller,

2011; Verret, 2008).

Alternatively, pricing can be calculated by analysing the customer perspective. It is

argued that the concept of pricing hotel rooms relies on the customer WTP, which

means to price a room based on the maximum rate a customer would be willing to pay

(Bodea & Fergusson, 2014; Skugge, 2011). In addition, according to Hayes & Miller

(2011), the customer’s WTP is directly related to their perception of value implying

that revenue managers should consider the customer’s buying decision process when

pricing. Hayes & Miller (2011) suggests four unique value formulas related to

customer’s perception of value:

buyers’ paying money for a room for themselves

buyers’ paying money for a room for someone else

someone else’s money paying for the buyer’s room and

someone else’s money used for a room for someone else

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They both seem reasonable explanations and different ways to look at pricing but

Kimes (2010) suggests that in reality room rates are mostly based on competition or in

some cases negotiated with distribution channels. However, it is not straightforward

or cheap to find competitive information about pricing divided by customer segments.

In that case the most reasonable technique is to call competitors or check third-party

online channels to gather information on rates for a particular night or for particular

room types.

2.3.3 Differential Pricing

When a customer is willing to pay more than what is being charged, there is a

consumer surplus, money that the customer technically saved. Differential pricing

allows the capture of this surplus thereby maximising revenue (Hayes & Miller,

2011). Differential pricing is also referred to as segmented pricing, price

differentiation, demand-based pricing or price discrimination. It is the practice of

charging different room rates to different customer segments for the same room or

slightly different versions of it (Ivanov & Zhechev, 2012; Ivanov, 2014; Hayes &

Miller, 2011). Differential pricing is recognised by experienced revenue managers as

more powerful than fixed pricing, however, its application can be very limited and

generate negative results for the hotel as customers may perceive it as unfair (Kimes,

2010; Ng, 2008; McMahon-Beattie, 2011; Lee & Jang, 2013; Matilla & Choi, 2014;

Shy, 2008).

Despite the fact that applying differential pricing can increase revenue, revenue

managers must avoid conflicts with customers (Ivanov, 2014). This is achieved by

explaining the rationale behind the pricing strategy and therefore ensuring they are

satisfied with what they are paying. On one hand, Kimes (2010) supports the design

of different product bundles according to different segments in order to increase the

total value and decrease price perception. However, Ivanov (2014) supports that

prices should be balanced between the guest’s rights and the booking terms. That

means the higher the price the more rights the guest should have in terms of

cancelling or amending bookings. Guests paying in advance, staying longer, using

other hotel’s facilities and loyal guests should be offered benefits. Both authors are

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defending the same point from different angles such as pricing. Revenue managers

should understand each guest’s characteristics and increase the room’s value through

packaging or bundling techniques. Informing the relationship between guest’s right

and the respective price charged is also very important. In addition, benefits for those

guests that either paid more, paid in advance, or are frequent guests may be given.

How to Apply Differential Pricing?

One challenge that managers can face when applying differential pricing is the

“migration” between segments. The main segments found within the hospitality

industry are:

senior citizens

students

families

frequent customers

members of selected organizations

possessors of coupons

leisure tourists

business travelers

In order to avoid customers from one segment paying the price from a different

segment, price fences must be applied (Ivanov, 2014; Ng, 2008; Matilla & Choi,

2014; Shy, 2008; Guillet, Law & Xiao, 2014; Kimes, 2010; Guillet & Mohammed,

2015). There are several fences to be applied but the key point to successfully

implement them is to make sure that the criterion of the fence is well explained.

Fences should not be hard to enforce and above all be reasonable for guests (Kimes,

2010; Matilla & Choi, 2014).

Kimes (2010) proposes a rate fence based on purchasing specification and Guillet et

al. (2014) have studied rate fences from a customer perspective. It is suggested that

there is a correlation between lower price, refund terms and the requirement of

purchasing a room in advance. In other words, customers should be effectively

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communicated to about refund conditions and how far in advance the actual purchase

should occur in order to justify the price and its respective restrictions (Guillet et al.,

2014). In cases where a revenue manager considers imposing stringent restrictions on

refund terms or advanced purchases the price offered should be fair and coherent to

justify the inconvenience (Ivanov, 2014; Guillet et al., 2014).

Following the RM process, after forecasting and having understood pricing

techniques, revenue managers must control capacity and separate an adequate number

of rooms for each segment, which is known as capacity management.

2.3.4 Dynamic Pricing

Dynamic pricing has been evolving and has become an area of significant interest for

researchers. This is mainly due to the evolution of technology that facilitates the

updating of prices in real time according to changes in buying patterns and demand

availability (Ng, 2008). The internet has allowed managers to reach a massive

quantity of potential guests and it has become a significant source of information

about demand and buying patterns as guests increasingly buy electronically (Ropero,

2011). It is implied though that the action of dynamically changing the room’s pricing

is based either on demand or on capacity (Ng, 2008). Capacity-based dynamic pricing

largely depends on the usage of sophisticated optimisation models to constantly

update prices based on future demand forecasting of different segments of customers

(Aziz et al., 2011). As mentioned earlier, this research does not aim to deal with

mathematical approaches in detail as this topic would require an entire literature

review of its own (Ropero, 2011). Hence, general applications of dynamic pricing and

current issues are addressed.

Aziz’s et al. (2011) argues that it is not feasible for a regular dynamic automated

program to set prices for large hotels because of the number of variables involved. For

instance, these are some of the variables that would need to be intertwined in order to

have a continuous dynamic price: twenty-five different rates, more or less seven

different LOS, multiplied by three-hundred-and-sixty-five days. However it could

well work for a SMHs but yet it has not been applied in such a context.

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2.4 Capacity Management

Capacity management is the science of forecasting how much capacity needs to be

reserved for late arrival of high value customers. Revenue managers must then assess

the cost of reserving too few rooms versus the cost of reserving too many for a

specific segment (Bodea & Fergusson, 2014). This guarantees that the hotel inventory

is being used as efficiently as possible and higher revenue is being achieved. It then

implied that a wrong capacity management tactic added with inaccurate overbooking

policies constitutes loss of revenue for the hotel due to unsold units (Legohérel,

Poutier & Fyall, 2013; Pullman & Rodgers, 2009). However, one way of controlling

capacity is to limit the number of rooms that can be sold to a given customer segment

at a given time (Talluri & Van Ryzin, 2005).

During high demand periods when hotels tend to reach maximum capacity, a last

minute cancellation or a no-show could mean loss in revenue. It is argued that having

empty rooms at high demand periods can significantly affect a hotel’s bottom line.

Hence, what can a hotel do to reduce revenue loss due to customer uncertainty

(Legohérel, Poutier & Fyall, 2013; Pullman & Rodgers, 2009)?

2.4.1 Overbook as an Alternative

Overbooking can prevent a hotel from losing room revenue and ancillary sales by

overbooking. Revenue may be lost in the event of cancellations, no shows or

premature checkout (de Oliveira & Ferraz, 2008; Toh & DeKay, 2002). Therefore,

these variables must be forecasted in order to find an optimal overbooking level (Toh

& DeKay, 2002). However, overbooking policies must include the process of

accommodating the guest in another hotel (Karaesmen & van Ryzin, 2004) and the

cost of doing so must be identified. This cost must incorporate intangible costs of

losing the customer’s goodwill and damaging the relationship with the guest (Hwang

& Wen, 2009; Wangenheim & Bayón, 2007; Wang, 2012; Noone & Lee, 2011).

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The Value of Overbooking

Even though overbooking is suggested to be an unfair RM activity (Wangenheim &

Bayón, 2007) there are enough reasons for practicing overbooking. In order to have

the hotel operating at full occupancy during the high demand periods Toh & Dekay

(2002) argue that overbooking is a must because:

(1) The revenue generated from walk-ins or same day reservations do not

overcome the loss from cancellations, no-shows or premature checkouts.

(2) Credit card pre-reservation fees normally covers only the first night or ten

percent of total reservation.

(3) Premature check-outs penalty fees do not cover the rest of unsold nights.

(4) There is an opportunity to have extra revenue with the collected penalty fees

and still sell the same room.

(5) It guarantees the ancillary revenue from other revenue centers.

It is implied though that there is a possibility of not fully applying penalty fees in the

case of a cancellation or no-show if the guest gets irritated with the situation or the

hotel does not wish to lose the customer’s goodwill. Instead, a smaller penalty fee is

charged and the remaining balance is transferred as a credit towards a new booking,

which can weaken slightly the purpose of overbooking (Toh & Dekay, 2002).

2.5 Technology-driven Distribution Channels

Search engines such as Google and Yahoo provide a very favorable environment for

the development of third-party online intermediaries. In terms of channel

management, because of the many different costs per channel, managers should

concentrate time and effort in strategically discovering an effective way to distribute

rooms online. Despite the fact that selling rooms through the hotel’s own channels can

cost less than third parties channels, it is implied that the real challenge is to select the

channels that would really make a difference in the bottom line in terms of

profitability as well as create less conflict (O’Connor, 2003; Myung, Li & Bai, 2009;

Christodoulidou, Brewer, Feinstein & Bai, 2007; Choi & Kimes, 2002).

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2.5.1 Dealing with Online Travel Agencies

It is necessary for revenue managers to understand what is going on when using an

online travel agencies (OTAs) to book a room. Therefore, a phenomenon worth

discussing is the overdependence on OTAs. It is suggested that the level of hotel’s

dependency on OTAs is directly related to the level of sales contributions attributable

to the OTA (Myung et al., 2009). O’Connor (2003) argues that distributing rooms

should follow a rational strategy in terms of pricing. Rooms should be distributed

mainly through the hotel’s own website.

In an attempt to reduce overdependence on OTAs, hotels should offer lower rates

through their own website, as this would increase website traffic, decrease customer’s

motivations to use OTAs and decrease distribution costs (Thakran & Verma, 2013;

O’Connor, 2003; Ling, Dong, Guo & Liang, 2015). However, offering the lowest rate

on the hotel’s own website was not a common distribution strategy according to

Demirciftci, Cobanoglu, Beldona & Cummings (2010).

Toh, Raven & DeKay (2011) identified additional tactics which steered potential

guests to the hotel’s website: customised offers based on the customer data collected,

retention of premium rooms to be sold through the hotel own website, offering

incentives to those who have booked directly on more than one occasion and above

all, make the hotel’s intangible experience as tangible as possible within its website.

2.6 RM in Coastal Hotels

Hotels situated in coastal areas, where leisure tourists are predominant, very much

depend on the sea and sun tourism. Revenue managers from this category are

exposed to a specific management environment in terms of seasonality, infrastructure

and customers’ needs, expectations and motivations (Ekonomou, Neofitou &

Matsiori, 2014; Modica et al., 2009; ENAP, 2009).

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2.6.1 Coastal Hotels’ Guest Segmentation

The literature reviews segmentation as part of RM and refers to the business guests as

being a less sensitive segment in terms of price and with a higher WTP (Verret,

2008). On the other hand leisure tourists are very price sensitive since normally they

are paying for a room with their own money to satisfy their own needs (Hayes &

Miller, 2011). Modica et al. (2009) suggest though it is possible to attract different

segments outside of leisure, for instance business and corporate, conference and

meeting as long as the accessibility between the businesses and the coast is not a big

issue. Modica et al. (2009) also refers to local leisure tourists –people that already live

in a considered coastal area but can still visit a nearby beach - as a segment that

should be investigated further as the authors research could not determine this

segment’s characteristics and WTP.

The destination itself also plays an important role in a guest’s perception of value.

ENAP (2009) and Ekonomou et al. (2014) argue that coastal guests also take into

consideration individual beach features such as:

how organised the beach site is

accessibility

sustainability

hospitality

health services

costs and accommodation facilities

Ekonomou et al. (2014) then identified three types of market segment which are

specific to coastal hotels as follows:

(a) cost sensitive

(b) demanding beach users

(c) accommodation oriented visitors

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Despite the fact that Ekonomou’s et al. (2014) findings were only based in a certain

region of Greece, they were statistically reliable making these segments applicable in

other coastal areas and to serve as the basis for further research.

2.6.2 Willingness-to-Pay for Coastal Hotels

In coastal hotels with high fluctuations related to seasonality, demand based pricing

and quality of service are considered key factors to reach higher levels of occupancy

(Modica et al. 2009). Contrasting these findings, Costa (2013) argues that when

selling a room to a guest that wants to stay in a hotel by the beach, revenue managers

should not only consider the tangible and intangible aspects of the hotel, but the

“outside of the hotel” is significantly as relevant, for instance public areas, beaches,

parks, streets, promenade, etc. In addition to these tangible aspects, intangible aspects

such as how familiar, playful, natural, elitist or reserved the region is, should be

considered when pricing a coastal hotel room. Therefore, these elements all together

have a significant weight on a guest’s WTP but they are invisible and cannot be

quantified.

2.6.3 Pricing Coastal Hotel’s Room

According to Modica et al. (2009) discounted pricing or package offers according to

seasonality are an effective alternative to creating demand from the leisure segment in

coastal hotels. However, Hayes & Miller (2011) state that more importantly than

making efforts to raise occupancy levels, it is important to analyse the inherent

demand of the city as leisure tourists firstly choose the destination and then look for a

hotel. Costa (2013) has identified that revenue managers in hotels located in Ibiza

price their product more based on the accommodation regime and location, and less

based on the intangible elements of the destination or the hotel. It is suggested that

pricing a room with added value through the accommodation regime is a significant

price differentiation strategy to be adopted when hotels in the region offer limited

accommodation regimes (Costa, 2013).

2.7 Conclusion

This literature review had three main goals to:

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(1) support empirical research

(2) discuss main RM activities,

(3) understand the application of RM within the specific context of coastal hotels.

RM can be seen as a double edged sword. On one hand it is seen as a process that

needs very talented revenue managers that use highly sophisticated software that

analyzes complex data in order to forecast and generate solutions in real time. On the

other hand, it can be seen as a regular way to deal with the supply and demand rule,

by understanding seasonality, price elasticity and managing capacity. It is plausible to

affirm that it is a combination of managing supply and demand, aiming to maximise

revenue, based on different customers’ WTP, which could be less time-consuming

and more accurate with the help of software.

It was demonstrated the steps that comprise the RM process and the main RM

activities that are part of each step. These main activities encompass collecting hotel’s

data, forecasting, pricing, managing capacity and distributing rooms.

Pricing is the most researched RM activity so far (Guillet & Mohammed, 2015;

Skugge, 2011). This literature review explained:

(i) the importance of WTP and cost based pricing

(ii) the appliance of differential and dynamic pricing

Capacity management is also considered a core RM activity. It accommodations the

most profitable mix of customers by denying service for the less profitable ones

(Vinod, 2004). As part of this, overbooking allows revenue maximisation by not

losing sales due to cancellations, no-shows or early departures.

In terms of distribution this paper discussed the role of OTAs in terms of online

pricing, their relationship with hotels and the strategy behind choosing the distribution

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channels.

Finally, RM was also discussed from SMH perspective in the context of coastal

hotels. Because of seasonality and the very peculiar type of guests, this hotel category

deserves more attention in order to assess how RM activities are applicable and how

successful they can be.

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CHAPTER THREE: METHODOLOGY

3.1 Introduction

The purpose of this chapter is to explain and defend the methodology of the research

and methods chosen to collect the primary data. In addition, ethical concerns, validity

and limitations are presented.

What is the research question and the respective research objectives?

The research question and the research objectives help to pinpoint the research

variables and indicators that need to be studied (Denscombe, 2012). Therefore, the

following is the research question:

How managers of coastal hotels located in the region of São Sebastião, Brazil are

dealing with revenue management and distribution practices?

Also, the research objectives will guide this research towards its final findings and

here they are:

critically review the literature in the field of hotel distribution, revenue

management and its application in coastal hotels

examine the knowledge that coastal hotel managers from São Sebastião, Brazil

have regarding revenue management practices

examine the main revenue management tactics applied in the hotel industry in

the context of coastal hotels located in São Sebastião, Brazil

examine how rooms are being distributed in coastal hotels in São Sebastião,

Brazil

identify the challenges and opportunities when applying revenue management

and distribution tactics in coastal hotels in São Sebastião, Brazil

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3.2 Secondary Data

Domegan & Fleming (2007) and Saunders & Lewis (2012) explain that secondary

research is the process of collecting existing relevant data that was collected for a

unique purpose.

This research project has investigated academic journals, postgraduate theses, and

textbooks as sources of secondary data. These sources provided this research with

background information to support the collection of the primary data.

Before presenting the research design, the author strongly believes that it is crucial to

have a holistic approach in relation to the field of research methods. According to

Adam & Healy (2000) the philosophical debates on the nature of scientific enquiries

explains the reason why specific methodologies and methods are chosen. The

subsequent paragraphs will explain the philosophy that guided the author’s choice in

relation to the methodology and the methods (Saunders & Lewis, 2012).

3.3 Methodology and Method Justification

3.3.1 Philosophy of this Research: Interpretivist

It is defended by authors, for instance Adam & Healy (2000) and Saunders & Lewis

(2012) that behind the choice of the research design there is a paradigmatic position

that distinguishes researchers between positivists or interpretivists. There are major

differences between a positivist and an interpretivist researcher. The author of this

dissertation has adopted the interpretivist philosophy.

The interpretivist philosophy says that a ‘reality’ must be constructed by a researcher

and the researcher is dependent of the world. This reality is, in a certain way, relative

and specific to a project that takes place in a certain time in a particular place. The

way to do so is to holistically view the results. In this case, the researcher values every

single finding and looks for meanings rather than measurements (Adam & Healy,

2000).

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Exploratory studies have the purpose of discovering new information and insights that

are not yet well understood or very clear to the researcher. This type of study can lead

to the identification of a new phenomenon or to assess topics from a new point of

view (Creswell, 2014). In addition, according to Erickson (2011), qualitative research

narrates the actions of a particular type of people and what these actions actually

mean to themselves and this is what the author wishes to achieve.

In conclusion, as the philosophy adopted is interpretivist, the author has only a few

options in terms of research purpose, methodology and methods. Hence, the author

conducted a study with an exploratory purpose, with a qualitative methodology and

used semi structured interviews as the method to collect the primary data (Jennings,

2005; Creswell, 2014).

3.4 Research Design

3.4.1 Sampling

The sampling process started with the identification of small and medium costal

hotels in the region of São Sebastião. Since the author did not have the list of the total

population, a non-probabilistic sampling strategy and a mix of respective sampling

techniques were used. The sampling techniques used were purposive, self-selection

and snowball (Dawson, 2009; Saunders & Lewis, 2012; Flick, 2015).

With the help of the internet a list of fifty hotels was compiled. Three months prior to

the author’s trip to Brazil, the author sent an email to each hotel explaining the details

of the research project. The author requested that his e-mail be directed to the most

appropriate person in the hotel who could possibly provide relevant information. Out

of fifty emails, three people answered and no specific appointments were made.

As this purposive sampling technique did not have many responses, the other

techniques were used in combination. The self-selection technique was used as the

author drove around the region looking for small and medium hotels, which is a

purposive technique, and when a relevant hotel was identified, the research project

was presented and the most suitable person to participate was identified.

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Therefore, the interview was only held when the appropriate person was present at

that moment. Interestingly, no revenue manager position existed, so the sample

population consisted entirely of general managers and owners, as they identified

themselves as the right person to discuss the themes proposed by the author.

A third technique, the snowball sampling technique was also utilized. The author

asked each participant to recommend a friend or a colleague that could possibly

participate. Four interviews were made possible due to the snowball sampling

technique.

A total of seventeen interviews were conducted. Out of seventeen, two needed to be

excluded because of lack of interest of the interviewee that negatively affected the

quality of the information.

3.4.2 Location of the Interviews

The author conducted interviews in locations that put the interviewees at ease and

ensured they were as comfortable as possible. The author felt this would impact on

the quality of the information collected (Saunders & Lewis, 2012). Therefore, to be

more convenient and comfortable for the interviewee the author decided to conduct

the interviews in each interviewee’s hotel.

3.4.3 Instrument to Collect the Data: Research Protocol

This is a document that was brought to all interviews and it contains a variety of

questions divided by themes pre-established by the author, with some respective

probe words, in order to guide the interview (Creswell, 2014). However, the dynamic

of each interview was slightly different, the order of the themes varied. Not all

questions within each theme were asked and the interviews varied according to how

relevant the question was to each interviewee and the natural flow of the interview

(Saunders & Lewis, 2012). A copy of the research protocol in both languages can be

found in Appendix 1.

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3.4.4 The Collection of the Primary Data

Jennings (2005) defends that in-depth semi-structured interviews are the most

appropriate means of data collection on a qualitative research project. Adam & Healy

(2000), Jennings (2005) and Saunders & Lewis (2012) argue that a field study using

the one-to-one interview method is a plausible decision because it will guarantee the

collection of rich data and provide a deeper understanding of the topic with a relative

small sample.

According to Dawson (2009), a semi-structured interview can be recorded using an

audio recording device. The author used a portable recording device called Zoom to

record all interviews and a clipboard with a printed copy of the research protocol to

take notes.

In terms of budget, the author carefully estimated the total expenses, including return

flights and transfers from Dublin to São Sebastião, accommodation and food, so a

total amount needed was previously identified.

3.4.5 Research Method

Probably the most common type of interviews conducted according to May (2011),

are semi-structured interviews. The author of this research will undertake this type of

interview as they will assist in the gathering of primary research information

(Creswell, 2014). This is a “conversation-like” type of interview that follows a

research protocol.

3.4.6 The Interview Process

The researcher attempted to make an appointment with each interviewee via e-mail

but the response rate was significantly low (See APPENDIX 5). Therefore, the author

looked for hotels without an appointment daily from 9 p.m. to 5 p.m. The interview

process was held during the months of July and August of 2015. These months are

part of the low season (to be explained in the next chapter) and thus facilitated the

recruitment of participants as the hotels were not very busy. The author needed 40

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days to reach seventeen interviews. Each interview lasted an average of sixty minutes

and the travel time between venues was on average forty-five minutes (see Figure 1).

3.5 Analysis

The author started the analysis by deciding that all sessions should be transcribed but

only one would be fully transcribed. A copy of the fully transcribed interview, in both

languages can be found in Appendix 2 and Appendix 3.

Also an identification format of each interview was created. Each interviewee was

identified with the following label: INT (1-15), M or F, A – E (each letter means a

different beach), GM or O (General Manager or Owner). For instance, the first

interviewee was identified as INT1, M, B, GM, meaning that it was a male, general

manager from a hotel located in beach B (see Figure 1).

Four pre-establish themes, relevant to the research objectives, were identified. One

did not have sub-themes and the other three had some sub-themes. Please see the

analysis themes in Appendix 4.

Fourteen interviews were partially transcribed based on these pre-established themes

and relevant quotes from interviewees were distributed under each relevant theme.

The author was the transcriber for all interviews.

The quotes from interviewees were all transcribed in Portuguese and they were

formed with the actual words in Portuguese that were said by both interviewee and

interviewer. As not all quotes were used in the analysis chapter, only the ones utilized

were translated into English. Some wording adaptations or contextualization were

needed when the actual words themselves were impossible to understand or were out

of context due to translation issues.

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Figure 1: Coding of Interviewees

Identity Audio File Name Position Interview Length Interviewer Location Transcription file name Transcriber

INT1, M, A, GM ZOOM0002 General Manager 62min 52sec Author In Situ, São Sebastião Region Analysis ZOOM0002 Author

INT2, M, B, GM ZOOM0003 General Manager 66min 10sec Author In Situ, São Sebastião Region Analysis ZOOM0003 Author

INT3, F, B, GM ZOOM0004 General Manager 44min 19sec Author In Situ, São Sebastião Region Analysis ZOOM0004 Author

INT4, F, A, GM ZOOM0005 General Manager 74min Author In Situ, São Sebastião Region Analysis ZOOM0005 Author

INT5, F, A, O ZOOM0006 Owner 80min 35sec Author In Situ, São Sebastião Region Analysis ZOOM0006 Author

INT6, M, C, GM ZOOM0008 General Manager 40min 35sec Author In Situ, São Sebastião Region Analysis ZOOM0008 Author

INT7, M, D, GM ZOOM0009 General Manager 41min 28sec Author In Situ, São Sebastião Region Analysis ZOOM0009 Author

INT8, M, D, GM ZOOM0010 General Manager 86min 29sec Author In Situ, São Sebastião Region Analysis ZOOM0010 Author

INT9, M, D, GM ZOOM0011 General Manager 53min 57sec Author In Situ, São Sebastião Region Analysis ZOOM0011 Author

INT10, M, B, GM ZOOM0012 General Manager 117min 08sec Author In Situ, São Sebastião Region Analysis ZOOM0012 FULL Author

INT11, F, E, O ZOOM0013 Owner 81min 40sec Author In Situ, São Sebastião Region Analysis ZOOM0013 Author

INT12, M, E, GM ZOOM0014 General Manager 60min 07sec Author In Situ, São Sebastião Region Analysis ZOOM0014 Author

INT13, M, E, O ZOOM0015 Owner 67min 45sec Author In Situ, São Sebastião Region Analysis ZOOM0015 Author

INT14, M, D, O ZOOM0016 Owner 84min 58sec Author In Situ, São Sebastião Region Analysis ZOOM0016 Author

INT15, M, C, O ZOOM0017 Owner 92min 28sec Author In Situ, São Sebastião Region Analysis ZOOM0017 Author

10 Managers Total 17h 33min 30sec

5 Owners Average 1h 10min 18sec Source: the Author

3.6 Ethical Concerns

Amongst the substantial number of authors that defined ethics, it can be simplistically

defined as the concern ‘…with the attempt to formulate codes and principles of moral

behaviour’ (May, 2011, p. 61). The author is very aware of the significant amount of

personal and confidential information that interviewees have provided. Hence, it was

also a major concern of the author to make sure that the participant and the

information were treated with integrity and respect. This means that each interview

was consented, accepted, private, anonymous and confidential.

After the participant was identified, the research project and the objectives were

presented in more detail. Before turning on the recording device, the author carefully

explained that no hotel or interviewees names would be revealed and the data

collected was going to be used only for academic purposes.

Privacy was assured by simply giving the right to the participants to refuse to answer

any question that they did not wish to. No consent letter was signed or recorded. The

author believed that requesting the participants to sign a consent letter, or requiring

the participant to give their consent while the interview was being recorded would

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have been too intimidating and invasive for the participants. This could have led to a

decrease in the number of participants. Therefore, consent was entirely verbal.

In the end of this explanation, the author asked for the authorization to record the

interview. Upon the interviewees’ acceptance in participating and to be recorded, the

recording device was turned on and the interview commenced.

3.7 Validity

In qualitative studies validity is a process of earning confidence of the readers, or

persuading them, according to the way that the purposed arguments are presented and

how well these arguments are underpinned (Kvale & Binkmann, 2009). As previously

mentioned, the secondary research was entirely based on peer-reviewed renowned

scientific journals, credible textbooks and government documents. The selection of

the participants for the primary research was made In situ, which ensured the correct

selection of participants. All interviews were recorded and kept with the author for

security and audit purposes.

3.8 Limitations

The major limitation of this research is the word count restriction imposed by the

academic institution that requested this research project. There was a significant

amount of information collected with great depth, however, the author was limited to

present and discuss only a small portion of the findings.

A second limitation was the size of the region of São Sebastião that impeded certain

generalizations. It is a relatively big region, with a diversity of beaches. However, it

was not a major limitation because some beaches and some managers indeed shared

common characteristics and common managerial skills.

The last limitation relates to language. It is not a very critical limitation given the

fluency of the author on both languages, Portuguese and English. However, it was a

challenge to literally translate from Portuguese to English every single word, phrase,

verb and colloquial expression. So the English quotes presented in this paper are

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based on the author’s cultural knowledge of both languages and it reflects what the

interviewees wished to say instead of what they literally said.

3.9 Conclusion

The purpose of the present study is to conduct an exploratory study to discover the

level of knowledge of hotel managers from São Sebastião, Brazil in relation to the

practices of revenue management and room distribution. To do so, a qualitative study

was conducted and it used semi-structure interviews, with the aid of a protocol, in

order to collect the primary data. The method of analyzing the data was also

accurately designed as themes were used to contextualize the interviewees’ quotes.

There was a clear concern of the author in respect to ethical and validity issues.

Therefore, the author strong believes that this methodology was crucial in order to

indicate an existence of a new phenomenon or to shed a new light to an existent

subject so future research can stem from this one. Now that the methodology is

defended and how the primary research was conducted, the main finding s from the

primary data are presented in the next chapter.

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CHAPTER FOUR: FINDINGS

4.1 Introduction

This chapter presents the findings collected during the fieldwork of this project. All

findings are related to the research objectives. The following findings show the

knowledge and application of revenue management and distribution tactics by GMs

and owners of the region studied as well as opportunities and challenges related to

revenue management. As explained in the previous chapter, the findings are separated

by themes and are supported by quotes extracted from the interviews. All quotes are

individually labelled with a unique code for each participant.

4.2 Revenue Management Awareness

The first relevant finding is that the position of ‘Revenue Manager’ does not exist in

the hotels studied in São Sebastião. As mentioned in the previous chapter, during the

interviews, the author introduced the research project to front desk staff and asked to

be directed to the appropriate person to participate. The author was unable to locate a

revenue manager in any of the hotels which participated in the study.

The main purpose of this theme is to identify the overall revenue manage knowledge

of GMs and owners. The interviews demonstrated that while very few hotel GMs and

owners know about the revenue management concept, some believed they knew it but

in fact they did not know how to explain the theory embedding revenue management.

Some other participants simply confessed that revenue management is a completely

new revenue management for them.

The lack of revenue management knowledge is best represented by a GM ’s statement

who claimed to know what revenue management is but gave a very vague answer,

which was not very related to the job of revenue manager:

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We try to manage the best possible way everything that comes in and goes out.

We are always accounting, always. How can I say? I’m always trying to have

everything right so not to have headaches. (INT1, M, A, GM)

Another example came from the owner of a hotel who confessed that s/he:

Did not know absolutely anything about modern management techniques… so

it is 100% amateur, but it works…’ (INT11, F, E, O)

In conclusion, within the region of São Sebastião, the majority of GMs and owners

did not seem to fully comprehend what revenue management is and how to apply its

tactics.

However, when asked what they were doing to maximize revenue and how to make

the best use of the hotel space in order to generate revenue, they all presented

interesting tactics associated with the concept of revenue management, which will be

discussed in the following paragraphs.

4.3 Seasonality in the Context of Coastal Hotels in the Region of São

Sebastião

Seasonality orchestrated all revenue management and distribution tactics so it is

important to understand the seasonality of the region in detail. All participants argued

that the level of room sales depends largely on the season. The high season has a

higher tourist demand in comparison to the low season. Interestingly revenue

management tactics were found more useful during the low season and during the

high season revenue management tactics were not highly applicable as most of

participants agreed that:

January is our busiest month, when we have the highest rate. We do not need

to work in January because it sells by itself, it doesn´t stop. (INT5, F, A, O)

Seasonality within the region is related to the period of the year, the days of the week,

the calendar of public or religious holidays and the actual weather forecast.

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As the vast majority of tourists are leisure-driven, a high demand is correlated to any

period of the year that businesses in nearby cities like São Paulo are closed.

The high season happens with the Brazilian summer vacation, which starts between

November and December and continues until the end of the carnival holiday, usually

between end of February and beginning of March; the medium season happens during

the months of March and April; and the low season starts in May and finishes in

October. For instance, ‘…March and April are the medium season. June and July the

low season arrives, however July is very volatile…’ (INT14, M, D, O). A GM

described that:

We have business throughout December, January and February. After Carnival

is low season. The low season here is terrible to everybody. There is no

business, low demand… (INT1, M, A, GM).

Weekends have a higher relative to weekdays so:

During the week is a dead space, it’s a space that you can use your creativity

better, because it is better to receive R$100 during the week than nothing. The

revenue maximization would be done with higher occupancy levels during the

week. You must be promotional on weekdays. (INT15, M, C, O)

But the weather forecast also plays an important role in seasonality. Tourists can book

a room on the same day of arrival, if the weather forecast indicates upcoming sunny

days. That means that even during winter the hotels can experience an increase in

demand according to the weather forecast as it was stated that:

Winter with this sun? For those who enjoy a gentle sunbathe, with less people

in the beach and if I manage to find a target that likes this, they are a valuable

target too (INT13, M, E, O)

In summary, the high season happens during the Brazilian summer but throughout the

year, even during the low and medium seasons, public or religious holidays or sunny

weekends are periods that the demand for hotel rooms increases. Thus, revenue

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management tactics used during the low season are not the same ones utilized during

the high season as outlined in the following paragraphs.

4.4 Revenue Management Tactics for Coastal Hotels

It is plausible to divide the revenue management tactics into the ones applicable

during the low and medium season, the ones applicable during the high season, and

the ones applicable in any season.

4.4.1 Revenue Management Tactics for Coastal Hotels during Low and

Medium Seasons

Weddings

Despite the fact the weddings were not originally included in the research protocol, it

was discovered that they are used to maximize revenue during the low and medium

seasons by all hotel GMs and owners. Some reasons for targeting the wedding market

will now be presented.

To demonstrate the importance that weddings have in order to increase the total

revenue of the hotel, one GM explained that the hotel has:

Already had six weddings this year and we already have thirteen booked until

June next year, so it’s more than one wedding per month. (INT10, M, B, GM)

Weddings helped not only to increase occupancy levels of the hotel hosting the

ceremony but also of competitors nearby because part of the wedding invitees are not

able to find rooms in the hosting hotel.

However, it was found that only increasing occupancy does not mean maximizing

revenue. Identifying the actual increase in demand and pricing the rooms accordingly

when a wedding is taking place is vital. When there is a wedding on a beach, all

hotels must be aware of increase in demand and adjust the price of the rooms

accordingly. In order to discover the demand generated by a wedding, hotel GMs and

owners argued that staff should be trained in order to collect general information

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about upcoming weddings. This important piece of information was captured when

couples called or inquired for weddings in person:

... and we know that they enquired with our competitor so we know that

maybe there will be a wedding. What happens when there is a wedding in our

neighbour? [Because of the competitor’s wedding price and physical

structure]. S/he closes the deal for one hundred-and-fifty people, if it only

accommodates thirty and one hundred-and-fifty showed up, there is an excess

of one hundred-and-twenty to be lodged somewhere else. The closest place is

here so obviously we raise the room rate. Thus, when he does weddings we

sell rooms with the January rates, high season (INT10, M, B, GM)

In summary, a combination of:

(a) identifying the level of increase in demand because of a wedding

(b) adapting and offering the hotel’s space to host the ceremony

(c) to adjust the rooms’ rate, even when a wedding ceremony is happening in a

nearby competitor. All these lead to revenue maximization during low and

medium seasons.

4.4.2 Revenue Management Tactics for Low, Medium and High Seasons

The Collection, Interpretation and Usage of Historical Data

A hotel management system called Desbravador that registers the hotels’ historical

data such as cancellations, walk-ins, ADR, RevPAR and occupancy levels was used

by almost all hotels. However, the data collected did not seem to have specific

purposes as explained in the following statement:

We have a system that gives us all this information. We work with

Desbravador. It is a very complete system… as long as it is fed. It gives you

these numbers. We have it since 2008 but it is not something that we use in

our daily operations, to do forecasting (INT5, F, A, O)

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Forecasting

It was identified that the forecasting is done but it is not automated. Also, forecasting

mathematical models were not used. It is suggested that hotel GMs and owner’s

forecasted occupancy based on their own intuition in an ad hoc way. For instance a

participant mentioned that:

Yes, there are public holidays that we have an approximated number of

people, of how many rooms we will sell. (INT1, M, A, GM)

Based on:

(i) rates set for a given future period

(ii) special events that might take place in the region and

(iii) last year’s actual occupancy

The future number of possible guests can be estimated for a particular date. However,

there was no situation where the interviewer was provided with an example of an

exact forecast number. This quote best describes this finding:

I make the probabilities based on our own sales spreadsheet of previous

months. Last year, this same period of the year I sold this much. For this year

my estimation is… (INT14, M, D, O)

Another interesting finding related to forecasting is that GMs and owners can

estimate occupancy based on the actual weather forecast as sunny weekends can

increase demand and rainy weekends can not only decrease demand but also increase

cancellations. But again, these estimations were not very reliable and accuracy was

not checked as it is explained by this hotel owner:

Especially now during winter, it’s complicated because we highly depend on

the weather forecast… Today Wednesday, normally nothing happens during

the low season. Then the weather forecast changes. If sun is forecasted for the

weekend, people start ringing. If the weather forecasted is rain, the telephone

does not ring, the email does not arrive. There are cases that you have a

reservation and then Friday morning the weather forecast is for an entire

weekend of rain. Then you already know that the guest’s mother is going to

get sick, the dog is going to die, the mother-in-law broke a leg (INT5, F, A, O)

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In conclusion, formal and structured forecasting is not done. Instead, GMs and

owners estimate occupancy based on their intuition and experience, and the weather

forecast also helps with these estimations.

Pricing

Before using pricing tactics a few GMs and owners argued that managing the hotel’s

cost structure is extremely important. It is suggested that this is a complex process and

it involves decisions to be made within the hotel operations.

It was discovered that controlling the hotel costs facilitated GMs and owners to apply

a dynamic and/or a differential pricing tactic. The beginning of the pricing process is

to know exactly the hotel’s fixed and variable costs and then to identify the exact cost

of each room. If the cost of each room is not accurately known this is one possible

consequence:

The question is the cost. When I was a front desk manager I did not have the

possibility of reducing costs to sell cheaper and increase occupancy, I couldn’t

do so because we would bankrupt otherwise. If I charged R$330 a room night

we wouldn’t even pay the breakfast. It would give us a loss (INT10, M, B,

GM)

So in order to be able to adjust the price, the GM explained that:

The question is: we have a way better product, what if I manage to adjust my

price closer to theirs? Of course as a front desk manager I couldn’t simply

demand from now on we would sell cheaper. It doesn’t work because it

depends on the other hotel areas, it depends on the operations. But at that time

I had discovered that there was demand indeed, whether it was raining or not.

As soon as I became a GM , we started doing the cost analysis and then I

discovered how much each room costs: a double room, triple, quadruple, how

much the energy costs, how much the breakfast cost, so I end up cutting some

costs and an initial investment was needed for that. Switch a regular bulb for a

led bulb and mainly in the breakfast service, which all together was what was

impeding me of charging a cheaper rate, so that the guest that stayed there [in

the competitor], stayed here. But now I was on the command thus I could

make decisions. (INT10, M, B, GM)

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However, it is also suggested that the majority of GMs and owners did not possess

this managerial skill so the rooms’ rates were not cost based. For instance, it was

mentioned that:

We need to sit down and evaluate how much a room exactly costs for us, until

now we do not have an exact cost. We have an average of what we can work

with, but the actual individual room cost we haven’t yet stopped to think

(INT8, M, D, GM)

Unanimously, hotels consulted each other’s prices during the pricing process. For

instance:

One thing that we also focus on is the competitor’s price. We identify an

average price because we cannot be too much above or too much below

either… (INT4, F, A, GM).

The location of the hotel in relation to the beach and the hotel’s value proposition

were also important criterion to be considered when pricing.

In sum, before pricing a room GMs and owners tend not to know the exact cost of

each individual room but it was demonstrated that without accurately knowing each

room’s cost it is not possible to set a competitive price.

Differential Pricing

Applying differential pricing was based on the specific seasonality that affects the

region.

General managers and owners aimed to maximize the hotel’s total revenue by

increasing occupancy levels during the low and medium season. In order to do so,

they offered discounts or set lower rates. During the high season they charged a

higher rate or offered less or no discounts.

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The rate almost doubled during high seasons as this participant stated that:

The price that we charge during the high season is always higher. It can reach

up to R$480 and today [low season] it is R$290. (INT8, M, D, GM)

A clear example of how prices can fluctuate throughout the year because of

seasonality and location was stated by this hotel owner:

My price is usually ten percent higher than the others. Because of my location,

I work with R$39.90 Sunday to Thursday and R$49.90 Friday and Saturday

during the low season. During the medium season it goes to R$49.90 Sunday

to Thursday and R$59.90 Friday and Saturday, and during the high season,

which is from November to February, it goes up to R$59.90 and R$69.90.

January is like this and I reach around eighty, eighty-five percent occupancy

levels even during weekdays. (INT14, M, D, O)

Other Factors Influencing Pricing

Depending how low the price is, it can attract guests that are not the primary target of

the hotel. To illustrate this situation, this is what a GM stated when asked about

lowering the prices:

Here to increase the flow, or the quantity of people - the occupancy - many

times, there are owners that drop the prices. Consequently they will attract a

type of tourist, or guest that sometimes is not the standard for their hotels.

(INT6, M, C, GM)

Clients that were recognized as loyal or frequent were also offered a different rate.

This is an important guest category as a GM stated that:

We have a very solid database with our frequent guests. They sustain our

annual occupancy level at a minimum of forty percent. (INT 2, M, B, GM).

This category of clients received significant discounts, as explained that:

For guests that are loyal we offer fifty, seventy percent discounts. For guests

that have stayed with us more than three times, we have just launched a

promotion offering fifty percent off for these guests, which means, they spend

the weekend but only pay one room night. (INT5, F, A, O)

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Another way to have guests paying less for a room was related to the method of

payment. When paying in cash or paying the total balance at once through a bank

transfer discounts were also offered. As mentioned by a couple of GMs:

Full payment… if the guest pays all at once, we offer a discount.

(INT8, M, D, GM).

Cash payment... if they make a full payment we offer a ten percent discount.

(INT5, F, A, O)

In summary, GMs and owners think mainly about a combination of four variables to

establish different prices:

(a) seasonality

(b) type of tourist to attract

(c) loyalty status of the guest

(d) method of payment

However, it was also found that one hotel opted to have a static rate throughout the

whole year. The participant explained that:

If we deliver the same service, we cannot have different prices. It is simple

and it is a way that our client find fair, easy to explained. (INT13, M, E, O).

Dynamic Price

General managers and owners also applied dynamic pricing. The closer to the arrival

date the more expensive the room rate was. However, it was identified that dynamic

pricing was applied in an improvised way rather than a forecasted, automated and

disciplined way. That means that the initial price was not very accurately identified

therefore sometimes the inverse happened: the price had to be lowered to generate

demand as this owner explained:

If the date of arrival is close enough and I still have ten rooms left, it is

because it was expensive, so we lower it. If I am left with one room two

months in advance, then I raise it. (INT11, F, E, O)

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One participant explained that the rates were:

Dynamic minute-by-minute. It is reassessed every day, all the time, according

to the information that we have, that we receive, that we look for. There were

occasions that I offered a room for R$500 during the low season, low demand,

and it sold. Sold quickly? Let’s raise the price, and then I offered another one

for R$600. (INT10, M, B, GM)

Concluding, dynamic price seemed to be practiced but in a very informal way. It was

done based on the GMs or owner’s experience, and sometimes the price had to be

decreased rather than increased mainly because of wrongly establishing the initial

price.

Cancellation Policies

All hotels had defined cancellation policies that were slightly different from each

other. Interestingly, the objective of the GMs and owners with the cancellation

policies was not to maximize revenue by collecting the penalty fee and still have the

room available to resell it.

Participants claimed that they did not want to damage the hotel’s reputation when

following cancellation policies. Interestingly, the interviewer also discovered that they

were very flexible with the hotel’s cancellation policies mainly to find a way around

the Brazilian customer protection law.

The Brazilian customer law was mentioned when discussing cancellation policies and

it was explained that it allows customer to regret a purchase in fourteen days forcing

the hotel to fully refund the guest as it is stated by this participant:

… there is the cancellation policy by law and our cancelation policy. By law

guests have fourteen days to cancel it… to regret… so if they make a

reservation only seven days prior the arrival date [and they cancel it], we must

refund them entirely. Our policy is like this. Up to forty-eight hours [before

the arrival date] we offer them a credit but we keep twenty percent, less than

forty-eight hours, which would be twenty-four hours in advance, if we resell

the room, we still offer the credit and retain twenty percent. If we do not resell

the room the guest loses everything. In practice this does not work, by law we

have to refund them. (INT11, F, E, O)

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Therefore, GMs and owners frequently try to be flexible when guests wish to cancel a

reservation. This flexibility was done by offering a credit or even having the room

instantly rebooked. Not surprisingly, the credit had an expiration date and could be

used only during the low and medium seasons. When asked why they are flexible

with the cancellation policies, a participant stated that:

One must be, otherwise it goes to court. It is not worth to hire a lawyer

because of an R$500 law suit. Do you know what I mean? Besides, especially

nowadays, the negative repercussion that it can have. (INT7, M, D, GM)

To sum up cancellation policies existed but GMs and owners did not see it as a way

to maximize revenue by collecting the cancellation fee and resell the room.

4.4.3 Revenue Management Tactics for the High Season

Overbooking

With the exception of one general manger, overbooking was not practiced and it was

seen as a very negative revenue management tactic. This participant was the only

exception:

Overbooking is in my head since last season. I noticed that we had sent a lot of

people to other hotels because we were sold out ages before and there were a

lot of people still looking. The demand was high so I felt like practicing

overbooking. Since then the idea is growing in my head, and it is an idea that I

am thinking for the next season already. I will try to start doing it smoothly.

(INT10, M, B, GM).

In general, overbooking was considered:

Very negative, it is not practiced and we treat it with excess of responsibility.

(INT13, M, E, O).

Nevertheless it has been discovered that with the majority of the participants:

It has happened but we do not practice it. It was a staff mistake, human

mistake. (INT12, M, E, GM)

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Or

It has also happened that the site [booking.com] made a room available. There

were no rooms available, we were sold out and we had let them know that

there was no vacancy. They said it was a system error. (INT4, F, A, GM).

Very interestingly, it was discovered that by accident overbooking has worked in

order to maximize revenue, as explained by this GM that said that:

It has happened that we accidentally had one overbook and somebody else

called and cancelled. Thank God that s/he cancelled because we had one

overbook (INT4, F, A, GM)

To conclude, the word that best described overbooking for the vast majority of

participants is problematic so it was not practiced by any GM or owner.

4.5 Distribution

To make a critical analysis amongst all distribution channels, aiming to identify which

channel generated more revenue and which one was more profitable, is an exercise

that a few GMs and owners had at least tried once but most of them had never done it.

The vast majority concluded that they are very dependent on distributing the rooms

via an OTA, Booking.com being the one most frequently used. The main reasons were

the reliability that OTAs offered and the high cost to distribute and sell rooms via the

hotel’s own website. The following quote from this participant summarizes this

finding:

We have done this analysis and today we cannot leave Booking.com. To leave

it is a shot in the foot. There is the reliability in terms of guests giving their

credit card number to it [OTA] instead of a small little hotel that the guest

doesn’t even know. So Booking.com is more reliable… and to do this via our

own website needs software that’s very expensive. (INT11, F, E, O)

It was argued that is not expensive to distribute rooms via OTAs because:

Booking.com is highly visited; I don’t think it is in our interest to stop doing

business with them, not at all. Thirteen percent per reservation is not

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expensive. It’s a cost that we pay only when we sell, so it’s worth it. Also,

people that visit Booking.com are those who are looking for a place to stay, are

looking for a trip. It is a website specialized in lodging, so it attracts our target.

(INT12, M, E, GM)

The use of OTAs were also related to the seasonality as it was found that:

I do not provide them [Booking.com] rooms to sell in December or January.

(INT8, M, D, GM)

Or even if the hotel provided rooms to be sold during the high season, the commission

was negotiated, as stated by this owner:

The seven percent I pay Booking.com is a minimum commission. If forty

hotels come up in a search, I will be the fortieth. If I raise the commission to

fifteen percent, I will be the thirtieth. If I raise to thirty-five, forty percent I

will be the first or the second on the list. During the high season I only pay

seven percent and during the low season it depends. (INT14, M, D, O)

A few hotels had a relationship with other OTAs rather than Booking.com. Only one

hotel mentioned that the dependence on OTAs is not positive for hotels so he decided

not to work with any OTA, as stated:

I had [a contract] with Hotel.com but I cancelled it. I think that if continues

like this everybody is going to drown. It sets unfair competition amongst all

hotels. When you do a search, it goes for the cheapest. I am competing with a

tiny little hotel that is far away from the beach and contracts a photographer to

upload some wonderful pictures. Then you check-in this hotel and its rooms

are not even half the size of mine, smell mould, far from the beach, horrible

breakfast service, and I am competing with it. What advantage do I have?

None. On top of everything, you receive twenty percent less because you have

to pay their commission plus four percent to the credit card administrator.

(INT15, M, C, O)

In general, both sides, OTAs and hotels, seemed to be satisfied with their relationship.

Booking.com sold enough rooms for the hotels, especially during the low demand

periods, and the hotels were satisfied with the commission paid.

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Their [Booking.com] marketing is very strong. In less than fifteen days they

sold eleven rooms for us. I believe that the hotel by itself would not sell these

eleven rooms [in this period]. (INT8, M, D, GM)

In conclusion, hotels mainly distributed their rooms via one single OTA:

Booking.com. The tactics used were related to the seasonality, as during the high

season the OTA was not very much needed. In general they were satisfied with the

service provided, the revenue generated and the profitability ratio. However, having

an OTA to distribute the hotels’ rooms was also seen as a negative tactic and not

recommended.

4.6 Conclusion

The findings presented were all aligned with the research objectives. They were

presented in different themes and according to the different seasonality situations. It

was shown several revenue management and distribution tactics that GMs and

owners are currently applying in coastal hotels in São Sebastião. Furthermore, within

these findings, opportunities and challenges could also be identified but not yet

labelled as ‘challenges and opportunities’ in this chapter. Therefore, the following

chapter will discuss these findings categorized according to each research objective

specifically. The knowledge of revenue management, the main revenue management

and distribution tactics, the challenges and the opportunities related to revenue

management in São Sebastião will be discussed in relation to the findings of the

secondary research.

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CHAPTER FIVE: DISCUSSION

5.1 Introduction

The objective of this research was to explore the management skills of coastal hotel

general manager and owners with regard to revenue management and room

distribution practices in the region of São Sebastião, Brazil.

The findings presented in the previous chapter have contributed to the understanding

of the different revenue management principles, their challenges and associated

opportunities according to the specific seasonality of the region. Figure 2 provides a

summary of main findings and it is a good starting point to read this chapter.

Figure 2: Summary of Main Findings

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The following paragraphs will compare these findings with the scholars point of view

presented in the literature review. This integration between findings and literature

form the basis to achieve the research objectives and finally answer the research

question. The findings are now discussed and sub-divided by objectives. Objective

one - critically review the relevant literature, which has been completed and presented

in chapter two.

5.2 Objective two - examine the knowledge that coastal hotel

managers from São Sebastião, Brazil with regard to revenue

management practices

5.2.1 Revenue Management Awareness

It is important to set a clear boundary here: one thing is to holistically comprehend the

revenue management concept. Another factor is to apply its principles. A revenue

manager position was not found. This could indicate things but it is most likely that

the revenue management culture has not yet been introduced in the region studied.

With few exceptions, the general managers and owners could not define revenue

management’s theory or explain the main revenue management principles used.

Hence, in the context of this research, the revenue management concept is an

unknown management strategy or a relatively new one.

On the other hand, general managers and owners implemented interesting tactics in

order to maximize the hotel’s total revenue.

This finding is consistent with the literature which states that the basis of revenue

management thinking has existed for a long-time, approximately since eight thousand

years ago (Cross, 1997; Talluri & Van Ryzin, 2005). Moreover Kimes (2000, 2011)

explains the conditions of a business to be eligible to implement revenue management

tactics and hotels present these conditions.

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Because the variables that orchestrated revenue maximization have not changed over

time and revenue management tactics can be applied in any hotel, general managers

and owners from the region indeed applied the appropriate revenue management and

distribution tactics without knowing that they were called ‘revenue management

tactics’.

Some benefits of applying revenue management in coastal SMHs were identified but

not presented because of the limitations explained in chapter three. However, this

finding supports Lee-Ross & Johns (1997) who argued that revenue management can

indeed be effective in SMHs.

5.3 Objective three - examine the main revenue management tactics

applied in the hotel industry in the context of coastal hotels

located in São Sebastião, Brazil

As identified in chapter two, these are the main revenue management tactics and their

respective discussion.

5.3.1 The Collection, Interpretation and Usage of Hotel Historical Data

According to all scholars it was consented that the hotels’ historical data needs to be

collected because it is useful to measure the hotel’s performance, to forecast demand,

cancellations, no-shows, occupancy, and project revenue (Lieberman, 2003; Vinod,

2004; Shy, 2008; Guadix et al., 2010, 2011; Pullman & Rogers, 2010; Kimes, 2011;

Ivanov & Zhechev, 2012; Guillet & Mohammed, 2015; Elbanna, Eid & Kamel,

2015).

This research has discovered that this data was indeed collected and with the help of

an operational system called Desbravador. The purpose of having this data was very

vague. The majority of general managers and owners stated that they had this data but

it was not used for any specific reasons.

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This finding is alarming as it is suggested within the literature that the process of

revenue management starts with collecting this data and finished by measuring the

hotel performance using this data from previous years for comparison and

identification of trends. Not to mention that forecasting and pricing is highly

dependent on the interpretation of this data (Schwartz & Cohen, 2004a).

Therefore, the effectiveness of revenue management tactics is not assessed constantly

and the data collected has practically no importance for general managers and owners

from the region studied.

One assumption is that the interpretation, analysis of this data, as well as the creation

of managerial insights based on this data, can be very time consuming, exhausting and

expensive. It needs the help of specialized software and talented staff in order to

transform this data into managerial decisions as it is suggested by Guillet and

Mohammed (2015). Hotels from that region cannot afford this investment and that is

why the collection of historical data is practically meaningless for general managers

and owners in the region studied. The same situation applies to forecasting.

5.3.2 Forecasting

Forecasting is an important revenue management tactic as it helps GMs and owners to

manage customers’ uncertainties by providing strong quantitative estimations for the

decision-making process (Aghazadeh, 2007).

However, forecasting variables from SMHs is not an easy task (Lee-Ross & Johns,

1997). However, Bodea & Fergusson (2014) state that when general managers and

owners face time, money or employee constraints that impede the exercise of

forecasting, a qualitative forecast could be an alternative.

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This is exactly what was discovered with the present research. General managers and

owners applied qualitative forecasting as they estimated occupancy and projected

revenue by using their own intuition and knowledge of the market acquired through

years of experience.

5.3.3 Pricing

Bodea and Fergusson (2014), Shy (2008) and Ng (2008) state that pricing a hotel

room based on its fixed and variable costs is a very accurate method. It is fair for the

customer. It involves less risk and it is a very straightforward technique.

This research has shown that in fact. General managers and owners from the region

cannot accurately know how much each room costs and this is a major problem that

can impede revenue management pricing tactics to be implemented.

Some authors believe that pricing hotel rooms should mainly be based on the

customers’ WTP. One way to identify the WTP is to study the competitor’s price

(Verret, 2008; Kimes, 2010; Hayes & Miller, 2011; Skugge, 2011).

In fact it is a succession of factors. It is very relevant to consult competitors to find an

optimal price but without exactly knowing each room’s cost, general managers and

owners do not have much room to adjust prices. Or even worse, as one general

manager mentioned, it can result in bankruptcy. The hotel revenue can be maximized

during the low and medium seasons by accurately understanding the cost structure of

each room and cutting unnecessary expenses and costs, which allow general managers

and owners to have a price much more competitive and profitable, and this is the core

role of revenue management.

5.3.4 Differential Pricing

The literature revealed that guests can be charged differently for the same room and

revenue managers find this revenue management tactic an effective way to increase

revenue.

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Depending on the method of payment, loyalty, status, proximity of the arrival date or

refund terms a guest can pay a higher or a lower rate for the same room (Kimes, 2010;

Ng, 2008; Ivanov, 2014; Guillet et al., 2014). However, McMahon-Beattie’s (2011)

argue that customer’s trust could be negatively affected if they find the practice of

differential pricing unfair.

In the region studied prices are mostly fixed according to the day of the week, period

of the year, public or religious holidays, method of payment and loyalty status. There

was no evidence of the same guests paying different prices based on the age, if it is a

family or a couple, if it is a business traveler, if it is a walk-in or even based on the

weather forecast.

The loyalty status of the guest was a reason for applying a lower price in order to

attract this segment during the low and medium season. These guests received

significant benefits including discounts that reached fifty percent.

Despite the fact that authors defend the application of different rates, this research has

revealed that general managers and owners of the region studied sometimes cannot

drop their price too much. They argued that this would attract a different guest

segment that it did not intend to. Therefore, when adjusting down the price, general

managers and owners should know that this tactic can attract a different segment of

guests. This finding is supported by Hayes and Miller (2011) and Legohérel et al.

(2013) who state that different prices can alter the perception of quality of the hotel

and position the hotel in a different category.

However, if the guests themselves understand the relationship between the room price

and guest segment, a hotel can indeed choose to attract only one guest segment during

a defined moment by dropping the price really low. This could increase the occupancy

during a really low demand period and increase the total revenue. In this situation

different guest segments would not meet. Guests from one segment would be able to

identify that because of price; a different segment would be present in the hotel and

therefore choose not to visit. In this case the perception of quality of the hotel would

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not be altered but it would indeed be in a different position. The risks of this

manoeuvre must be assessed though.

5.3.5 Dynamic Pricing

It is argued that in order to dynamically update prices according to changes in buying

patterns and demand a sophisticated optimization model is needed. It highly depends

on future demand forecast of different customer segments (Aziz et al., 2011.

Therefore it is very complex and hard to do it without specialized software.

However, the findings of this research have demonstrated that it is indeed possible to

have a dynamic pricing even with technological restrictions. The only challenge is to

forecast the initial price, which in the region studied, was done informally mostly

based on the general manager or owner’s intuition. If the initial price is not accurate

the dynamic price can go down instead of going up in relation to the arrival date and

that defeats the purpose of revenue management.

5.3.6 Cancellation Policies

Cancellation policies can help the hotel to increase its revenue when refunds are not

offered or cancellation fees are applied, and the room is resold later or instantly

reoccupied due to an overbooking (Kimes, 2000).

However, general managers and owners might opt to not collect the cancellation fee

in order to avoid any conflict with the guest. Instead, the guest receives the amount

paid in the form of credits to be used in a future reservation (Toh & Dekay, 2002).

This is a valid argument but it is important to mention that the conflict between guest

and hotel could go beyond a simple verbal argument. In Brazil, depending on how

long before the guest cancels a reservation; s/he has the right to be fully refunded. If

the hotel does not follow that law, legal action can be taken. Moreover, such a conflict

can damage the hotel’s reputation. The alternative to deal with this issue was to have a

flexible approach when executing the hotel’s cancellation policy. That means

allowing the guest to cancel a reservation but instead of refunding or applying the

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penalty fee, the hotels offered a credit to be used in a future reservation. It would be

very unwise if this credit was allowed to be used during the high season; therefore this

credit can only be used during the low and medium seasons.

Therefore, if there is already a law that forces the hotel to refund guests under a

specific condition, then this is another significant reason to actually apply the

cancellation police strictly. If a Brazilian guest regrets making a reservation after the

fourteen days regret period, hotels should apply one hundred percent of the penalty

fee, which could mean the loss of the entire initial payment or part of it, and therefore

revenue is maximized. By the country’s law, this practice is totally legal. It could

indeed generate bad publicity, but at the end of the day the hotel is in accordance with

the law.

5.3.7 Overbooking

Toh & Dekay, (2002) give several reasons why to apply overbooking. In spite of these

reasons, overbooking was not practiced in the region studied. General managers and

owners demonstrated dread when overbooking was discussed. Nonetheless, it was

identified that accidentally, overbooking had happened at least once or twice with

practically all hotels and in some cases, the overbooking tactic accidentally worked

towards maximizing the hotel’s revenue.

On the other hand, there was an indication that overbooking could start to be applied

within the region as a general manager thought about slowly introducing overbooking

policies in the hotel but had not done so at the time the research was undertaken.

In the region studied, overbooking is seen from the guest’s perspective rather than the

hotel’s perspective. The fear of damaging the hotel reputation, the lack of accuracy

when estimating cancellations and the difficulty in finding reliable partner hotels

impede general managers and owners to practice overbooking.

Overbooking can be an effective tactic to increase revenue and the region is favorable

to do so, but general managers and owners must overcome the above challenges.

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5.4 Objective four - examine how rooms are being distributed in

coastal hotels in São Sebastião, Brazil

Nowadays, hotels are distributing their rooms through a variety of channels, including

OTAs. However, OTAs seem to be dominating the rooms’ distribution mainly

because of the significant sales that are attributed to this channel. Therefore, it has

been argued within scholars that hotels are losing control of their own channels and

creating an over dependence on OTAs. One of the reasons for that is the fact that

general managers and owners fail to critically analyze the profitability of each

channel, including the hotel’s own website (O’Connor, 2003; Myung et al., 2009;

Thakran & Verma, 2013).

This key issue, which can alter the room rate and therefore alter the pricing revenue

management tactics, was identified within the region studied. It was discovered there

was an over dependence on a particular OTA, Booking.com, which had a contract

with all participants except one.

Booking.com dominated the room distribution of hotels from São Sebastião because:

(a) price practiced in the OTA website was higher because of the commission so

general managers and owners had their pricing tactics altered and sometimes,

because of rate parity, their rack rate was altered

(b) there were situations that the guests collected the hotel’s information from the

hotel’s own website but went to Booking.com to make the reservation and that

seemed normal for general managers and owners

(c) many hotel websites had a Booking.com link that directed the guest from the

website straight to the Booking.com booking engine to finish the sale

(d) it was confessed that some guests had asked the reason why the hotel did not

appear in the Booking.com search engine, implying that being in Booking.com

is a must.

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In conclusion, even though Toh, Raven & DeKay (2011) have identified possible

paths to reduce the dependence on OTAs, the existing challenges within the region

studied seem to be extremely difficult to overcome in order to increase direct

bookings and decrease the over dependence on this intermediary. With today’s

accessible online technology this is not a hard task to do and the reasons to invest in

direct bookings are straightforward:

(a) one less variable cost

(b) total control over the hotel’s own price

(c) total control of the guest’s information and buying patterns

5.5 Objective five – identify the challenges and opportunities when

applying revenue management and distribution tactics in coastal

hotels in São Sebastião, Brazil

5.5.1 Challenges

Seasonality in the Context of Coastal Hotels

Dealing with seasonality was found to be the main challenge for hotel general

managers and owners in São Sebastião because of the specific seasonality factors that

altered the demand patterns throughout the year.

Hayes & Miller (2011) argue that lowering the price might not be an effective way to

increase demand if the hotel itself has no inherent demand. In relation to this

argument, the findings relating to seasonality in São Sebastião showed that the region

indeed has inherent demand during the whole year. While in some regions of the

globe during winter the demand for coastal hotels can be almost zero and it could last

for more or less six months. There are winters in São Sebastião that temperatures can

reach thirty degrees Celsius and have blue skies, sunny days, so demand for a beach

break exists whenever.

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The seasonality in the region studied is directly related to the day, week or month of

the year when there is no work or no school in the nearby cities. During the low

season, the seasonality is also related to the weather forecast. It was found that even

during winter a nice weather forecast can increase demand. On the other hand, a bad

weather forecast can decrease demand. Hence the challenge for general managers and

owners is daunting: to apply revenue management and distribution tactics according

to a combination of seasonality factors, including the weather forecast that is not very

predictable.

It was found within the coastal hotel literature that pricing rooms according to

seasonality proved to be a very effective way to generate demand (Modica et al.,

2009). The findings from this research relating to pricing support this argument. But

the challenge here is obvious: an effective revenue management tactic could be ruined

by a forecast of unpredictable bad weather. Guests could lose interest in going to the

beach or cancel a reservation due to rain. This is by far the hardest uncertainty to deal

with being a general manager or an owner of a coastal hotel in São Sebastião.

5.5.2 Opportunities

Weddings – An Opportunity to Increase Revenue During the Low Season

The literature has suggested that guests can be attracted to a hotel because of its

location in relation to the beach. In addition, despite the fact that most guests from

coastal hotels are leisure guest, it is possible to attract other guest’s categories like

business Travelers and corporate customers. Moreover, one of the guest segments

identified within the literature was the demanding beach users, who are guests that are

attracted by the surroundings of the hotel rather than the actual hotel (Modica et al.,

2009; Costa, 2013; Ekonomou et al., 2014).

Hence, it is plausible to argue that a segment of guests could exist that are not solely

leisure motivated, choose a beach before a hotel and prefer hotels that are closer to the

sea. In the case of this study this argument was corroborated with the existence of the

wedding customer segment.

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It is a segment that is not entirely leisure but is not corporate or business either in

terms of price sensitiveness. This has implications when setting prices for this

segment. According to Hayes & Miller (2011) there are different value formulas

depending on who is paying for the room and for whom the room is being booked. In

the case of weddings, it is either the buyer’s money paying for their own service or

someone else’s money paying for the buyer’s service. It was found that general

managers and owners adjusted their prices when a wedding was happening but it was

not clear if the rationale behind the adjustment was related to Hayes & Miller’s (2011)

value formulas.

What it is acceptable however, is that the WTP of a couple that wants to get married

with their ‘feet on the sand’ is higher than a regular leisure tourist, and so is the WTP

of their invitees, which explains charging higher prices.

It is important to mention that weddings are not only an opportunity to increase the

revenue of the hotel hosting the ceremony but also to increase the demand for rooms

of competitors nearby as normally, the hosting hotel cannot accommodate.

In conclusion, despite the fact that the literature did not mention weddings as a

segment for coastal hotels, this research has proved that it not only exists but it

increases the hotel’s revenue significantly by increasing occupancy and demand

during the low and medium seasons. Moreover, one explanation for selling wedding

packages only during the low and medium seasons is possibly because the revenue

generated with regular room sales in the high seasons is significantly higher than

wedding packages but this hypothesis could not be entirely proven.

A Formal Loyalty Program

An opportunity to offer different prices for frequent guests was identified. The

research showed that the way that general managers and owners offered different

prices for their frequent guests was very informal. Therefore, implementing a

structured and formal loyalty program could represent an advantage and could help

hotels to increase revenue.

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For instance, the criterion to flag a guest with loyal status varied amongst hotels.

There was no evidence of an automated loyalty program and some guests were

considered loyal after staying three times, while others after ten stays.

These guests’ names were either simply in the general manager/owner’s memory or

were filtered from the hotel’s main system. The lack of an automated loyalty program

could be explained by the investment needed to do so.

Therefore, a hotel that implements a strong and formal loyalty program has an

opportunity to attract more guests during the low season and offer special packages

during the high season in relation to competitors, which could increase the hotel’s

total revenue.

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CHAPTER SIX: CONCLUSION

6.1 Introduction

Holistically, the author sought to explore the topic of revenue management and its

application within coastal hotels in a developing country. As an object of study, the

author chose to research the SMHs located in the region of São Sebastião, Brazil.

Based on the author’s research objectives several conclusions are now presented.

Finally, a set of recommendations are outlined, the contribution provided by the

literature review is explained and the research question is answered.

6.1.1 Objective one - critically review the literature surrounding revenue

management and room distribution practices within coastal hotels

The literature review has identified how broad an area revenue is. As a result, the

author could not cover all areas related to revenue management. Thus, the main

revenue management subjects and its related activities were critically analyzed in

order to support the collection and analysis of the primary data. The literature

revealed that revenue management can indeed be applied in coastal SHMs but this

specific hotel category has many specific areas that need to be considered.

In general scholars argued that having talented staff and sophisticated mathematical

models facilitate the implementation of revenue management tactics and it can

increase its efficacy. Nonetheless it was also argued that revenue management is the

ability to manage uncertainties, understand the supply and demand relationship,

seasonality and price elasticity. Therefore, technology can indeed help general

managers and owners but the research has shown that it is completely possible to

implement revenue management and distribution tactics with limited technology. The

research has shown that general managers or owner’s intuition based on years of

experience in the hospitality industry is more important than technology.

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Pricing is the revenue management area had the highest number of papers. Scholars

argued that the hospitality industry is one of the most sophisticated industries in terms

of effective pricing techniques. Hence, general managers and owners have plenty of

material to study and find solutions with regard to pricing.

It was concluded that despite the fact that currently hotels can depend too much on

OTAs to distribute their rooms, it is vital to critically analyze which channel makes a

difference in terms of profitability and to then apply distribution tactics accordingly.

6.1.2 Objective two - examine the knowledge that coastal hotels’

managers from São Sebastião, Brazil have regarding revenue

management practices

This research has shown that revenue management is a very broad theme under the

management umbrella. The hotel management variables are practically the same as

the revenue management variables. It was concluded that general managers and

owners do not know the holistic concept of revenue management even though revenue

management tactics are part of their managerial tools. It can be concluded that either

the revenue management concept has not yet been introduced in hospitality courses in

schools in Brazil or, general managers or owners did not follow a formal hospitality

management course.

6.1.3 Objective three – examine the main revenue management tactics

applied in the hotel industry in the context of coastal hotels

located in São Sebastião, Brazil

The vast majority of the coastal hotels within the region of São Sebastião had not

invested significantly in technology but managed to apply important revenue

management and distribution tactics. For instance, dynamic pricing and forecasting

are automated in large hotels but general managers and owners from the region

applied these tactics more based on their intuition and knowledge of the market.

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The purpose of collecting the hotel’s historical data is to feed a system that can

forecast demand and generate dynamic prices according to different demand patterns.

As general managers and owners did not use any specific system for forecasting and

dynamic pricing, the reason for collecting the hotel’s data was very vague.

In terms of pricing, in coastal hotels different periods of the year need different rates.

Loyal customers have benefits which include lower rates, paying in cash or making a

full payment in advance of staying in the hotel. This allows the guest to pay less and

the closer from the arrival date the more expensive the rate is, as long as the initial

price is accurately established in the first place. These are the main conclusions drawn

in respect of revenue management differential pricing tactics within the region

studied.

Very importantly, it was concluded that in order to offer a competitive price the fixed

and variable costs of the hotel must be accurately known.

In terms of cancellations it could be concluded that general managers and owners are

very flexible and normally do not follow policies strictly. The main reason for this is

to avoid legal problems and retain guests. Thus, it did not aim to maximize revenue

although retaining a guest could help the hotel to increase revenue.

It also could be concluded that because of the guest profile – leisure, beach demand

user - overbooking can be a very negative revenue management tactic for the high

season. Relocating such type of guest can be catastrophic for general managers and

owners. Nonetheless, out of all participants only agreed that overbooking in the region

is indeed possible. Therefore, apparently, the region studied is suitable to apply

overbooking but it needs to be tightly structured.

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6.1.4 Objective four – examine how rooms are being distributed in

coastal hotels in São Sebastião, Brazil

Distributing the rooms through Booking.com and mainly during the low and medium

seasons were the general managers and owners main tactics. The conclusion here is

that during the high season the demand is so high that the need for the OTA is really

low. In other words, during the low and medium seasons the bargain power is on the

OTA’s side, and during the high season it is on the hotel’s side. This has implications

in contract terms and commission percentages.

As an overall conclusion, the general managers and owners from the region

considered Booking.com a very reliable partner and did not consider cancelling their

contract. One possible explanation for this fact is that general managers and owners

have not yet identified the opportunity to distribute the rooms through their own

website or they do not believe this tactic will be effective. Investing in search engine

optimization, AdWords, paid advertisements and social media are still seen as

uncertain and less tangible channels. This may be a possible reason why Booking.com

has dominated room distribution in the region studied.

6.1.5 Objective five – identify the challenges and opportunities when

applying revenue management and distribution tactics in coastal

hotels in São Sebastião, Brazil

Challenges

As it is argued within the literature, that revenue management’s main challenge is to

manage (customer) uncertainty. It was concluded that the seasonality has a lower

uncertainty degree but the weather forecast has a high uncertainty degree, making the

application of revenue management tactics very difficult to deal with. This is a major

challenge for general managers and owners of the region studied. However, the

challenge of having a significant low demand period during winter that some

countries face, the region studied does not as demand for the beaches of the region is

constant throughout the year.

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The author also concluded that economic and socio-cultural factors also interfere in

the general managers and owner’s tactics. The country’s economic situation is not

favorable for the development of businesses in general mainly because of high taxes

and low public services and benefits. This has negative implications in strategic

planning and business growth. Public education is quite a distance from the region

and not accessible to everyone. Therefore, finding, training and retaining qualified

employees is challenging. Thirdly, there are a high number of ‘life style’

entrepreneurs who do not run the hotel very professionally. This challenge has

implications in terms of growth because:

(a) they are not very interested in making huge profits, so revenue management

tactics do not make much sense to them

(b) profits are not invested locally

Because of the concentration of many hotels within one beach, it is vital that all

hoteliers ‘speak the same language’ or ‘are on the same page’. In other words, it is not

positive if Hotel A makes huge efforts to maximize revenue but Hotel B, which is a

nearby competitor, does not intend to maximize revenue.

Opportunities

It was concluded that hotels within the region studied have identified the wedding

niche as a great opportunity to increase hotel revenue during the low and medium

seasons only. The research has indicated that this opportunity seems to be new and

there is plenty of time to investigate it. The reason why this opportunity is significant

for the hotel is:

(a) the hotel can rent its common areas

(b) it can reach full occupancy during the wedding

(c) it can increase the demand for rooms and benefit nearby competitors.

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It could also be inferred that even though weddings are a good niche to attract during

the low and medium seasons, the regular room revenue generated during the high

season is higher and therefore general managers and owners do not target weddings

during the high season.

The lack of a formal loyalty programme not only within the hotels studied but also

within a beach is also an opportunity identified by the author. The hotel itself by

having its own loyalty programme could create an opportunity to have a

differentiation point in relation to its competitors. Furthermore, since the region of

São Sebastião is composed by several beaches with distinct characteristics, hotels

from one beach could form a group and develop a loyalty programme for the beach.

This is a great opportunity to make guests loyal to the beach so during the whole year

all hotels from a specific beach can beneficiate.

Another opportunity is related to education. As it was identified that the majority of

the participants did not have a formal education in hospitality management and skilled

labour is scarce, having a bachelor, master’s degree or a certificate in hospitality

management is an opportunity. Therefore, to open a ‘Coastal Hotel School and

Training Centre’ in the region would be a great opportunity.

There is a significant opportunity for other OTAs to gain market share in the

competitive arena, as long as they cater their products to the specific region of São

Sebastião. This dissertation offers good insights on how to undertake this. Moreover,

consultant groups such as Bookassist.org that help hotels to directly sell their rooms

have a great opportunity in the region to sell such services. It was identified that there

is no such service within the region and there is a lack of knowledge of how to

effectively invest in direct bookings.

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6.2 Recommendations

This research has contributed to the general understanding of how to apply revenue

management and distribution tactics in coastal hotels and the specific challenges and

opportunities associated with the region under research. Nonetheless there is plenty of

room for improvement and this is the purpose of the author’s recommendations.

Therefore the author recommends that:

Exactly the same research scope should be conducted with other coastal hotels,

preferably in countries in the south hemisphere. This would facilitate

comparison of findings and generate discussions in order to establish

generalizations, especially in relation to seasonality.

General managers and owners from São Sebastião should be more integrated

in order to promote the exchange of revenue management knowledge and

facilitate a beach loyalty programme.

Therefore, it is recommended that an extension of this study be completed

focusing on the potential benefits of revenue management applied in coastal

hotels in a developing country.

Research should be undertaken to identify alternatives rate fences for low

demand periods. For instance, special rate conditions for days with a bad

weather forecast. Rates with unlimited amendments or non refundable could

help decrease the problems associated with the weather uncertainty.

General managers and owners must accurately identify the hotel’s fixed and

variable costs of the hotel if this has not been undertaken to date.

Strategic investments in technology aiming to reduce variable costs of

distribution should be completed.

Seeking help from a consultant group specialized in hotel distribution would

be recommended.

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6.3 Statement of Contribution to the Literature

This research has provided valuable insights into the field of revenue management,

which added knowledge of what had been researched to date. Previous research

addressed all the revenue management core activities applied in hotels as

demonstrated by Ivanov & Zhechev (2012) and Guillet & Mohammed (2015).

However, it is argued that most revenue management research is concentrated in Asia,

Europe and North America, and the majority of the studies followed a quantitative

methodology. This study contributes to the existing research on revenue management

as it analyzes the application of revenue management and distribution tactics from a

different perspective: a qualitative methodology applied in coastal hotels in São

Sebastião, Brazil. The author believes that studying revenue management in hotels in

a developing country with a qualitative methodology has a major contribution as it

offers scholars interesting insights for further research and it offers valuable

recommendations for hoteliers, especially those running a coastal hotel in a

developing country.

6.4 Overall Conclusion

Finally, the author wishes to conclude this dissertation directly by answering its

research question, which is: How managers of coastal hotels located in the region of

São Sebastião, Brazil, are dealing with revenue management and distribution

practices?

Given the overall challenges that the country has in general, hotel general managers

and owners in São Sebatião are dealing with revenue management and distribution

tactics in an informal way, without the aid of much technology. Despite the fact that

general managers and owners in general lacked the conceptual theory behind revenue

management, all of them collected and stored the hotel’s historical data, most of them

applied differential pricing and some of them applied dynamic pricing. However,

overbooking and forecasting, two very important revenue management tactics, were

not part of their managerial agenda. There are some significant opportunities for

general managers and owners to maximize revenue as presented in the previous

chapters. In spite of identifying the benefits of revenue management and distribution

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tactics this was not an objective of this dissertation, the author established indicators

that the hotels that had a minimum level of revenue management culture had a

significant increase in occupancy and significantly increased their total revenue.

However, this indication is solely a hypothesis identified by the author and it must be

empirically studied in order to have academic value.

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APPENDIX 1 – RESEARCH PROTOCOL IN ENGLISH AND PORTUGUESE

In English

HOSPITALITY MANAGEMENT THESIS

An Exploratory Individual Interview with Beach Hotels General Managers and

Owners

São Sebastião, North Shore of Sao Paulo State, Brazil

Interviews to be held from 1st of July to 31

st of August, 2015

Protocol

Interviewer: Mario T. Roma Momma

Client: College of Arts and Tourism, Dublin Institute of Technology

Present: 1 MSc in Hospitality Management Student interviewer

1. Introduction

a. Self Intro;

b. Reassurance of confidentiality;

c. Purpose;

i. refer to the need of research and write a dissertation in order to

graduate, and the personal interest in seek of management gaps

in the industry;

ii. to identify if general managers are using revenue management

techniques ;

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iii. to explore how general managers are distributing their rooms

nowadays;

iv. explain desire to speak with general managers who also may be

interested in solving existing problems in terms of revenue and

distribution;

v. give the opportunity for the interviewed to introduce themselves

and their hotel.

2. CONCEPT and PRACTISES of Revenue Managements

a. Are you familiar with the term Revenue Management?

i. Yes – Could you please explain to me what it is, which hotel

areas are involved, your own experiences?

ii. No – Explain Revenue management briefly and ask if now

he/she is familiar and ask for own experiences.

b. Do you invest time looking for ways to maximize your revenue?

i. Yes - How much? Could you please detail how you do it?

(Probe for Revenue Management, Capacity Management, Based on historical data,

based on previous experience, routine, most important, less important)

3. OCCUPANCY

a. How do you do to try to maximize occupancy?

b. Do you keep track of no shows, cancellations and walk-ins?

i. Yes – Could you please describe your way of doing it?

ii. No – Is there a specific reason why you don’t do it?

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iii. Do you think this is important for your hotel? Why?

c. Do you forecast demand using historical data?

i. Yes – How often is it done? Do you check accuracy?

ii. No – Is there a specific reason why you don’t do it?

iii. Do you think this is important for your hotel? Why?

d. Have you ever needed to overbook?

i. Yes – on what basis did you decide to overbook?

ii. Are your employees trained to deal with it?

iii. Do you think having an overbooking policy would be positive

or negative for your hotel? Why?

e. How do you deal with cancellations?

i. Do your customers have to make a deposit to confirm the

reservation? Is this deposit refundable?

(Probe for competition, less customers, cancelation policy, historical data, booking

curve, training needs, customer reaction, days before arrival)

PRICING

f. In general, could you please comment on how you set your prices?

i. Who decides the prices?

ii. Do you have differential pricing strategy? For example, people

paying different prices for the same room?

iii. What do you think about differential pricing?

iv. What do you think about your customer’s perception? Would it

be positive, negative or neutral?

g. Do you segment your customers?

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i. Yes – can you comment on how do you do it?

ii. No – Is there a specific reason why you don’t do it?

iii. Does someone, other than the one responsible for pricing, have

the authority to decide on changing prices according to

segmentation? When is that allowed?

h. Do you have a standard procedure when a customer asks a price?

Could you comment please?

i. Could you comment on what to do in low season periods in terms of

pricing, promotions? Do you consider different strategies for those

periods?

(Probe for tourist, repeat customer, seasonality, demand, competitors, standard rates)

4. IMPLEMENTATION and TECHNOLOGY

a. Do you have a computer system for reservations?

i. Yes – do you mind saying its name? Do you use it strategically?

ii. No – Are you aware of them? What is your opinion about

implementing this in your hotel?

b. Do you use a computer system for profit maximization?

i. Yes – do you mind saying its name? Could you comment on

what you think about it?

ii. No – Are you aware of them? What is your opinion about

implementing this in your hotel?

c. What about your employees?

i. Do you think they understand Revenue Management?

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ii. Do you think they would understand and get involved or do you

think it’s only your responsibility?

iii. Would you stimulate, incentivize or provide them with training

to do so?

d. What do you think about having a customer database?

i. Could you comment on your experience with it?

(Probe for GDS, Fidelio, Sabre, Galileo, not necessary, too expensive, never thought

about it, customer relationship management)

5. DISTRIBUTION

a. Are you satisfied with your online strategy? Social Media, own

website?

i. Yes – Could you comment why?

ii. No – What would you do different? What are your reasons for

not utilizing these? Could you please explain in detail how your

website can be improved?

b. Attracting customers to your website: do you see it as an opportunity or

a threat?

i. Could you please comment on what you think about this

channel?

ii. How do you think you can improve the number of bookings on

your own website?

c. Do you use social media do advertise, promote or sell your rooms?

i. Could you please comment on what you think about this

channel?

d. What do you think about mobile phone apps?

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i. Do you have a mobile friendly website or an app? Could you

detail your answer please?

ii. What do you think about being available on other devices?

e. Do you strategically analyze your distribution in terms of main

channels and their related costs?

i. Do you have a specific reason for choosing one channel over

another? Could you please comment on that?

ii. Do you use all the tools offered by OTAs?

iii. Would you change the way your rooms are being distributed?

Could you please detail your answer?

iv. What is your opinion about OTAs?

(Probe for Facebook, reservation by phone, booking engine, pay per click, mobile

app, Google)

6. General Analysis

a. In general, how satisfied are you with the way the hotel is being run,

promoted and distributed?

b. Could you comment what do you think is important for customers

when deciding to book a hotel?

c. Is there any need to change the way things are being done? Could you

detail your answer please?

(Probe for price, previous experience, very satisfied, unsatisfied, attract more

customer, low season)

In Portuguese

1. CONCEITO e APLICAÇÕES de Gerenciamento de Receita (Revenue

Management)

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a. O termo Gerenciamento de Receita (Revenue Management em Inglês)

é familiar para o Sr. (a)?

i. Sim – O Sr. (a) poderia explicar-me o que é, quais as áreas do

hotel estão envolvidos, suas próprias experiências?

ii. Não – Explicar brevemente e perguntar se agora o termo é

familiar e pedir próprias experiências

b. O Sr. (a) investe tempo procurando maneiras de maximizar sua receita?

i. Sim - Quanto? Poderia, por favor detalhar como você faz isso?

(Sondar por Revenue Management, Gerenciamento da Capacidade, com base em

dados históricos, com base na experiência anterior, de rotina, o mais importante,

menos importante)

2. OCUPAÇÃO

a. Como o Sr. (a) faz para tentar maximizar a ocupação?

b. O Sr. (a) mantém um controle de “no-shows”, cancelamentos e “walk-

ins”?

i. Sim - Poderia descrever a sua maneira de fazê-lo?

ii. Não - Existe uma razão específica para não fazê-lo?

iii. O Sr. (a) acha que isso é importante para o seu hotel? Por quê?

c. O Sr.(a) faz “forecasts” baseado em dados históricos do hotel?

i. Sim – Qual a periodicidade? O Sr. (a) checa a precisão?

ii. Não – existe alguma razão específica por não fazê-lo?

iii. O Sr. (a) acha isso importante para o seu Hotel?

d. Ja foi necessário praticar overbooking?

i. Sim – baseado em que o Sr. (a) praticou overbooking?

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ii. O seus funcionários estão treinados para lidar com essa

situação?

iii. O Sr. (a) acha positivo ou negativo praticar overbooking para o

seu Hotel?

e. Como o Sr. (a) lida com cancelamentos?

i. Poderia por gentileza comentar a sua política para

cancelamentos?

(Sondar por concorrência, menos clientes, condições de cancelamento, dados

históricos, curva de reserva, as necessidades de formação, a reação do cliente, dias

antes da chegada)

PREÇO

f. No geral, poderia por gentileza comentar como o Sr. (a) determina os

preços?

i. O Sr. (a) aplica alguma estratégia de preço diferencial? Por

exemplo clientes pagando preços diferentes pelo mesmo

quarto?

ii. O que o Sr. (a) pensa a respeito de preço diferencial?

iii. Qual a percepção dos seus clientes quanto à estratégia de preço

diferencial? O Sr. (a) acha que seria positivo, negative ou

neutral?

g. Sobre segmentação, o Sr. (a) poderia comentar como isso é feito?

i. Se não é feito segmentação, teria algum motive específico?

ii. Os seus funcionários estão autorizados a aplicar preços

diferentes para segmentos diferentes? Por favor comente.

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h. Poderia por gentileza comentar como o Sr. (a) lida com os preços nos

períodos de pouco movimento?

(Sondar por cliente fiel, sazonalidade, demanda, concorrência, tabela de preços)

3. IMPLEMENTAÇÃO e TECNOLOGIA

a. O Sr. (a) possui um sistema de reservas computadorizado?

i. Sim – se não se importar, qual seria?

b. O Sr. (a) possui um sistema computadorizado de gerenciamento de

receita?

i. Sim – se não se importar, qual seria?

ii. O sistema oferece relatórios estratégicos? Comente por favor?

iii. Ele esta integrado com o seu sistema de reservas?

iv. Não - O Sr. (a) conhece algum? Ex. Micros Fidelios, Rate

Wise, Ideas, Easy RMS, Amadeus. Qual a sua opinião em

implementar um desses sistemas no seu hotel?

c. Referente aos seus funcionários, o Sr. (a) acredita que eles entenderiam

e se envolveriam na maximização de receita? Ou o Sr. (a) acha que é

somente sua responsabilidade?

i. O Sr. (a) promoveria algum tipo de incentive ou mesmo

treinamento para eles trabalharem também a maximização de

receita?

d. O que o Sr. (a) acha sobre ter uma base de dados dos seus clientes?

Poderia por gentileza comentar a sua experiência?

(Sondar por GDS, Fidelio, Sabre, Galileo, não é necessário, muito caro, nunca

pensei sobre isso, programas de relacionamento)

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4. DISTRIBUIÇÃO

a. O Sr. (a) esta satisfeito com a sua estratégia online, por exemplo midia

social, o seu website?

i. Sim ou não – por gentileza poderia comentar? O que é bom, o

que poderia mudar?

ii. Atrair clientes e vender quartos no seu próprio website: o Sr. (a)

acha uma oportunidade ou ameaça? Poderia comentar por

gentileza o que o Sr. (a) acha desse canal, o que poderia

melhorar?

b. O Sr. (a) usa media social para promover ou vender seus quartos?

i. O que acha desse canal?

c. Qual a sua opinião sobre aplicativos para celular?

i. O Sr. (a) possui um site mobile friendly ?

ii. O que acha de estar disponível em outros aparelhos tipo Ipad,

relógio, óculos?

d. O Sr. (a) analisa estrategicamente seus canais de distribuição e custos

relacionados?

i. O Sr. (a) possui um gerenciador de canal por exemplo

Siteminder, Rate Tiger?

ii. Poderia comentar como o Sr. (a) escolhe os canais de

distribuição?

iii. Qual a sua opinião sobre canais de distribuição online?

(Sondar por facebook, reservas por telephone, sistema de resrvas, pay-per-click,

aplicativo de cellular, google)

5. ANALISE GERAL

a. No geral quão satisfeito o Sr. (a) está com relação a maneira que o seu

Hotel esta sendo gerenciado, promovido e distribuído?

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b. Poderia por gentileza comentar o que o Sr. (a) acha importante para os

clientes quando eles vão escolher um hotel?

c. Teria alguma coisa que gostaria de comentar? Alguma coisa que

gostaria de mudar por exemplo?

(Sondar por preço, localização, experiências anteriores, muito satisfeito, insatisfeito,

atração de mais clientes, baixa temporada).

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APPENDIX 2 – FULLY TRANSCRIBED INTERVIEW IN ENGLISH

INT10, M, B, GM

Interviewer: In the subject of Revenue Management, which hotel areas it

encompasses do you think ?What techniques do you use to maximize your revenue?

Do you have some sort of experience trying to increase occupation, revenue?

Interviewee: Actually this is very interesting because I am doing it in practice,

because I took over the Hotel one year ago. And there is also the question of the

seasonality. I personally deeply believe that the low season does not exist for us.

Independently, for me this is a culture that we preferred to work with. I am coming

from a meeting in the tourism office and it is something complicated, but have you

known the region for a long time?

Interviewer: The North Shore or Juquehy?

Interviewee: The North Shore.

Interviewer: Yes, for quite a long time.

Interviewee: So you are aware that this is not the city of Juquehy is a beach, which is

a neighborhood of São Sebastião. The beach [city] is São Sebastião, but it is already

part of our culture, you don´t say ‘I am in São Sebastião’. ‘I am in Juquehy, Maresias,

I am in Cambury’. And they want to change this culture, because they want to sell the

beach, sorry the city, the region as a whole. All right, they are not wrong thinking

about this. The question is that we are already inserted in a culture that is going to be

difficult to change right now. Of course this is a tool that in the long run will maybe

start to join together. The point is that firstly we are in a difficult year [economically?]

Yeah! But disregarding that, other years were also difficult. In terms of demand, of

actually having sales conversion during the off-season and mid-week. We did not

have much. I can even show you here in the system, which is interesting because it

will be an introduction for us to get to the point you want. To give you an idea we

were the only hotel on the north shore that was full 100% from August last year to

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April this year. We consider a [high] season from January. January and February we

get 100% occupancy. And we full since August, which are 8 months. [Passing the low

season?] So that's what I'm talking about, it was [high] season for us in terms of

occupation. It is obvious that the room rate was not the same that we charge in

January. We charge a price in January and another one in August. This is our

midweek [showing the computer screen], after this weekend. Here is empty because

we are closing down to refurnish the hotel. This is our mid-week, and our midweek is

practically the same all the time. We have an occupancy of 70% in the midweek.

Interviewer: And you are managing to maximize revenue in this period? Are

managing to get the most out of it because, only the occupation okay it is fine but, the

price for example is being worked dynamically?

Interviewee: That's what I said, it is an introduction to reach the point where you

wanted reach. What happens? I took the hotel 1 year ago. I used to work at the front

desk, I had the reception chief role. I used to leave here the Hotel and used to see that

that each hotel had one car, two cars parked. Thinking that they were guests in the

hotels. There were 2, 4, 6, 8 15, 18 and I thought 'Wow, so there are people, the

demand exists but why these people is not here [in his hotel]? It is obvious that the

others are cheaper that’s why they went there. The point is that we had a much better

product. What if I can get a price closer to theirs? Of course it wouldn´t work if

myself, front desk chief, simply said 'now we sell cheaper'. It does not work like this

because it depends on other sectors, it depends on the operating. But I've found that

the demand existed, whether it was raining or not. As soon as I became a general

manager we did a cost projection and then I found out how much it cost each room,

how much it costs a double, a triple, a quadruple, the energy costs, how much the

breakfast cost and I ended up doing some cuts. It demanded me an initial investment.

I replaced regular bulbs with LED ones, especially the breakfast, which was impeding

me to make a cheaper rate, so that guest that was there stayed here. But now I was in

charge so I could decide. My breakfast during the week is completely different from

the weekend. What happens? We are five hotels standing on the sand, a competition

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among 5 hotels, but with these strategies I extended the competition range in the

midweek. So during the week I do not have competitors foot in the sand, my

competitors are others. The cost benefit is that s/he will pay 50, 100 more to stay here.

Many people criticize 'but then you're bringing another public' Indeed, but I am

bringing another target, which is that guest that would not stay here with the normal

rate. It's the guest who says like 'If I invest 50, 100 more a day, I can stay at HOTEL

X' It is not the guest that says ‘I do not have 50, 100 more to get it’. So my

competition increased significantly. The guy who had been frequent in another hotel

nearby for 5 years turned our guest. The most interesting, which is crazy, from the

moment I took the hotel I cut all advertising costs, all you can imagine. Internet

guides, printed guides, publications, took out everything. We spent a year 22, 23K,

which is little. Interestingly, the hotel has never been so visualized after the cuts I

made. My guests that come during the week used to be in a hotel there. They have a

circle of five friends In Facebook. On one occasion, they found us through

Booking.com and saw that are rate was not too bad at all and then they called here and

found out that there was even 10% discount if paid through bank wire transfer booked

here and did not tell their friends. He arrived and before they filled the check in form

he was already taking pictures. It is a different target, the guest wanted to show off.

So who is making my advertising is now the guest himself by sharing. First I cut

advertising costs and second cut costs from breakfast. The amazing thing is that when

I have breakfast complaint is not during the week is during the weekend. My rate

varies from 490 the simplest room in the low season to 790, during weekends. For

mid-week it drops. From 330 to 450. It is the BEACH B price. It's 50, 60 more

expensive than the others. Thanks to the primarily cost reduction, which was the first

thing we did. When I took over we had a waste of approximately 2kg of fruit and 3

bags of bread, today there is no waste. We restructured operational, everyone here had

to re-learn how to think. As soon as I took over I called a meeting with everyone, and

I depend solely on them for all of this, and said 'Now it is going to be like this, this is

the way. Whoever is in, is in, whoever does not want do adapt to this new stage tell

me that we make a deal' Only two employees left, they did not want to think

differently. Back to the point, cost reduction was the main tactic that made offer a

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cheaper rate for the guest, so I could offer the person who was staying with the other a

better value here.

Interviewer: This was 1 year ago right? What about now? Because the guests comes

and has an experience, hers/his perception of value doubles. Do you think you have

room to increase the price in relation with the proximity of the arrival date?

Interviewee: "It comes from a restructuring the operations. First, we have some tools,

it was not easy to implement them though but, I have at the front desk today, people

who have appropriate selling and marketing techniques, marketing. For example if the

person doing the reservation now for November during midweek the price is one. As

it gets closer [to the arrival date] we check the occupation and the price increases, and

the same happens every weekend... For example we also do weddings, actually we do

not do marriage, we offer space for it to be done, and I base myself totally with my

competitor, by the attitudes he has ... to be very technical, to arrive to the point: we

charged 37mil from Friday to Sunday to close the hotel for weddings and he charges

39, and he does more weddings than we do, actually used to. 'But it is more

expensive? "… The clients arrived and discovered that here you need to cover, just

look at the picture of the hotel ... in HOTEL Z (direct competitor) you enter the hotel

there is a big hall, a restaurant, so depending if it is 100, 150 people do not need to

cover. To cover is expensive, if you cover all areas of my hotel it is 26,000 so here a

wedding used to cost 37 plus 26, and there was 39. So when I became a GM I

convinced the owners to decrease the value. We decreased to 29,000. Problem

solved? No, that is 29 plus 26, although here is still more expensive than there we do

more weddings than them ... It makes no sense! It doesn´t when we do not know the

location, profile. The niche has changed. That guy who has 100, 150, 200 people

wedding, end up doing it there because he makes little or no cover. We found the

market of that person if the wedding is not here, it won’t be on the beach. Then the

price decreases. So if the wedding is for 60, 70, 80 people it can be done here without

covering the place and then it will actually be a reduction to 29,000 and not 39

thousand that he would pay there [in the competitor]. Now we've had six weddings

this year and we already have 13 more by June next year, more than one wedding per

month. Why do we do this? Because of his strategy [competitor] or lack of it. They

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[competitor] have a very conservative policy, and they do not inform you nothing. If

you send an email to him 'I want to do my wedding there' he answers 'then come here,

sit here and we will tell you everything I say if you come here' Then the publicity that

I do not do, who does it is. 90% of marriages that we close here, the person came here

to talk to him, and then as it was really nearby, the person also came here to quote.

And those are exactly the ones that is targeting a wedding for 50, 60 people. Because

here the person already knows that is 29,000. Here we explain everything, reveals

everything, so the person only comes to meet the space. If one day he change his

strategy we will have to change ours here as well. It's basically what happens with

normal rate. Now that we are doing many marriages because of this strategy so I pray

for do even more marriages? No! I wanted to actually not do any marriages. Every

time they do marriages, and we discover that because we talk the person when a

person comes here and asks for a marriage to such date. I depend on the reception

staff to collect all information. We know that the person has been researching the

competitor and so we already know that perhaps there will have a wedding. What

happens when you have a wedding in our neighbor? Here we lodge 40 people, and

they lodge 30, and a marriage is for at least 50 people. The person who invites 50

people does it here, because here is 29 and there 39. Therefore they [competitor] do a

wedding for 150 people, if they only lodge 30 and 150 people turn up, there is 120

people to stay elsewhere. The nearest hotel is here, then it is obvious that we increase

our rate. So when they [competitor] do marriages we sell room with the price of

January, high season. Of course I can´t do all of this alone, I cannot manage it, so I

have to share information, to train the reception staff.

Interviewer: This is a subject we will talk about. Without training, involvement, and a

[RM] culture of front desk staff and sales, only one person aiming to maximize

[revenue] does not work.

Interviewee: They have to understand the strategy. I love to teach so I do not bother to

stay until 11 pm talking to them [staff], so sometimes I talk to them individually,

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sometimes it is possible to talk with 2, 3 people. It is more like when I have spare

time. Now we will have a lot of meetings because the hotel will be closed.

Interviewer: And your customer, your guest, what do you think they appreciate when

choosing among the hotels in BEACH B? Price, tranquility, comfort, ‘feet on the

sand’?

Interviewee: I think we're evolving to a period, to a generation of collaboration,

sharing. Nowadays everyone is able to know everything. Everything is public domain

and public interest. Thinking about this, I gave up the individual ways of sharing. Will

I generate content? No. My guests will generate content for me. I realized that 60% of

all the people we talked and we registered, they stayed with us because of the good

rating and the word of mouth of others: Booking[.com], TripAdvisor, and

recommendations. This is my basis. It's hard to tell what my guests want because even

them don´t know what they want. We do not know what we want. Unfortunately we

are in a period that the people want everything s/he is entitled for. For example, the

weekend breakfast receives complaints in terms of lack of variety and when you ask

variety of what one cannot tell. You do not know what you want, then say what my

guest wants is terrible, I can´t.

Interviewer: Let's talk about cancellation? About this theme I would like to know the

hotel’s policies, and how it is practiced. It is strictly practiced or you are flexible? Is

the cancellation used as a device for future sales?

Interviewee: I will tell you what happened and this is real. As I said our pricing is

dynamic, it has to be so we feel the market, feel, the conversion, the demand,

everything, and of course the supply, we do research all the time. This weekend for

example, we have 13 rooms, we sold 17, 4 extra because there were two cancellations

each reservation was for two rooms. We had the cancellation, we cancelled them and

re-sold the rooms. Our neighbor, HOTEL Z does not have 50% occupation, they do

not have 7 rooms occupied, and HOTEL Y, which is one of the best here, which is

also our competitor still have to sell 4 rooms.

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Interviewer: And you all share information about your hotel among each other?

Interviewee: Formerly it was not like that, but I think that this culture is changing, not

the owners, they do not like this, but among us internally. The HOTEL Y receptionist

receives our call 4, 5 times per day. What for? To offer. I ask 'you still have

availability? I am sold out’. ‘Ow we still have 4 rooms’. Then if someone calls us we

recommend HOTEL Y. So they receive this call, this contact, 4, 5 times a day so we

offer them our clients. Thus, there is no harm in getting some extra information. It's a

type of share that we do and that…

Interviewer: Back to cancellations…

Interviewee: Let’s go, New Year Holidays. I sold the New Year Holidays but I still

had 3 rooms. And we also sold Christmas very well, also because of strategy as before

we did not even have analytics on the website. I put the analytics, but the site is crap,

we need to make a new site, but I put the analytics, and started to realize that many

people from Campinas searched, and a lot of people with a personal computer, and

very focused on a period only , on Christmas, because I put the analytics in our

Christmas rates page. I said 'there are people from Campinas wanting to come in for

Christmas' So I put together a package, interesting price, sold almost the New Year

Holiday prices for Christmas, and indeed a family bought 9 rooms and then a friend of

theirs bought the other 4. But only because we managed to identify that they were

accessing, were looking for. I always offer dynamic packages, that people can choose.

Choose the period. Sometimes I do a 5 day package, but if one wants to buy only one

day it is possible, of course I'm going to offer the total price of the package, I base

myself on that. And it's amazing for example, I do a package with 5 nights by

R$5000, but then the person says 'I do not want 5 days', and then I say 'but you have

to pay the total package' and then the person refuses. Then I do a package of R$5000

1 night plus R$50, R$100, R$150, R$200. R$5200. Then s/he takes 4 nights and does

not claim to pay R$5150 for 4 nights, it is amazing. S/he thinks ‘Okay, even if it is R$

50, but I'm not paying the last night’. It is also interesting because I can also sell the

last day. Anyway, on New Year's Eve, I didn´t sell 3 back bedrooms, the simplest

ones with the view to the street, I have 4 rooms of those. As it was difficult to sell I

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lowered the price. One of those who bought this room saw and said ‘I paid this much,

there is a difference of R$1350' I agreed and tried to justify. We have four categories

of rooms and you have the simplest one, the question is that I have even more

luxurious room to sell and then I had to lower the value of it. It made no sense to

leave the most luxurious room with a similar rate to the cheapest so I lowered the

price of all rooms, not intentional, I didn´t think it was going to create problems.

That's it, ‘no one will buy the same bedroom of yours paying less, because I have no

more available, what I have is more expensive, which I lowered the price and I was

lowering the others as well, but there is no availability of other rooms. Regardless,

s/he did not understand me, s/he said that if this was the explanation t was a waste of

time. Okay, I respect your opinion, then after the wife sent me an email also finding it

absurd. Replied the email saying ‘I'm worried about, and it’s complicated, is that you

do not want to understand the side of the hotel and my intention is not to have

dissatisfied customers, mainly before arrival, then the problem is this, I do not mind if

you cancel the reservation, I would not charge the penalty fee, and if the problem is

really R$1,350, as you are doing the math, I also give back this money for you, I paid

you to not stay here. Therefore, it was around R$10,000 the package, I returned the 10

thousand plus 1350 and then it became a matter of moral right? She said 'I'm not

looking to make 1350' I explained. Because of my attitude she replied that she had

finally agreed that it was a misunderstood, they did not cancel it, didn´t ask for a

refund, we became friends and we will open a branch together in Miami, and as he is

a painter, we made an agreement that he will paint some paintings to the hotel. So one

occasion that was supposed to be totally negative, it became a partnership, I showed

them that I was not joking. It is complicated a company that is afraid. I usually

explain to my clients that we have values and that is what creates our personality. We

sell these values, this is what we are, and that's what I need to put in their heads so

they understand what we are. Who wants us like this, will come and enjoy it, who

wants us to betray our values, we refund and pay to not stay with us . We do not want

to have contact with this type of people. Hence, our cancellation has a value, a penalty

fee and everything. But this is stipulated but not said to the guest. It works as follows,

we have a cancellation policy and if there is a cancellation, we try to resell the room,

but what we need is, as we have values, that people also have values and commit to it.

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It is a commitment, it is a contract, it is paid and the payment is the person’s signature

saying 'I accept the conditions' so when s/he paid, they accepted our conditions. I try

to get the person to repeat it and speak ‘okay, I won’t not go and so please go ahead

and cancel’. When that is done, then we try to resell. The person then accepted our

cancellation policy but as soon as we resell the room, s/he chooses for a refund of for

a credit. But this is all hidden, but for them we will make a cancellation. If we do not

sell, we keep the policy. That is what happened this weekend, 4 rooms that we

managed to resell, and they decided to stay with the credit.

Interviewer: And do you collect this cancellation number, per month, how many times

it happens?

Interviewee: It's another interesting thing. I have the operating system, which is

Desbravador. Use it more than 100% because we use it in such a way that it was not

actually created for. It has interesting parameters that we have created. I see the

reservations I have cancelled from the day we opened. In June for example, we had

three reservations canceled and then I got the history of them here. Look,

Booking.com reservation, 100% penalty fee… Actually cancellation for us is very

good because I take the penalty fee and still resell the room. And if I do not collect the

penalty fee, for example, what happens? The person made the reservation, R$1000 so

the penalty fee would be R$500. I tell that the fine will be 500. The person accepts,

it’s all right. If I resell the room, I'll call the person and say ‘I was thinking here, let’s

do this? You want the R$500 back, we refund you but if you want to take it as a credit

then you get the total credit of R$1000 and then you come back in another

opportunity, because you already had an interest to come in, you could not come now,

but maybe you will be interested again…’

Interviewer: It is an opportunity to offer the person the experience but it would be

more profitable to keep the R$ 500. However in the long term you would have another

guest in your database.

Interviewee: [It is more profitable] to keep the R$500. Therefore, we do not worry

about cancellations.

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Interviewer: This cancellation statistics for example, the holiday of September 7, in

previous years you have had four cancellations. You could estimate that this year will

probably have two, and in that sense you overbook.

Interviewee: OverBooking has been already in my mind since the season began. I saw

that we sent a lot of people to other hotels, we would be sold out long ago and still

had a lot of people looking for us, the demand was high and I had this desire to apply

overbooking. So I’ve been trying to find ways to do so, it is an idea that I have to have

for the next high season, I will gradually try it. This is the problem, as I said, I’ve just

got out of a meeting at the tourist office where there were many people in the

industry, and most of them hotel owners. And it's hard to have hotel owners here who

do like the owners of this hotel: they go away and let people who know how to work

be in charge, it is very complicated. Here there is the crowd that says ‘I am getting old

and I will open a beach hotel to see how things go.’ So it's very complicated for me to

depend on this type of entrepreneurs because I know that is not handled in the most

professional way I have no confidence. To HOTLE K I would send my guests, I know

they will be well taken care. That’s why we need to restructure ourselves. For

example, this happened last week. A person made a reservation here and another one

in HOTEL X. Their friends stayed here, and they stayed there. As I say, we have an

identity, we have values. One of our values is that you will not share the pool with

anyone who is not a guest. You will share the pool with the person who has the same

right as you. You will not share the beer with the guy who is passing on the beach that

will take your cold beer, and when you ask our waiter for your cold beer it will be

warm because there was none in the fridge. Values. Values based on a strategy and a

physical reality of the hotel. I'm not able to have more freezers to put more beer,

maybe I will not sell, so why would I do that? So what I am able today is to offer as

much as I can and to whom is my guest. They cannot write a complaint on

Booking.com, on TripAdvisor , they can write the value of the hotel 'we don’t want to

go back there anymore because it is a hotel value' and that's what I wanted them to

put, so now on anyone who reads it says ‘their services are strictly to guests so that

exactly where I want to go’. Then it is very complicated this type of partnership that is

very specific, each hotel has a way of working, each hotel has a particularity. You go

to resorts with 300 apartments and it is easy, you can easily have 100 passing by

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customers in this hotel, you need to bring business to the restaurant then, it is

different, a different structure.

Interviewer: And in times that demand is greater than supply, you make a waiting

list? If you are crowded and continue to receive calls, you make a list to contact them

if there is a cancellation?

Interviewee: At least for us here, as the demand is high, it does not work. 99.99999%

of the people we contacted after had already made reservations elsewhere. It is not as

dynamic. If you have 300 apartments, the probability of cancellation is much higher

than 13 apartments. And you think 10, 15, 20, 30 cancellations on public holidays,

you already consider that so you can overbook. In our case, imagine if we had here a

neighbor with, 100, 150 apartments, of course we would do overbooking. We know

then that the neighbor will not be sold out all the time. The guest calls here ‘Do you

have rooms available’ we say ‘wait!’ The we call our neighbor and ask ‘Do you have

rooms available?’ ‘We do!’ So it is easy then, pick a guest here send them to the

neighbor and we say 'yes, we have an apartment' When you realize you are already

crowding the other. It is a plan that I have to do, but I need to mature it.

Interviewer: Speaking of price, how do you set your price? How do you determine it?

How many times a year you review it? It is dynamic the whole month?

Interviewee: It is dynamic every minute, it is reassessed every day, all the time,

according to the information we have, we receive and that we search. [So in the web

site the price is not shown?] It is, but changing it is easy, you just go there and

change. See, we will travel, will buy the plane ticket everyone knows, why not hotels?

It is a culture that is complicated. It is already changing though, the proof is that this

is how we do it here. I have had occasions I offered a night for R$500 and then it sold

it, during the low season, low demand. Sold it already? I increased the other, then I

put 600 or so. But this 600 one the guest picked from Thursday to Saturday left the

night from Saturday to Sunday free, and then I sold this night for R$1500. Because

the highest demand, room nights from Saturday to Sunday is the highest demand, and

we sell more in the last minute, so it's great when we have it. There are nights from

Saturday to Sunday but the person picked only Thursday to Saturday, then we sell

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through Booking.com at a higher price and it sells, it sells! We have four room

categories, there is the standard that has no sea view, luxury with a side view, and

super deluxe and master, both beachfront, but the master has a whirlpool. [Showing

the layout of the hotel] Then I got here three masters, 2 super luxury, this is not an

apartment, it is a coffee area and that is why we will be closed, because it doesn’t

make sense, so we will build the fourteenth apartment. The hotel has 6 years, and I am

working here for 4, and I'm manager for 1 year. And the previous management was

totally [static] total. See, master apartment with whirlpool, super luxury apartment

without whirlpool. Apartment master had a difference of R$100, R$100 and

something in relation to the super luxury because of the whirlpool. What happened?

You looked here in our reservations map. The two super-premium were always sold

out. Because the guest thought ‘R$150 extra, I'll be in super luxury then, as I will stay

three days, 150 per day is almost one room night’. Only super luxury sold. What did I

do? Room night of standard R$100 less the luxury room night with a side view, did

not do anything with the luxury, set the room night here (master) whatever price, and

I reduce R$20 the super luxury room night. Now I have five masters, with the price of

five masters. How much revenue have we lost during all these years? Selling Super

Luxury R$100, R$150 cheaper? The point is that you are not paying R$20 more to

have a hot tub, no. You're having R$20 discount to stay in the super luxury. This is

the concept of fearful company that I explained. It is risky to do so? This is what the

previous manager thought. How can I justify only R$20 more? During Public

Holidays I increase it R$50. [Justify to whom?] To the guest, this is the question. It is

a very conservative concept. There is a difference to be conservative and be

reactionary. Conservative preserves those good habits that we have to actually

conserve, reactionary is to do what was done before to save custom… which was the

case here. Conservative ideas with reactionary attitudes and then we got plastered and

that is why we had low, high, mid-week, weekend, for us now this does not exist

anymore. For us now there is a lack of concern with the weekend that for us it is

already sold and more focus during the week, so being dynamic we can have higher

prices, whatever is it’s to increase R$2, R$5 or R$10. 2015 is the best year ever of

hotel, the year of economic crisis and it is the best year of the hotel. We are making a

new room, we are covering this area here to have more weddings, we heated the pool

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this year, made a refurbish in the bar and implemented electronic expense cards. I

assumed the hotel with 17 employees, we are 21 now, and we will refurbish the

kitchen now.

Interviewer: What about your clients, do you segment them? Business, leisure,

geographically? Does that matter for you?

Interviewee: I don’t do this firstly because I would need more people to do this. Me,

myself, doing it, it’s not possible. [Business? Conference? Meetings?] It's more

weddings because I do not have structure. Also, it is not an investment I can do, there

is no room for it. The hotel is small, does not advance, it doesn’t go. Sometimes we

do a few, when the companies are interested in adapting to our reality, something

more informal. Like outdoors with umbrellas, chairs, tables. But to put a multimedia

screen is not possible because of the daylight. It depends on the dynamics.

Interviewer: What about discounts? When do offer them? In which situations? How

do you do it? What is your experience?

Interviewee: We offer 10% discount for payment through bank deposit. An interesting

thing, check it out how crazy it is, to think of the cost reduction. First thing was to

review the fixed costs, for example computer technician I paid R$200 per month.

Firstly he was no longer serving us well, he did not bring us innovation. I decided to

cancel it, I know how to work with computers, we find a way to do it, only when there

is a huge problem we ask him. Canceled the contract. After 5 months we implemented

the electronic expenses cards, so had saved R$1,000. Then I called another computer

technician and he charged me R$300 to reset my entire network, separate the hotel

network from the guest’s one. Now I needed new computers, separated servers and he

charged me another 350 to format all computers and leave everything on track. This

in one year, I spent 650 reais in twelve months where it would have been spent

R$2,400. Then there was the fruit supplier. The previous manager he over cared for

the quality, that's good, great. The question is the cost associated to it. So that’s why

when I was in the front desk I didn´t see a possibility of reducing the price to sell

more and have this occupation, I could not do that because we would bankrupt. If I

were to charge R$330 per day it would not cover the breakfast cost. It would give a

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loss. When we see the reports showing the breakfast expenses with fruit for example,

with the previous supplier I had fruit nothing has changed. Then you compare the

occupation, and you see that we do twice, three times with the same. So cutting costs,

reviewing suppliers was essential. Another important detail, we had a fridge, washing

machine technician but everything had technical problems all the time. The next step

was to hire him full time, he was here every day. I pulled a report and had a thought.

He comes to work with a brand new car that costs R$25,000 and we spent with him

R$29,000, I other words we paid the car for him. What have I done? I have two

people in maintenance, the maintenance manager and the assistant. I think the total

cost of their course was R$3,500, including food and transportation. I paid the course

for them. For example the ice machine that broke every week is since November

without giving any problem. Because on top of everything the technician above all

was being dishonest. Cutting costs? No! Actually excess in costs. When I became the

GM of the hotel, the owners were thinking about selling it, and now we will open

another branch in the United States. The previous manager did the following. The

figure was R$37,000 for weddings, and we has this difficulty to sell it because the

neighbor was R$39,000, that thing I've explained to you, because of the covering. But

sometimes people fell in love with the hotel, and it was only then that happened that

we sold weddings. Because of quality service and because the person fell in love with

the hotel. What did he do? The covering company charges a certain amount, the

contract we make is to start covering on a Thursday and it only took it on Monday.

Because Sundays are the days off of the employee, then we would have to pay extra,

then would become more expensive for the couple, then the alternative was to take the

cover off Monday. Thus, it used to be from Thursdays to Mondays. So we used to

loose from Thursday to Friday, and Sunday to Monday. There were weddings that we

closed from Tuesday to Tuesday because of the covering. It was closed. Because then

the covering company said that it would need 10 people but if we allowed them to

start covering before then they would need only three and it would be cheaper for the

couple. Today we let them work from Thursday, it is very clear in the contract that the

lodging is from Friday to Sunday, and I still can sell Thursday to Friday by a really

low price, even during the covering work I still can have guest from Thursday to

Friday. And on Sunday they already have to take cover out, it’s their problem, they

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are already paying less. Interestingly, most of these large reservations, from Sunday

through Friday, these reservations they are made maximum up to two weeks in

advance, and these smaller reservations were made yesterday. Smaller reservations

are close to check in. Seeing this, no matter what, if the groom asks me to take the

cover on Monday, there is no way that’s happening, it must be on Sunday. Because

this person who is staying here, if I said that were no availability on Sunday, only on

Monday, s/he would not come. So now we realize how much we lost because of a

closed and static administration.

Interviewer: For instance, what do you think about targeting weddings during the high

season?

Interviewee: It's impossible to do, because in the high season, January, February, I

have this problem, it is not the price, I could put R$100,000 a wedding, the problem is

my occupation, because I have to do the covering thing then I lose some reservations.

It is not worth because my focus is not marriage, this is not a ballroom, this is a hotel

that focuses on accommodation, so if and focus on marriage I lose accommodation,

and then the person will not remember me when s/he want to come to BEACH B.

Interviewer: What do you think about having a customer data base?

Interviewee: I think it is very good but it depends what you do with it. Once I tried

sending email marketing, and I noticed that our clients find a little invasive. I do not

have any specific formation, but I love Marketing. Actually I've tried six degrees, but

I did not complete any, and the last one I’m trying is Marketing, which I intend to

finish. Before I was a manager, I picked up the email addresses from the system and

started sending email marketing. I made it clear ‘if you do not wish to receive this

email…’ I had a little bounce rate. Every week I used to send, holiday packages, and

had no rejections. They were receiving, but they were not answering. Some of them to

complain about the price. I stopped sending for a while, for 4 months. Then came our

Valentine's Day, and I sent to see and it was the highest rejection rate I've ever had.

What did I think? I started to send and they did not read there at the bottom and did

not ask to be excluded, so they received and deleted. Or ‘Maybe I’ve won a free

night’ then they opened and it didn´t happen. ‘They are offering packages, it’s too

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expensive’ and deleted. They had lost interest, and then had interest again and I put up

the opt-out even bigger to see whether or not the person wanted to receive. From that

moment I decided to not do it anymore. For example, let's think about facebook. I got

a person to manage our Facebook and Instagram, and then he told me ‘Doing this way

we will 2 million people’ Then that is exactly what I do not want to do. Imagine if 2

million people show up here, I'll give terrible service, so what was supposed to be

positive will be negative. So because of our reality I still cannot see the concern of

trying to go get them (clients). I think this is in general for everybody here, for

instance the meeting we had today in the tourism board. We are trying stop this

culture that people have that São Sebastião is one thing, BEACH A is another, and

BEACH B is another, although I do not agree with that. I think each one must be

independent. In this case yes, we keep searching, I offer my email database here, to a

much larger objective. Now here for the hotel I do not see the need for that, we can

meet the demand we have already from Booking[.com] and the hotel website. The

Booking[.com] is an incredible tool.

Interviewer: What channels are you using? Own website, Booking[.com]? Any

others?

And there is the Hotel Urbano we are in now, and B2W travel that is the submarine,

submarine trips, and so far it hasn’t sold anything yet but it is there because it is free,

sometimes something can happen. I did a consultancy in HOTEL X. That's when I

discovered that I can face management. Mainly I learned a lot from the former

manager here, what not to do. Little I did there but I could see that the owner there

pays the Hotel. In 15 years the Hotel hasn’t yet made any profit for him. The owner is

rich, the children work and have money to be able to pay here and let the old man

here so he doesn’t bother the sons, it is basically what has been happening for 15

years. I took its Booking[.com] book, the commission he was paying that month,

October 2013, R$650. Then I opened my laptop, the commission that we were paying

in October R$10,600. My commission to Booking[.com] in January is no more than

R$2,000 thousand. In this low season I’ve paid R$4,700

Interviewer: In high season you get out from Booking[.com]?

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Interviewee: Exactly, I decrease.

Interviewer: It is expensive, isn´t it?

Interviewee: 13%. But the higher the Booking[.com] commission is, it shows the

amount of revenue that we’ve had, we’ve sold. I've a meeting every three months with

the Booking[.com] manager and he did not show me, but I asked him to tell if there is

another hotel like us, that sells like us as he said that no one got even close. After the

commission I pay, there was a hotel paying R$1000 while I was paying R$4000. Then

the Booking proved to be a very good tool for us, and is our main channel, as well as

direct Booking.

Interviewer: Don’t you think the reservations through your website are cheaper for

you?

Interviewee: In my website I have a Booking[.com] button [that directs guests to the

bookin.com website], and reservations made through this button I don´t pay

commission. This function increased 30% the reservations made through our website.

Interviewer: What do you think about cancelling the contract with Booking[.com] and

selling only through your website? Your profit is higher…

Interviewee: I would not do it!

Interviewer: Google adwords, pay per click?

Interviewee: I do not do any of this! That’s it, my rate is R$300, I pay 13% for

Booking[.com], so I already add that and put in Booking[.com], the card fee also.

Costs 6% more expensive to buy through Booking[.com].

Interviewer: And how many rooms you give for Booking[.com]?

Interviewee: All I’ve got. Google adwords need people who understand how to do it, I

will not do. The Booking[.com] tool I know. I use Booking in a way that no other

hotel here uses. As a marketing and sales tool. For example, New Year's package

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from the 26th

to the 2nd

. Searches for the period of 27 to 2, no other hotel will show

but us. 28-2? 27-3? 28-4? We appear in every search you make. If you are looking for

other hotels they only show if you search 26-2, which is the package of 7 nights. Is it

a lot of work? It is a lot of work! But it works. So I can see, to me is tangible. I

received a call from the TripAdvisor manager with a business proposal. I calculated

the average and I’ve spend R$6,000 in average per month with Booking[.com]. See is

not an expense, it is an investment, but it is something I transfer to the guest, it would

be great if it came to me

Interviewer: Because if it came from your website, this money would yours?

Interviewee: Exactly. And then he said, ‘do you know that most of these reservations

from Booking[.com], almost all, are coming from TripAdvisor?’ You see, it jumps

from one to the other. I said, ‘That's great’ and he said ‘I will make for you US$500 a

month’ I said ‘Done deal! But I want to see the reports for me to see the real thing’

and he said it was confidential and could not show me. For him it is very clear, but for

me it is in the dark. Who proves that he is telling the truth, that the reservations that

are coming through Booking[.com] are coming from TripAdvisor? I'm seeing the

reservations from Booking[.com] but I'm not seeing his, then to who I'll give the

merit? On my website, I've never seen this return, because I never did it. So to do so I

need to hire someone, and I'll have to empower an employee. Another cost also we

cut was laundry. [instead of outsourcing you bought the machines?] I didn´t buy the

machines, I have them but we brought from the US as the hotel owners are there, it is

easier to bring things from these. It was a risk we decided running since December.

[What is the risk?] When you know the place, then you understand the risk. We

always had an outsourced laundry and it wasn´t meeting our needs anymore. On

Mondays they take the sheets to be delivered on Tuesday or Wednesday. They

delivered on Friday. This means that I had to have an extra set of sheets and If I called

the laundry, and I’ve been customers for five years, they said ‘you have to sort out

your sheets, we are too busy’. A laundry that offered this bad service, for a 5 year old

client, imagine what they would do if they find out I am using my own machines?

And my machines break? When I was a regular client they offered a bad service,

imagine now? So it's a high risk. It's complicated. Regardless, I did some calculations.

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I hired an employee, maid, I calculated soap products, managed to use only one

product to wash that I have found and for us it works, and we haven’t had complaints

yet. It was a cost that decreased greatly. There is a Johnson representative who is

insisting to sell a industrial machine and I explained to him that I want to invest in the

intellectual capital not in machines. It doesn’t work to put machines if the people

don´t understand the strategy but he does not agree. HOTEL X has industrial

machines and they don’t sell half of what we sell here. Same thing in the kitchen that

is being a problem for me. I let go the chef, there was too many complaints. She was

the cook, and if I brought someone from outside to be her boss I was going to have

trouble, she would not accept it. She cooks well, she knows how things work, I gave

her the opportunity. I do not know anything about who is working in what time. The

head of the sector is responsible for this. He decides and manages the way he wants,

he let people go, he hires and she could not adapt to this reality. For example,

Tuesday we will make an order ‘Do we need squid?’ ‘No! There is enough, we are

good for squid’ Saturday, two in the afternoon, starting getting busy the restaurant

calls me ‘There is no squid!’ Are you kidding me? Today I'm investing in intellectual

capital. I changed all the kitchen staff, the oldest in the kitchen has three years. The

food is great, but it was not meeting our needs, because the guest had nothing else to

complain about. I did a test and it was fabulous. I'm renovating all rooms, the first

room I did not refurbish it because I did not want but there was a stain on the ceiling

by infiltration and I took the opportunity to make general refurbishing in that room

and just missed the filling between the tiles. I told them to not do so I could run an

experiment. The room has a lot of complaint because it is too perfect but there is no

filling between the tiles. Experiment proved. When it is all perfect focus on a little

thing. That is what happened in the kitchen, I had nothing to complain about. All the

advances we have achieved in the kitchen was because of those who were already

there, but they stopped evolving and other sectors advanced, the guest does not have

anything to complain about reception, cleaning, but the kitchen stopped so focus on

the kitchen. I let everybody go!

Interviewer: Do you think about how many rooms you are going to give for each

channel according to the costs?

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Interviewee: I can only get an idea based on my operational, the guys that work here. I

wanted to have 20 channels, so I could have a that service to take care and integrate

the channel [a channel manager?] Yeah. But my operating people will not get it, they

need to understand. Today I have some small little problems that I say ‘I do not

believe you did that’ The experience that I have they will have to acquire. I teach

everything for them, but there are things that they want to learn the hard way, learning

from mistakes, want to feel it on the skin. I want to have more channels? Yes, but

everything will depend on my intellectual capital here. We are here forming the next

managers for other hotels, because here I the region nobody works like this, no one

can have this vision, no one can think in the future, they want to think now and decide

now and that’s it. The previous manager, the same way I met him he was gone, he

didn´t change a bit. When I became a GM I started changing every day and every day

was something different, something new.

Interviewer: The last theme is the strategic part, all hotel indicators, length of stay,

average daily rate, RevPAR… Have you had to deny a client?

Interviewee: We have here some flagged customers in the system. [Customers who

had problems?] Yes"

Interviewer: So all this data, cancellation, walk ins, occupation, you register them and

do you use them for estimations?

Interviewee: No, the only thing that I consult is sales. This is the reception

responsibility, weekly, almost every day. Same period last year is consulted. We

know when those reservations were made, the occupation last year, how long before it

was. And then we have to see that strategy. If a reservation is done well before, so we

already have to be earlier, already with the rate ready. At the beginning of the year we

already do this, it's a routine.

Interviewer: RevPAR does it influence you in any way? You do this analysis?

Interviewee: No, I don’t.

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Interviewer: The other areas of the hotel, for instance restaurant, do you think of it

when selling [rooms]? They also contribute for the hotel's total revenue, sometimes

even with a larger margin.

Interviewee: My management is very recent. So I had to go to each sector to make

things happen. And the main ideology, for example, the previous management always

told the owners that the needed electronic consumption cards. That means, ‘do this for

us to improve’. I did it differently, I improved the hotel with the tools I had to prove

that we can do ti. Want us to improve, implement the electronic consumption cards.

Same thing with the heated pool. Since I entered the hotel they said the heated pool

was needed for us to improve, and was never done, and now we did it. I proved that

we were doing all of this without heated pool, then imagine with a heated pool. So

this idea of using the tools we have to improve, with what we have, it is the principal.

So what I'd rather do, is to have the restaurant functioning properly, simple, but the

person is satisfied when choosing, according to the price we charge. I do not sell the

restaurant for example, it is difficult to sell the restaurant. I have no structure to do so

yet. Restaurant for us is still that thing that it is a necessary evil, you have to have. We

are going well, we were not red any month , differently than how it was in the past,

we had losses with the restaurant. And then I think it is a question of structure,

because I think that to bring business to the restaurant we need to target the general

people [not only guests] and we have no structure for that.

APPENDIX 3 – FULLY TRANSCRIBED INTERVIEW IN PORTUGUESE

INT10, M, B, GM

Entrevistador: Nesse assunto de gerenciamento de receitas, que áreas do hotel você

acha que engloba Revenue Management? Que tipos de técnicas de maximização de

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vendas você utiliza? Você tem alguma experiência nesse sentido de tentar aumentar

ocupação, receita?

Entrevistado: Na verdade isso é interessante por que eu to fazendo na prática mesmo,

por que eu assumi o hotel há um ano atrás. E entra também a questão da sazonalidade.

Eu no fundo, particularmente, acredito que pra gente não exista baixa temporada.

Independente de qualquer coisa pra mim isso é uma cultura que a gente preferiu

trabalhar assim. Eu to vindo agora de uma reunião na secretaria de turismo e é um

pouquinho complicado isso, mas assim você já conhece essa região há muito tempo?”

Entrevistador: O litoral norte ou PRAIA B?

Interviewer: The North Shore or PRAIA B?

Entrevistado: O litoral norte.

Entrevistador: Conheço há um bom tempo sim.

Entrevistado: Então você sabe que aqui não é a cidade de PRAIA B, PRAIA B é uma

praia, que é um bairro de São Sebastião. A praia é São Sebastião, só que já esta

inserido na nossa cultura, você não fala ‘eu to em São Sebastião.’ ‘Eu to em PRAIA

B, eu to em Maresias, to em Cambury’ E eles querem mudar essa cultura, por que eles

querem vender a praia, desculpa a cidade, a região como um todo. Tudo bem, eles não

estão errado também pensando nisso. A questão é que a gente já esta inserido numa

cultura que é difícil a gente agora unir tudo. É claro que isso é uma ferramenta que a

longo prazo vai talvez começar a unir. A questão é que primeiro a gente esta num ano

complicado [economicamente?] É! Mas desconsiderando isso, os outros anos também

foram assim, na parte de demanda de realmente ter conversão de venda, durante a

baixa temporada e meio de semana a gente não tinha muita coisa. Uma prova disso,

eu consigo até te mostrar aqui no sistema, o que é interessante por que vai ser uma

introdução pra gente chegar no que você quer. Pra você ter uma ideia nós ficamos, o

único hotel do litoral norte, nós ficamos lotados 100% de Agosto do ano passado até

Abril desse ano. A gente considera que uma temporada seja la a partir de Janeiro,

Janeiro e Fevereiro que você fica lotado 100%. E nós ficamos de Agosto, são 8 meses.

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[Pegando ali uma parte da baixa ainda?] Então, é isso que eu to falando, foi

temporada pra gente se você for comparar em ocupação. É obvio que a diária não foi

a mesma que a gente ganha em Janeiro, a gente cobra em Janeiro um preço e Agosto

foi outro. Esse é nosso meio de semana [mostrando a tela do computador], depois

desse final de semana. Aqui tá vazio por que a gente fechou por que a gente vai fazer

uma reforma, vai estar fechado o hotel. Esse é nosso meio de semana, e o nosso meio

de semana é praticamente assim praticamente todos os meio de semana. A gente ta

com uma ocupação entre 70% no meio de semana.

Entrevistador: E vocês estão conseguindo maximizar a receita nesse período? Estão

conseguindo tirar o maior proveito possível por que, só a ocupação tudo bem é legal,

mas o preço por exemplo, esta sendo trabalhado de forma dinâmica?

Entrevistado: É isso que eu falei, é uma introdução que eu ia chegar no ponto que

você queria chegar. O que acontece? Eu assumi como eu disse há 1 ano atrás, eu

trabalhava na recepção, tinha a função de chefe de recepção e eu saia aqui do Hotel e

via que tinha 1 carro, 2 carros em cada pousada. Contava esses carros, imaginando

que fossem hóspedes nas pousadas, eu contava 2, 4 6, 8 dava 15, 18 e eu pensava

assim ‘Poxa, então tem gente, a demanda existe mas por que que essa galera não fica

lá [no hotel dele]?’ É óbvio que as outras são mais baratas, por isso que o cara fechava

la também. A questão é que a gente tinha um produto, tem um produto muito melhor e

se eu conseguir chegar num valor próximo ao deles? É claro que não adiantava eu

como chefe de recepção chegar e falar ‘agora vamos vender mais barato’ Não adianta

por que depende dos outros setores, depende do operacional. Então mas aí eu já

descobri que a demanda existia, independente que se estivesse chovendo ou não.

Assim que eu assumi a gente acabou fazendo o projeto de custos e aí eu descobri

quanto custou cada quarto, o quanto custa um quarto duplo, triplo, quádruplo, o

quanto custa o consumo de energia, quanto custa o café da manhã e acabei fazendo

alguns cortes e isso me demandou um investimento inicial, trocar lâmpada por

lâmpada de led, e principalmente o café da manhã, que é o que me impossibilitava de

fazer uma diária mais barata, pra que aquele cara que ficou la, ficasse aqui, mas agora

eu estava no comando então eu poderia decidir. Meu café da manhã durante a semana

é completamente diferente do final de semana. O que acontece? Nós somos 5 hotéis

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pé na areia, uma concorrência de 5 hotéis, só que através dessas estratégias eu estendi

a faixa de concorrência no meio de semana. Então durante a semana eu não tenho

concorrentes pé na areia, meus concorrentes são outros. O custo benefício ele vai

pagar 50, 100 a mais pra ficar aqui. Muita gente critica ‘mas aí você ta trazendo outro

publico’ De fato, mas to trazendo outro público que é o cara que não ficaria aqui com

a diária normal. É o cara que fala assim ‘Se eu investir 50, 100 a mais por dia, eu fico

la no La Plage’ Não é o cara que diz ‘Eu não tenho 50, 100 reais a mais pra ficar la.

Então eu tenho que investir la mesmo’ Então a gente ainda conseguiu, mas a minha

faixa de concorrência aumentou demais. O cara que ficara há 5 anos numa pousada

aqui próxima, virou nosso hóspede. O mais interessante, o que é maluco, a partir do

momento que eu assumi o hotel eu cortei todos os custos com publicidade, todos,

todos que você imaginar. Guias de internet, guias impressos, publicação, tirei tudo. A

gente gastava por ano 22, 23 mil, o que é pouco. O interessante é que o hotel nunca

foi tão visualizado depois que eu cortei isso. O meu público que vem durante a

semana, veja bem é o meu público que começou la em agosto e que ta vindo agora,

ele é acostumado a ficar numa pousadinha ali, e ele tem um círculo de 5 amigos,

facebook, que também ficam com ele la e numa ocasião, e isso é fato real, isso

aconteceu aqui, em uma ocasião, eles nos descobriu ligou, viu no Booking e viu que a

diária estava mais ou menos, ligou aqui e ainda descobriu que tinha 10% de desconto

se pagasse em depósito, fechou aqui e nem comentou com os amigos. Ele chegou e

antes mesmos preencher a ficha de check in ele já estava tirando foto. É outro público,

é diferente, o cara quer mostrar. Então quem ta me fazendo a propaganda agora é o

compartilhamento do próprio hóspede. Primeiro eu cortei custo com publicidade e

segundo cortei custo de café da manhã. O incrível é que quando eu tenho reclamação

de café da manhã não é durante a semana, é no próprio final de semana. A minha

diária varia a partir de 490 o quarto mais simples, pra baixa temporada agora até 790.

Isso final de semana. Pra meio de semana vai cair pra 330 até 450. É o preço de

PRAIA B das outras mesmo. É 50, 60 mais caros que as outras, lógico contando

principalmente com a redução de custos que foi a primeira coisa que a gente fez.

Quando eu assumi a gente tinha um desperdício de café da manhã de

aproximadamente de 2kg de fruta e pão eram 3 saquinhos de pão, hoje não tem

nenhuma perda. A gente reestruturou operacional, todo mundo aqui teve que re-

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aprender a pensar. Assim que eu assumi eu fiz uma reunião com todos, e eu dependo

única e exclusivamente deles pra isso, e falei ‘Agora é assim, vai ser tocado de uma

determinada forma. Quem ta dentro ta aí, quem não quiser se adaptar a essa nova

etapa já me avisa que a gente já tira do quadro de funcionários pra que não atrase’

Somente dois funcionários que saíram que não queriam se adaptar, não queriam

pensar diferente. Voltando, a redução de custo foi o principal para eu poder repassar

isso pro hóspede, pra eu poder tirar a pessoa que estava la nas outras e ter um custo

benefício melhor aqui.

Entrevistador: Isso há 1 ano né? E agora você sente que daria pra dar uma

aumentada por que, o cara vem e tem uma experiência, a percepção de valor dele

dobra, e você acha que tem espaço pra aumentar o valor de acordo com a

antecedência?

Entrevistado: Vem de uma reestruturação complexa até dentro do operacional.

Primeiro, a gente tem algumas ferramentas, não foi fácil colocar isso, mas eu tenho la

na recepção hoje, as pessoas que estão lá, estão adequados a técnicas de venda, de

marketing como por exemplo se a pessoa esta fazendo a reserva agora pra novembro

meio de semana o valor vai ser um. Conforme vai se aproximando a gente vai vendo a

ocupação o valor aumenta, o mesmo acontece em todos os finais de semana. É muito

mais fácil você decidir aqui vamos continuar e aí engessa, não tem dinamismo e aí

você mata. Por exemplo a gente também faz casamento, na verdade a gente não faz

casamento, a gente oferece o espaço pra que seja feito, e eu me baseio totalmente com

o meu concorrente, pelas atitudes que ele tem. pra ser bem técnico, pra chegar no

ponto, a gente cobrava 37mil de sexta a domingo pra fechar o hotel pro casamento e

ele cobra 39, e ele fecha mais casamentos que a gente, fechava. ‘Mas ele é mais

caro?’ [As vezes ele oferece algo a mais.] Não! O público chegava e descobria que

aqui você precisava fazer cobertura, só olhar a foto do hotel. La no Louis et Louise

(concorrente direto) você entra na pousada já é um salão grande, já é um restaurante

então dependendo se é 100, 150 pessoas não precisa fechar cobertura. Cobertura é

mais caro, se você cobrir todas as áreas aqui do hotel da 26 mil, então aqui era 37

mais 26, e la era 39. Assim que eu assumi eu convenci os donos a diminuir o valor.

Nós diminuímos para 29 mil. Resolveu? Não, por que é 29 mais 26, continua sendo

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mais caro que la, e agora a gente fecha muito mais casamento que eles. Não tem

sentido! Não quando a gente não conhece o local, o perfil. O nicho mudou. Aquele

cara que tem 100, 150, 200 pessoas acaba fechando la por que se ele não fizer nada,

ele faz pouca cobertura. A gente descobriu no mercado daquela pessoa que se ela não

fechar o casamento aqui, ela não vai casar na praia. Ai diminui o preço. Então se for

um casamento para 60, 70, 80 pessoas ela consegue fazer o casamento sem cobertura

aqui e aí vai ser realmente uma redução pra 29 mil e não de 39 mil que ele pagaria la.

Agora a gente já teve 6 casamentos esse ano e a gente já ta com mais 13 até Junho do

ano que vem, então já deu mais que 1 casamento por mês. Por que a gente consegue

fazer isso? Por causa da estratégia dele [concorrente] ou falta de estratégia. Ele tem

uma política muito conservadora e ele não informa nada. Se você manda um email

para ele ‘eu quero fazer o casamento aí’ ele responde ‘então vem aqui, senta aqui e

vamos conservar, eu falo tudo se você vier aqui’ Então a publicidade que eu não faço,

quem faz é ele. 90% dos casamentos que nós fechamos aqui, a pessoa veio aqui pra

falar com ele, e aí já que estava aqui mesmo, veio conhecer. E aí é justamente aquela

pessoa que é pra 50, 60 pessoas. Por que aqui ele já sabe que é 29, aqui a gente fala

tudo, revela tudo, por que aí a pessoa só vem pra conhecer o espaço. se um dia ele

mudar a estratégia dele la, aí a gente vai ter que mudar a nossa aqui. É basicamente o

que acontece com a diária normal. Agora ta fechando muito casamento, estamos

fechando muito casamento que legal por essa estratégia. então você torce pra que você

feche muito casamento? Não! Eu queria que não fechasse nenhum. toda vez que ele

fecha casamento, e a gente descobre e faz uma pesquisa, por que quando a pessoa

vem aqui e pede um casamento pra tal data, e eu dependo do pessoal da recepção para

coletar todas as informações. e a gente sabe que ele foi pesquisar no concorrente e

então a gente já sabe que talvez tenha um casamento. o que acontece quando tem um

casamento no nosso vizinho? Aqui a gente hospeda 40 pessoas, la ele hospeda 30, e

casamento tem pelo menos 50 pessoas, sobra 20, mas não é porque o cara fecha aqui o

casamento pra 50 pessoas e não la, por que aqui é 29 la é 39, então ele fecha pra 150

pessoas, se ele hospeda só 30 e foram 150 pessoas sobra 120 pessoas pra ficar em

outro lugar, o mais próximo é aqui, então é óbvio que a gente aumenta o valor da

diária. Então quando ele faz casamento a gente vende diária com o valor de janeiro,

de temporada. É claro que, se for tudo pra mim, eu não consigo administrar, então eu

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tenho que passar toda essa informação, passar um treinamento para o pessoal da

recepção.

Entrevistador: Esse é um assunto que a gente vai conversar que se não tem um

treinamento, um envolvimento, e uma cultura dos funcionários de front desk, de

vendas, só uma pessoa pensando com a ideia de maximizar não da certo.

Entrevistado: Eles têm que entender a estratégia. eu gosto muito de ensinar então eu

não me preocupo em ficar até 11 da noite falando com quem ta ali, então as vezes é

individual, as vezes existe a possibilidade de falar com 2, 3 pessoas. É mais assim,

quando sobra tempo. Agora a gente vai ter muita reunião que a gente vai estar com o

hotel fechado.

Entrevistador: E o seu cliente, o seu hospede, o que você acha que ele preza no

momento de escolher entre os hotéis de PRAIA B, pra escolher? Preço, tranquilidade,

conforto, pé na areia?

Entrevistado: Eu acho que a gente tá evoluindo pra um período, pra uma geração de

colaboração, de compartilhamento. Hoje em dia todo mundo esta em saber de tudo.

tudo é de domínio e interesse público. Pensando nisso que eu desisti dos meios

individuais de compartilhamento. Eu vou gerar conteúdo, não. Quem vai gerar

conteúdo são os meus hóspedes. Eu percebi que 60% de todas as pessoas que nós

conversamos e que a gente registrou, eles nos escolheram pela boa pontuação e pelos

elogios de outras pessoas, Booking[.com], TripAdvisor, e indicação. A gente se baseia

nisso. É complicado a gente dizer o que o meu hóspede quer por que nem ele sabe. A

gente não sabe o que quer. Infelizmente a gente ta em um período que o cara quer

tudo que ele tem direito. Por exemplo o café da manhã do final de semana existe

reclamação justamente por falta de variedade, e quando você pergunta variedade do

que a pessoa não sabe dizer. A gente não sabe o que quer, então dizer o que meu

hóspede quer é terrível, não dá..

Entrevistador: Vamos falar de cancelamento? Nesse assunto eu gostaria de saber a

política do hotel, e como que ela é praticada? Ela é praticada a risca, tem um jogo de

cintura? O cancelamento é usado como um artifício de vendas futuras?

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Entrevistado: O que aconteceu? Isso é real. Como eu disse nosso tarifário é dinâmico,

tem que ser então a gente vai sentido o mercado, vai vendo a conversão, a demanda,

tudo mais, e claro a oferta, a gente faz pesquisa o tempo todo. Esse final de semana

por exemplo, nós temos 13 quartos, vendemos 17, 4 a mais por que houveram 2

cancelamentos, cada um era de dois quartos. A gente teve o cancelamento, nós

cancelamos e re vendemos. E veja bem o nosso vizinho, HOTEL Z não tem nem 50%,

ele não esta com 7 quartos ocupados, e a pousada HOTEL Y, que é uma das melhores

aqui, que é nossa concorrente ainda falta vender 4 quartos.

Entrevistador: E você passa informação do seu hotel pra eles, eles pra vocês?

Entrevistado: Antigamente não era isso, mas acho que vai mudando a cultura, não dos

donos, eles não gostam, mas entre nós internamente. A recepcionista la do Alcatraz

recebe nossa ligação umas 4, 5 vezes por semana. Pra que? Pra oferecer. Eu falo ‘

você ainda tem disponibilidade? Eu to lotado.’ ‘ah ainda tem 4 quartos’. Aí a pessoa

que a gente atende agente fala que na tem mas indicamos a Alcatrazes. Então ela

recebe 4, 5 vezes por dia essa pergunta e esse contato nosso pra nós oferecermos

clientes pra eles, e aí não custa nada a gente ligar pra puxar alguma coisa. É um

compartilhamento que a gente faz e que...

Entrevistador: Voltando sobre cancelamento...

“Vamos lá, Reveillon. Eu vendi o Reveillon só que ainda me faltava 3 quartos. E a

gente vendeu muito bem o Natal, também por estratégia por que antigamente a gente

nem tinha analytics no site. Eu coloquei o analytics, mas o site é uma porcaria

precisamos fazer um novo site, mas coloquei o analytics, e comecei a percebe que

muita gente de Campinas pesquisa, e muita gente com um computador mesmo, com

PC e foi muito focado num período só, pro Natal, por que eu coloquei o analytics na

aba do tarifário pro Natal. Eu falei ‘tem gente de Campinas querendo vir no Natal’

Então eu montei um pacote, preço interessante, vendi quase o preço de Reveillon pro

Natal, e de fato uma família comprou 9 quartos e aí um amigo deles comprou os

outros 4 então acabou meio que fechando pra eles. Mas por que a gente conseguiu

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perceber aquilo e a gente viu que eles estavam acessando, estavam vendo. Eu sempre

faço pacotes dinâmicos, que as pessoas escolhem. escolhe o período. As vezes eu faço

um pacote de 5 diárias, mas se a pessoa quiser comprar um ela consegue comprar, é

evidente que eu vou ta dando o valor total do pacote, eu me baseio nisso. E é incrível

por exemplo, eu faço um pacote com 5 diárias por R$5000, mas aí a pessoa fala ‘eu

não quero as 5 diárias’, e aí eu falo ‘mas você tem que pagar o pacote total’ e aí a

pessoa se recusa. Aí eu faço um pacote de 5 mil 1 diária e aí 50 reais o resto das

diárias e se ela pegar o pacote todo ela vai pagar 5 mil mais 50, 100, 150, 200, 5 mil e

200. Aí ela pega 4 diárias e ela não reclama em pagar 5mil 150 nas 4 diárias, é

incrível isso. Ela pensa ‘não tudo bem, que seja 50 mas eu não estou pagando a última

diária’. É interessante também por que eu consigo vender também a última diária.

Enfim, no Reveillon, me faltou 3 quartos ainda, os mais simples com vista pra rua, eu

tenho 4 quartos desses. Como estava difícil de vender eu baixei o pacote. Um dos que

comprou esse quarto viu e falou ‘eu paguei tanto, a diferença é de 1350’ eu falei, é, é

realmente e tentei justificar. Nós temos 4 categorias a que você pegou é a mais

simples, a questão é que eu ainda tenho quarto mais luxuoso pra vender e aí eu tive

que baixar o valor dele. Não fazia sentido eu deixar o quarto mais luxuoso no tarifário

com o preço parecido com o mais barato então eu baixei o valor de todos só como

estética não foi intencional, não achei que fosse dar esse problema. Então é isso,

ninguém vai comprar o mesmo quarto do senhor pagando menos, por que eu não

tenho quarto disponível, o que eu tenho é mais caro, que baixou o preço e eu fui

baixando dos outros também, mas eu não tenho dos outros. Independente disso ela

não quis me entender, ele falou que se fosse pra explicar isso nem precisava ter

ligado. Tudo bem, respeito a sua opinião, aí depois a esposa dele me mandou um

email também achando um absurdo. Respondi o email dizendo ‘o que me preocupa, o

complicado, é que vocês não querem entender o lado do hotel e a minha intenção não

é ter cliente insatisfeito, principalmente antes da hospedagem, então se o problema é

esse, eu não me importo que vocês cancelem a reserva, os isentarei da multa, e se o

problema é 1350 reais como vocês fazem questão de fazer a conta, eu também

devolvo esse valor pra vocês, pago pra vocês não ficarem aqui. Ou seja, era 10 mil e

alguma coisa o pacote, eu devolvi os 10 mil e pouco e mais 1350, aí entrou numa

questão de moral né? Ela falou ‘ eu não estou querendo ganhar 1350’ Expliquei. E

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pela minha atitude ela respondeu que agora sim ela considerava que nada passou de

uma entendido, não cancelou, não pediu retorno, viramos amigos e a gente vai abrir

uma filial em Miami, e como ele é pintor, a gente fez um acordo que ele vai pintar uns

quadros para o hotel. Então uma ocasião que era pra ser totalmente negativa, se tornou

uma parceria, por que eu mostrei pra ele que eu não estava de brincadeira. Também é

complicado o conceito de empresa bundona, e eu costumo falar pros meus clientes

que a gente tem valores e é isso que cria nossa personalidade, e esses valores que a

gente vende, são nossos valores, e é isso que nós somos, e é isso que eu preciso

colocar na cabeça deles que eles entendam o que nós somos. Quem quer a gente

assim, vai vir e vai gostar, quem quer que a gente traia nossos valores, a gente até

devolve o dinheiro e até paga pra pessoa pra não vir que a gente não quer ter contato

com esse tipo de pessoa. Então, o nosso cancelamento tem um valor, tem multa e tudo

mais. Mas isso é estipulado e não é dito pro hospede. A gente trabalha da seguinte

forma, a gente tem a política de cancelamento e ela é aplicada, e se ela é aplicada a

gente tenta revender, mas o que a gente precisa é que assim como a gente apresenta

valores, que a pessoa também tenha valores e honre o compromisso, é um

compromisso, é um contrato, ela pagou e esse pagamento é a assinatura dela falando

‘aceito as condições’ então quando ela pagou ela aceitou nossas condições. Eu tento

fazer com que ela repita isso e fale ‘tudo bem, não vou mais mesmo e pode cancelar’

Feito isso, aí a gente tenta revender. A pessoa já aceitou o cancelamento da forma que

é o nosso padrão mesmo mas assim que a gente consegue revender o quarto aí ela

escolhe ou a devolução ou ficar com um crédito. Mas isso é tudo oculto, mas pra ela a

gente vai fazer um cancelamento. Caso a gente não venda, a gente mantém a política.

Que foi o que aconteceu nesse final de semana, 4 quartos, que a gente conseguiu

revender, e eles decidiram ficar com o crédito.

Entrevistador: E você registra esse número de cancelamentos, por mês, quantas vezes

acontece?

Entrevistado: É uma outra coisa interessante. eu tenho o sistema operacional, que é o

desbravador. a gente usa o desbravador mais que 100% por que a gente usa ele com

ferramentas que ele não foi criado para tal coisa, e a gente usa ele pra aquilo. Ele tem

parâmetros interessantes que a gente criou. Eu vejo as reservas que eu cancelei. Desde

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que quando abriu. Em junho por exemplo, nós tivemos 3 reservas canceladas e aí eu

tenho até o histórico delas aqui. Olha la, reserva do Booking[.com], multa de 100%...

Na verdade o cancelamento pra gente é muito bom, por que eu cobro a multa e

revendo. E se eu não cobrar a multa, por exemplo, o que acontece? A pessoa fez a

reserva mil reais então a multa vai ser de 500 reais, eu falo pra ela que a multa vai ser

de 500 ela aceita, ta tudo certo. Revendi o quarto, eu ligo para ela e falo ‘eu tava

pensando aqui, vamos fazer assim? Você quer os 500 reais de volta, eu te devolvo

mas se você quiser ficar com o crédito no hotel, aí você fica com o crédito total dos

mil reais e aí você vem numa próxima oportunidade, por que você já tinha interesse

de vir no hotel agora, não pôde vir, pode ser que surja um novo interesse...’

Entrevistador: É uma oportunidade de oferecer a experiência mas é mais lucrativo

pra você de repente ficar com os 500 reais, mas pra um longo prazo pra ter mais um

cliente no banco de dados.

Entrevistado: [é mais lucrativo.] ficar com os 500 reais. Então o cancelamento não é

pra gente uma preocupação.

Entrevistador: Essa estatística de cancelamentos, por exemplo o feriado de 7 de

setembro, nos anos anteriores você teve a incidência de 4 cancelamentos. Pode-se

acreditar que também para esse ano vai ter pelo menos uns dois. E aí nesse sentido

você faz um overBooking.

Entrevistado: O overboking já esta na minha mente desde da temporada que passou.

Que eu via que a gente mandou muita gente pra outros hotéis, a gente tava lotado há

muito tempo atrás e tinha muita gente procurando, a demanda era grande e me surgiu

essa vontade de ter o overBooking. E de la pra cá eu venho tentando amadurecer isso,

e é uma ideia que eu to tendo já pra essa temporada, vou começar aos poucos pra

tentar. O problema é o seguinte, como eu disse, acabei de sair de uma reunião na

secretaria de turismo onde tinha muita gente do setor, e a maior parte dono de

pousada. E é difícil você ter donos de pousada aqui que fazem como por exemplo

como os donos desse hotel que vão embora e deixam quem sabe trabalhar, é muito

complicado. Aqui é a galera mais que fala ‘não agora to ficando velho, to tranquilo e

vou montar uma pousada na praia pra ver a coisa rolar’ Então é muito complicado eu

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depender desse empresários, por que eu sei que não é tratado da forma mais

profissional, eu não tenho confiança. Pra Alcatrazes eu mandaria pra la, eu sei que vai

ser bem atendido. por isso que precisa se reestruturar. Por exemplo, isso aconteceu na

semana retrasada. Uma pessoa fez uma reserva aqui e uma no Louis ET Lousie. Os

amigos deles se hospedaram aqui, e eles vieram pra ca. Como eu digo, a gente tem

uma identidade, temos valores. Um valor nosso é o seguinte, você não dividirá a

piscina com quem não é hóspede. Você dividirá a piscina com a pessoa que tem o

mesmo direito que você que pagou. Você não dividirá a cerveja com aquele cara que

ta passando la na praia, que vai tomar a sua cerveja gelada, e quando você for pedir a

sua cerveja pro garçom vai estar quente por que teve que repor no freezer. Valores.

Valores baseados numa estratégia e numa realidade física do hotel. Eu não tenho

condições de ter mais freezer pra colocar mais cerveja, talvez eu não venda, então pra

que eu vou fazer isso? Então o que eu tenho condições hoje é de oferecer o máximo

que e posso pra quem é o meu hóspede. eles colocaram no Booking, no tripadvisor

não uma reclamação, colocou la o valor do hotel ‘nós não voltamos mais, mas é um

valor do hotel’ e é o que eu queria que ela colocasse, por que agora quem lê la fala ‘la

não pode mesmo ficar ninguém mesmo que não esta hospedado no hotel, é pra la que

eu vou’ se é isso que a pessoa quer. Então é muito complicado esse tipo de parceria

por que é muito específico, cada hotel tem uma forma de trabalho, cada hotel tem uma

particularidade. Você vai pra resorts de 300 apartamentos fica fácil, por que você

consegue ter 100 passantes tranquilos num hotel desse, você precisa ter pra

movimentar o restaurante então, é diferente, é uma estrutura diferente.

Entrevistador: E nos períodos que a demanda é maior que a oferta, você faz uma lista

de espera? Se você esta lotado e continua recebendo ligação, você faz uma lista pra

entrar em contato caso haja um cancelamento?

Entrevistado: Pelo menos pra gente aqui, como a demanda é grande, isso não

funciona. 99.99999% das pessoas que nós entramos em contato já fez reserva em

outro lugar. não é tão dinâmico assim. se você tem 300 apartamentos, a probabilidade

de cancelamento entre eles é muito maior do que 13 apartamentos. E você considera

10, 15, 20, 30 cancelamentos no feriado, você já considera isso então você consegue

vender overbooking. No nosso caso imagina se a gente tivesse aqui o vizinho com,

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100, 150 apartamentos, é obvio que a gente ia fazer overbooking. A gente sabe que o

cara não vai estar lotado o tempo todo, é tranquilo a pessoa fala ‘tem disponibilidade

aí?’ perai. [liga no vizinho] ‘tem disponibilidade aí?’ ‘tem’ Escolhe um aqui, joga pra

la e fala ‘tem sim, tem um apartamento’ Quando você vai ver você já esta lotando o

outro. É um plano que eu tenho pra fazer, mas eu preciso amadurecer.

Entrevistador: Por falar no preço, como você trabalha o seu preço? Como você

determina? Quantas vezes ao ano você revê? Ele é dinâmico o mês inteiro?

Entrevistado: É dinâmico de minuto a minuto, isso é repensado todos os dias o tempo

todo, conforme as informações que a gente tem. Que a gente recebe e que a gente

busca. [Então no site não tem os valores?] Tem, mas mudar é fácil, é só ir la e mudar.

Veja bem, a gente vai viajar, vai comprar passagem de avião todo mundo sabe, por

que hotel não? É uma cultura que é complicado. Já esta mudando, a prova é que da

pra fazer isso por que é assim que a gente faz aqui. eu já tive ocasiões que eu fiz a

diária do apartamento a 500 reais e aí vendeu, no período baixo, procura baixa. Ja

vendeu? Vamos aumentar o outro, aí eu coloquei 600 e pouco. só que nesse de 600 e

pouco, o cara pegou de quinta pra sábado, sobrou a diária de sábado pra domingo, e aí

eu vendi essa a mil e quinhentos. Por que é a grande procura, diária de sábado pra

domingo é a de maior procura, e a gente vende mais em cima da hora, então é ótimo

quando tem. Tem diária de sábado pra domingo, que o cara pegou de quinta pra

sábado, aí a gente já vai e coloca no Booking no valor mais alto e vende, vende! Nós

temos 4 categorias de quarto, tem a standard que não tem vista pro mar, a luxo com

vista lateral, e a super luxo e a master, ambos de frente pro mar, mas a master tem

hidromassagem. [mostrando a planta do hotel] Então eu tenho aqui 3 masters, 2 super

luxo, esse não é um apartamento, é um cafezinho que da acesso a isso. e é por isso

que a gente vai ficar fechado, por que isso não tem lógica, por que a gente vai

construir o décimo quarto apartamento. O hotel tem 6 anos, e eu estou trabalhando

aqui há 4, e sou gerente há 1 ano. E a gestão anterior era [estática] total. veja bem,

apartamento master com hidromassagem, apartamento super luxo sem

hidromassagem. Apartamento master tinha uma diferença de 100, 100 e pouco reais

do super luxo por causa da hidromassagem. O que acontecia? Você olhava aqui no

mapa de reservas. ficava os dois superluxo só reserva neles, por que a pessoa pensava

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150 reais a mais, vou ficar na super luxo então por que eu vou ficar 3 dias, 150 por dia

é quase uma diária, só super luxo vendia. que eu fiz? Diária do standard, 100 reais a

menos que a diária do luxo com vista lateral, pulo a luxo (não faço nada), jogo a

diária desse aqui (máster) o preço que for, e diminuo 20 reais pro super luxo. Agora

eu tenho 5 masters, pelo valor, o preço de 5 masters. O que a gente não perdeu de

faturamento durante todos esses anos passados? Vendendo Super Luxo a 100, 150

reais mais baratos? A questão não é que a gente colocou 20 reais a mais para ter

hidromassagem, não. Você ta tendo 20 reais de desconto para ficar na super luxo. Que

é aquele conceito de empresa bundona que eu digo, é arriscado fazer isso, que é como

o gerente anterior pensava. Como eu vou justificar 20 reais a mais só? Feriado eu

aumento 50 reais. [Justificar pra quem?] Pro hóspede, essa é a questão. É o conceito

conservador demais. Existe uma diferença de ser conservador e ser reacionário.

Conservador conserva aqueles costumes bons que a gente tem que conservar mesmo,

ser reacionário é fazer como era feito antes para conservar o costume, régua na mão,

ajoelha no milho, que era o que acontecia aqui. Ideia conservadora com atitudes

reacionárias e aí a gente ficava engessado e aí por isso que a gente tinha baixa, alta,

meio de semana, final de semana, pra gente agora não existe mais isso. Pra gente

agora o que existe é uma despreocupação com o final de semana que pra gente já esta

vendido e um maior foco durante a semana, sendo dinâmico então a gente consegue

ter valores mais altos, que seja aumentar 2 reais, 5 reais, 10 reais. 2015 é o melhor ano

hotel, ano de crise, é o melhor ano do hotel. A gente ta fazendo um novo quarto, a

gente ta cobrindo essa área aqui para melhorar pra casamento, a gente aqueceu a

piscina esse ano, fiz reforma no bar e colocamos comanda eletrônica, eu assumi o

hotel com 17 funcionários, estamos com 21, vamos reformar a cozinha agora.

Entrevistador: E o seus clientes você segmenta eles? Negócios, lazer, geográfico?

Tem algum peso isso?

Entrevistado: Não faço isso por que primeiro que eu precisaria de mais gente pra fazer

isso, eu fazer não ia dar. [Business, conferência, reunião?] É mais casamento, por que

eu não tenho estrutura. não é um investimento que eu possa fazer também, não tem

onde colocar. O hotel é pequeno, não avança não vai. Ainda fazemos alguns, quando

as empresas tem interesse em se adaptar a nossa realidade, uma coisa mais descolada

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mesmo. Quando tem eles fazem aqui, ao ar livre, com guarda sol, mesas cadeiras.

colocar um data show, não vai conseguir por causa da luz do dia. vai depender da

dinâmica.”

Entrevistador: E desconto? Quando você aplica? Em que situações? De que maneira?

Qual a sua experiência?

Entrevistado: A gente trabalha com desconto fixo de 10% pra pagamento em depósito

bancário. Uma coisa interessante, olha só que loucura também, pra pensar na redução

de custo. Primeira coisa foi rever os custos fixos, por exemplo técnico de informática,

eu pagava 200 reais por mês. primeiro que ele já não estava nos atendendo bem, não

trazia inovação. decidir romper, eu já sei mexer em computador. A gente da um jeito,

vai se virando, só quando der um BO grande aí a gente faz. Rompi com ele, fiquei 5

meses e fomos implantar a comanda eletrônica, então já economizei mil reais. Aí

chamei um outro técnico ele me cobrou 300 pra me refazer toda a rede, separar as

redes do hotel e dos hóspedes. Aí agora precisei por que coloquei computador novo,

separei os servidores e ele me cobrou mais 350 pra formatar todos os computadores e

deixar tudo nos eixos. Isso em um ano, gastei 650 reais em doze meses gastaria 2400

reais. Aí tinha um fornecedor de fruta. O gerente anterior ele privava muito pela

qualidade, isso é bom, ótimo. A questão é o custo, então por isso la na recepção eu

não via possibilidade de reduzir o preço pra vender mais e ter essa ocupação, eu não

podia fazer isso por que a gente ia falir. Eu ia cobrar uma diária, se eu cobrasse 330

reais a diária o cara não ia pagar o café da manhã. Ia dar prejuízo. Quando a gente tira

os relatórios com gastos com café da manhã, com fruta por exemplo, com o

fornecedor antigo que eu tinha de frutas, o gasto é igual. Não mudou nada. Aí você

compara com a ocupação, e você vê que a gente faz o dobro, o triplo com o mesmo.

Então o corte de custo, rever os fornecedores foi imprescindível. Um outro detalhe

importante, a gente tinha técnico de refrigeração, maquina de lavar, e tudo vivia

dando muito problema. Faltou assinar a carteira do técnico, ele estava aqui todos os

dias. Eu puxei o relatório e pensei. Ele vem trabalhar com um Uno, que ele comprou

zero, que custa 25 mil, e a gente gastou com ele 29 mil, ou seja, pagamos o carro pra

ele. Que que eu fiz? Eu tenho duas pessoas na manutenção o gerente de manutenção,

e o assistente. Acho que o custo total do curso deles foi de 3500 reais, incluindo

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alimentação e transporte. Dei o curso pra eles. Por exemplo a máquina de gelo que

dava problema toda semana, esta desde de novembro até hoje sem dar problema

nenhum. Por que o técnico além de tudo estava fazendo os esquemas. corte de custo?

Não na verdade excesso de custo anterior. Eu assumi o hotel, os donos estavam

pensando em vendê-lo, e agora vamos fazer outro nos estado unidos. Eu tinha o

gerente anterior que fazia o seguinte. O valor era de 37 mil os casamentos, e a gente

via essa dificuldade de fechar por que o vizinho era 39, aquela coisa que eu já te

expliquei, por causa da cobertura. Mas as vezes as pessoas se apaixonava por aqui, e

era só assim que a gente fechava casamento. Pelo atendimento e por que a pessoa se

apaixonava. O que que ele fazia? O cara da cobertura cobra um determinado valor, no

contrato a gente faz o início da cobertura na quinta e na época dele tirava na segunda,

por que se for pra tirar no domingo é dia de folga dos funcionários, então tem que

paga extra, então vai ficar mais caro pros noivos, então a alternativa era jogar pra

segunda. Era de quinta pra segunda. Então a gente perdia de quinta pra sexta, e de

domingo pra segunda. tinha casamentos que ele fechava terça feira, até a outra terça,

por causa da cobertura. ficava fechado. Por que aí o cara da cobertura falava que ia

levar 10 pessoas, mas se você me liberar para colocar a cobertura antes, aí eu levo três

e vai ficar mais barato pros noivos. Hoje a gente libera na quinta feira, muito claro no

contrato que é de sexta a domingo a hospedagem e eu ainda consigo vender de quinta

pra sexta por um valor baixinho, mesmo montando a cobertura ainda tenho hóspede

de quinta pra sexta. E no domingo já tem que tirar a cobertura, problema deles, eles já

estão pagando menos. O interessante, a maior parte dessas reservas grandes, que fica

de domingo até sexta, essas reservas elas são fechadas no máximo duas semanas

antes, e essas reservas menores forma feitas ontem. menos diárias com maior

proximidade do check in. Vendo isso, por mais que o noivo me peça parar tirar na

segunda feira, não tem como, tem que ser no domingo. Por que essa pessoa que esta

ficando aqui, se eu falasse que não tem entrada no domingo, só na segunda, ela não

ficaria. Então a gente percebe o quanto a gente perdia de hospedagem e faturamento

por causa de uma administração fechada e engessada.

Entrevistador: Por exemplo o que você acha de fazer casamento na alta temporada?

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Entrevistado: Não da pra fazer, por que na alta temporada, janeiro, fevereiro, eu tenho

esse problema, não pelo valor, eu poderia colocar 100 e poucos mil reais num

casamento, o problema é a minha ocupação, por que eu tenho que fazer e tirar

cobertura, e aí eu perco algumas reservas. Não compensa por que meu foco não é

casamento, aqui não é um salão de eventos, aqui é um hotel foca em hospedagem,

então se e foco pra casamento eu perco hospedagem, e daí o cara não vai lembrar de

mim quando quiser vir pra PRAIA B.

Entrevistador: O que você acha de ter uma base de dados dos clientes?

Entrevistado: Eu acho muito bom mas depende do que você vai fazer com isso. Uma

vez eu experimentei mandar email marketing, e reparei que pro nosso público acaba

sendo um pouco invasivo. Eu não tenho formação nenhuma, mas eu amo Marketing.

Na verdade eu já tentei 6 faculdades, mas não conclui nenhuma, e a última que eu

tentei agora é Marketing, que é a que eu pretendo concluir. Antes de eu ser gerente,

eu peguei os emails do sistema e comecei a mandar email marketing. escrito ‘se não

quiser mais receber esse email.’ Tive uma pequena taxa de rejeição. Toda semana eu

mandava, pacote de feriado, mandava e não tinha nenhuma rejeição. Tão recebendo,

mas não tão respondendo. Alguns pra reclamar do preço. Parei de enviar por um

tempo, fiquei 4 meses sem enviar nada. Aí veio o dia dos namorados, e eu envie pra

ver e foi a maior taxa de rejeição que eu já tive. O que acho? Eu comecei a enviar, ou

não leu la em baixo e não pediu para excluir, mas começava a receber email nosso e

deletava. ou ‘sera que eu ganhei uma diária’ aí ela abre e não, estão oferecendo os

pacotes, muito caro e deletava. eles tinham perdido o interesse, e criou o interesse

novamente e eu coloquei até maior o opt-out pra ver mesmo se a pessoa queria. Eu

decidi a partir daquilo não fazer mais isso. Por exemplo, vamos pensar no facebook.

eu consegui uma pessoa que faz permuta, permuta de meio de semana, ele administra

agora nosso facebook e nosso instagram, e aí ele me falou. faz assim que você vai

alcançar 2 milhões de pessoas. então é esse que eu não quero que faça. Imagina se as

2 milhões de pessoas liga aqui, eu vou dar um péssimo atendimento, então o que era

pra ser positivo vai ser negativo. Então, pela realidade que a gente tem eu ainda não

consigo ver essa preocupação de tentar ir buscar, ir la buscar (clientes). Acho que isso

serve pro geral, como por exemplo a reunião que a gente fez hoje no conselho do

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turismo. A gente tentar tirar essa cultura das pessoas que São Sebastião é uma coisa,

Maresias é outra, e PRAIA B é outra, apesar de eu não concordar com isso. eu acho

que cada um tem que ser cada um. Nesse caso sim, a gente ficar buscando, eu oferecer

meus email aqui pra mandar pro cara la, aí sim eu ligar aqui e falar pro cara la. pra um

bem muito maior, que abranja muito mais coisas. Agora aqui pro hotel eu não vejo

essa necessidade por que a gente consegue suprir a demanda que nós temos já,

Booking e site do hotel. O Booking se mostrou uma ferramenta incrível. Veja bem.

Entrevistador: Quais canais você esta? Próprio site, Booking? Tem algum outro?

Entrevistado: E aí tem o hotel urbano que a gente colocou agora, e o B2W viagens

que é do submarino, submarino viagens, e até agora não vendemos nada. mas ta la pro

que é de graça, as vezes pode ser que aconteça alguma coisa. Eu inicie uma

consultoria no Louis et Louise. foi aí que eu descobri que eu posso encarar a gerência.

principalmente que eu aprendi muito com o gerente daqui, anterior, o que não fazer. O

pouco que eu vi la, que eu comecei a pesquisar, eu percebi que o cara paga a pousada.

há 15 anos a pousada nunca deu lucro pra ele. 10 a zero pro prejuízo, saí negativo 10

pra ele. o cara é rico, os filhos trabalham e tem grana pra poder bancar aqui e deixar o

velho aqui e não encher o saco deles, é basicamente isso que acontece há 15 anos. Eu

peguei o Booking dele, comissão do Booking que ele tava pagando aquele mês,

outubro de 2013, 650 reais aí eu abri no meu laptop a comissão que a gente estava

pagando em outubro 10 mil e 600 reais. A minha comissão que eu pago pro Booking

em Janeiro é no máximo 2 mil reais. Eu paguei agora baixa temporada pro Booking

4700 reais

Entrevistador: Na alta você tira do Booking[.com]?

Entrevistado: Exatamente, eu diminuo.

Entrevistador: É caro, não?

Entrevistado: 13%. Mas quanto maior a comissão do Booking mostra a quantidade de

faturamento que a gente teve, que a gente vendeu. Eu tenho reunião a cada 3 meses

com o gerente do Booking e ele não me mostrou, mas eu pedi para ele dizer se tem

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alguém que faz como a gente, que vende como a gente, ele falou não chega nem aos

pés. Fora a sua, a comissão que paga maior foi de 1000 reais enquanto eu tava

pagando 4 mil. Então o Booking se mostrou uma ferramenta muito boa pra gente, e é

o nosso carro chefe, além da reserva feita direta.

Entrevistador: E você não acha que as reservas feitas pelo seu website não sai mais

barato?

Entrevistado: Direto do meu website eu tenho o botão do Booking, e as reservas feita

por esse botão não tem comissão. E essa função aumentou 30%, de reservas feitas

pelo nosso website.

Entrevistador: E o que você acha de cancelar o Booking, e fazer só pelo seu site? Seu

lucro é maior pelo seu site...

Entrevistado: Não faria!

Entrevistador: Google adwords, pay per click?

Entrevistado: Eu não faço nada disso! Aí é que esta, a minha tarifa custa 300 reais, eu

pago 13% de comissão do Booking, então eu já faço isso e jogo no Booking o extra, a

taxa do cartão também. Custa 6% mais caro fechar pelo Booking.

Entrevistador: E quantos quartos você da pro Booking?

Entrevistado: Todos que eu tiver. O Google adwords precisa de gente que entende pra

fazer, eu não vou fazer. O Booking a ferramenta eu conheço. eu uso o Booking de

uma forma que nenhuma outro hotel aqui no litoral usa. Ferramenta de venda, de

marketing. Por exemplo, pacote de Reveillon, de 26 ao dia 02. Procura de 27 a 2, não

vai aparecer ninguém, só a gente. De 28 a 2? De 27 a 3? De 28 a 4? A gente aparece

em todas as pesquisas que você fizer. Se você for procurar os outros, só vão aparecer

de 26 a 2, que é o pacote de 7 diárias. Da trabalho? Da um puta de um trabalho, mas o

negócio funciona. Então eu consigo ver, pra mim é tangível. Eu recebi uma ligação do

gerente da TripAdvisor e veio com uma proposta. Eu tirei a média e deu 6 mil reais a

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média de gasto por mês com o Booking. Veja bem não é gasto, é um investimento,

mas é um repasse que eu fiz pro hóspede, que seria ótimo se viesse pra mim

Entrevistador: Por que se viesse pelo seu website, ia ser pra você esse valor?

Entrevistado: Exatamente. E aí ele falou, ‘você sabia que a maioria dessas reservas

que esta fazendo pelo Booking, quase todas, estão vindo pelo trip advisor?’ Ta vendo,

vai pulando de um para outro.Eu falei, ‘Isso é ótimo’ e ele falou ‘e eu vou fazer pra

você por mês, 500 dolares’. eu falei ‘ta fechado agora’ mas eu quero ver os relatórios

para eu poder ver a realidade e ele falou que era confidencial, e que não podia mostrar

pra mim. Para ele esta muito claro, mas pra mim esta no escuro. Quem prova que

você esta falando a verdade, que as reservas que estão vindo pelo Booking estão

vindo do TripAdvisor? Eu to vendo a reserva do Booking mas não estou vendo a sua

então pra quem eu vou dar o mérito? No site, eu nunca vi esse retorno, por que eu

nunca fiz. Então para fazer eu preciso contratar alguém, e eu vou ter que repassar para

algum funcionário. que a gente passa o lençol dobrado, como os donos do hotel estão

lá, fica mais fácil trazer essas cosias. Eu falei que era um risco que a gente esta

assumindo desde dezembro. [Qual o risco?] Quando você conhece o local, aí você

entende o risco. nós sempre tivemos a lavanderia, terceirizada e essa lavanderia já não

nos supria adequadamente. na segunda feira eles levavam os lençóis, então era para

entregar na terça, ou na quarta. eles entregavam na sexta. Isso quer dizer que eu tinha

que ter um enxoval a mais, e se eu ligasse na lavanderia, cliente de 5 anos atrás

cobrando, eles falavam ‘vocês tem que resolver e o enxoval de vocês, a gente esta

com muito trabalho.’ se uma lavanderia que me oferecia uma porcaria de um serviço

desse, quando eu era cliente já fazia isso comigo, imagina agora que eu comprei uma

calandrinha e estou usando agora, e eu preciso da lavanderia agora? Quebra minha

calandra? Se quando eu era cliente já tinha um serviço péssimo, imagina agora? Então

é um risco alto. É complicado. Independente de qualquer coisa, fiz os cálculos.

aumentou um funcionário, camareira, cálculos com produtos sabão e tal, consegui

manter 1 produto só que eu descobri e pra gente esta dando certo, e nunca tivemos

reclamação de nada. foi um custo que diminuiu muito. Tem um representante da

Johnson que também vende máquina industrial ele fica insistindo para colocar

máquina industrial e eu explico pra ele que e maior investimento que eu quero fazer é

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no capital intelectual, não adianta eu ter maquina industrial e ter um pessoal que não

entendem a estratégia, e ele não concorda. O HOTEL X tem máquina industrial, e não

faz metade do que a gente faz aqui. Mesma coisa na cozinha, que esta sendo meu

problema. Eu demiti a chefe de cozinha, a gente estava muita reclamação. Ela era

cozinheira, e se eu trouxesse alguém de fora para ser a chefe dela eu ia ter problema,

ela não ia aceitar. Ela cozinha bem, sabe como é que funcionam as coisas, vou dar a

oportunidade para ela. mas assim, eu não sei de nada sobre quem esta trabalhando, em

que horário. quem administra isso é o chefe de setor, ele que decide e administra da

forma que quiser, ele demite, ele contrata e ela não conseguia se adaptar a essa

realidade. Por exemplo, terça feira vamos fazer pedido ‘Vai precisa de lula?’ ‘Não

tem bastante, lula tranquilo’ Sábado, duas da tarde, começando o movimento do

restaurante me liga ‘Acabou a lula!’ Você esta me tirando?. hoje então eu estou

investindo no capital intelectual. Eu troquei todas da cozinha, a pessoa mais antiga da

cozinha tem 3 anos. A comida é ótima, mas não estava suprindo a realidade, por que a

pessoa não tinha mais onde reclamar. Eu fiz um teste e isso foi fabuloso. eu estou

reformando todos os quartos, o primeiro quarto que eu não reformei por que eu não

quis por que deu uma mancha no teto por infiltração e aproveitamos para fazer geral

nesse quarto e só faltou o rejunte das pastilhas do banheiro, eu falei para não fazer

para fazer uma experiência. O quarto tem muita reclamação, do rejunte, e antes não

tinha reclamação nenhuma, por que a pessoa não tinha como comparar. A pessoa

entra no quarto e repara o rejunte novinho, branquinho, pintura e tal, espelho

rejuntado em volta, e olha e se pergunta por que não fez a pastilha, e aí tem a

reclamação. Esse quarto tem reclamação todas as vezes, falam que tudo foi excelente

mas reclama da pastilha do banheiro. Experiência comprovada, quando esta tudo uma

maravilha, foca em uma coisinha. Que é o que aconteceu na cozinha, eu não tinha o

que reclamar. Todos os avanços que conseguimos na cozinha foi por causa dos que já

estavam, mas eles pararam e os outros setores avançaram, a pessoa não tem nada de

reclamar de recepção, de limpeza de nada, mas a cozinha parou então foca na cozinha.

Cortei todo mundo.”

Entrevistador: Você pensa em quantos quartos você vai dar para cada canal por

causa dos custos?

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Entrevistado: Eu só consigo ter uma noção baseada no meu operacional, na galera que

esta aqui trabalhando. eu queria ter 20 canais, que daí a gente contrata aquele que

unifica com o sistema, [gerenciador de canal?] É. Mas o meu operacional não vai

conseguir, ele precisa entender. hoje eu tenho uns probleminhas que eu falo ‘não

acredito que vocês fizeram isso’ A experiência que eu tenho eles vão ter adquirir. Eu

passo tudo para eles, mas tem coisas que não adianta, eles querem aprender da forma

mais difícil, errando que se aprende, querem sentir na pele. Quero ter mais canais?

Sim, mas tudo vai depender do meu capital intelectual aqui. Nós aqui estamos

fabricando os próximos gerentes de outras pousadas, por que aqui no litoral ninguém

trabalha assim, ninguém consegue ter essa visão, ninguém consegue pensar la na

frente, eles querem pensar agora e decidir agora e acabou. O Gerente anterior. da

mesma forma que eu o conheci, ele foi embora, não mudou nada. Eu quando assumi

já comecei a mudar e todo dia era uma coisa diferente, uma coisa nova.”

Entrevistador: O último assunto é a parte estratégica, todos os indicadores de hotéis,

tempo de estadia, diária média, REvPar. você já teve que por exemplo negar algum

cliente?

Entrevistado: A gente tem aqui um flag que as vezes a gente usa. [clientes que tiveram

problemas?] É”

Entrevistador: Então todos esses dados, cancelamento, walk ins, ocupação, você

registra eles e você usa eles para alguma estimativa?

Entrevistado: Não. A única coisa que eu me baseio é na parte da venda. isso já é

função da recepção, é semanalmente, todo dia quase. ele se baseiam para vender esse

final de semana no final de semana do ano passado. A gente já sabe quando foram

fechadas essas reservas, a ocupação do ano passado, quanto tempo antes, que é nisso

que a gente se baseia. E aí a gente precisa ver essa estratégia. Se for fechado bastante

tempo antes, então a gente ja tem que estar mais adiantado, já com o valor pronto,

com a faixa de preço pronta. No inicio do ano a gente já faz, é rotina.

Entrevistador: Revpar, ele te influencia de alguma forma? Você faz essa análise?

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Entrevistado: Não, não uso.

Entrevistador: As outras áreas do hotel, restaurante bar, você pensa nela na hora de

vender? Eles também compõe a receita do hotel também, as vezes até com uma maior

margem.

Entrevistado: Eu acho que assim, a minha gestão é muito recente. Então eu tive que

começar de setor por setor para ir fazendo as coisas acontecerem. E a principal

ideologia, por exemplo a gestão anterior que sempre chegava pros donos do hotel e

falavam que precisava de comanda eletrônica. ou seja faz isso pra que a gente

melhore. Eu fiz o contrário, eu melhorei com as ferramentas que já tinha e aí provei

que a gente pode fazer. Quer que a gente melhore, põe a comanda eletrônica. Mesma

coisa com a piscina aquecida. Desde que eu entrei no hotel ele falava que precisava da

piscina aquecida pra gente melhorar, e nunca foi posto, e agora que a gente colocou.

eu provei que a gente estava fazendo tudo isso sem piscina aquecida, então imagina

com a piscina aquecida. Então essa ideia de usar as ferramentas que tem para

melhorar, com aquilo que a gente tem, é o principal. Então o que eu prefiro fazer, é

ter o restaurante funcionando, que seja simples, mas que a pessoa se satisfaça quando

escolher, de acordo com os valores que a gente apresentou. Eu não faço venda do

restaurante por exemplo, é complicado fazer venda do restaurante. não tenho estrutura

pra isso ainda. restaurante pra gente ainda é aquela coisa do hoteleiro que é um mal

necessário, tem que ter. a gente luta pra trocar figurinha. a gente esta indo bem, não

ficamos no vermelho nenhum mês, diferente do que era no passado, a gente tinha

prejuízo com o restaurante. e aí eu acho vai da estrutura, por que eu acho que pra

movimentar bem o restaurante a gente precisa vender pra fora, e a gente não tem

estrutura.

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APPENDIX 4 – ANALYSIS THEMES

1 - Awareness of Revenue Management

2 - RM Core activities: execution, challenges and opportunities:

Historical data: collection, interpretation and usage

The importance of forecasting

How forecasting is done

The pricing process

The application of different rates for different segments through rate fences

The value of cancellation policies

Understanding overbooking

OTAs relevancy and dependence

3 - Understanding Coastal Hotels

Establishing specific characteristics of the region studied

Seasonality in the context of coastal hotels

Coastal hotel guest’s needs, expectations and motivations (Segmentation)

4 - RM, Fairness and Coastal Hotels

Differential pricing and fairness

Overbooking and fairness

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APPENDIX 5 – INTRODUCTION EMAIL IN ENGLISH AND PORTUGUESE

In English

(Please, I kindly ask that this email be forwarded to the manager or owner of the

Hotel. Thank you!)

Dear (a) Manager of the HOTEL X.

My name is THE AUTHOR and please excuse me to introduce myself and explain the

reason for the contact.

I'm studying a Masters in Hotel Management (Hospitality Management in English) at

the Institute of Technology in Dublin, Ireland (Dublin Institute of Technology - DIT

www.dit.ie/hospitalitymanagementtourism), and in order to graduate I should conduct

a research project in coastal hotels in the area of Revenue Management.

Since I am Brazilian, and have an immense affection for the region as I lived much of

my life on the beaches of the North Shore of São Paulo, I chose to focus my research

on coastal hotels located in São Sebastião, so I’ve identified that your hotel is a

potential participant.

The objective of the research is to understand how Revenue Management techniques

are being used in this sector to develop guidance and support that in the future can

assist managers and hotel owners in maximizing revenue.

Despite living in Ireland at the moment, I will be in São Sebastião in July and August

to conduct this research. Thus I would like to invite you to be part of the respondents.

It will be a conversation related to the field of study and that should not take more

than 60 minutes.

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The period that I will be present in São Sebastião is from 20/07 to 30/08. The "chat"

can also be conducted in a more convenient place for you but I will be fully available

to go over to your hotel.

It is very important to understand that this research is for academic purposes only, not

commercial, and the information collected will be treated with all integrity and

confidentiality, I am giving you my word. Obviously, at the conclusion of the

proposed research to Feb / 2016, final results and conclusions will be available for

consultation.

To schedule our conversation just answer this e-mail telling me what day, time and

place or if you prefer contact by WhatsApp, or even call me at any time (Ireland

number). Feel free also to send me a message via Skype, LinkedIn or Facebook.

Right now I am very grateful for your attention and looking forward for our

conversation!

Regards,

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In Portuguese

(Por gentileza peço que esse email seja direcionado ao Gerente ou proprietário do

Hotel. Muito Obrigado!)

Prezado (a) Gerente do HOTEL X.

Me chamo O AUTOR e peço licença para me apresentar e explicar o motivo desse

contato.

Estou cursando um Mestrado em Gestão Hoteleira (Hospitality Management em

inglês) no Instituto de Tecnologia em Dublin, Irlanda (Dublin Institute of Technology

– DIT www.dit.ie/hospitalitymanagementtourism), e para conclusão do curso devo

conduzir uma pesquisa de campo em hotéis independentes na área de Gerenciamento

de Receita (Revenue Management em inglês).

Como sou brasileiro, e como adquiri um carinho imenso pela região por ter vivido

grande parte da minha vida nas praias do litoral norte de São Paulo, escolhi focar

minha pesquisa em hotéis e pousadas independentes localizadas em São Sebastião,

escolhendo assim de forma aleatória o seu Hotel/Pousada para participar do meu

trabalho.

O objetivo da pesquisa é entender como técnicas de Gerenciamento de Receita estão

sendo usadas neste setor para desenvolver orientações e suporte que futuramente

possam assistir gerentes e donos de hotéis na maximização de receita.

Apesar de estar morando na Irlanda no momento, estarei no litoral norte de São Paulo

nos meses de Julho e Agosto a fim de conduzir tal pesquisa. Dessa maneira gostaria

de convidá-lo a fazer parte dos entrevistados. Irei conduzir uma conversa descontraída

relacionada ao campo de estudo e que não deve levar mais que 60 minutos.

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As datas que estarei presente no litoral norte de São Paulo são do dia 20/07 ao dia

30/08 no horário que seja de melhor conveniência ao Sr.(a). O “bate-papo” pode ser

conduzido também no lugar de melhor conveniência para o Sr.(a) porém estarei

completamente disponível para me deslocar ao seu hotel.

É muito importante o Sr.(a) entender que essa pesquisa é somente de caráter

acadêmico, não comercial, e as informações coletadas serão tratadas com toda

integridade e confidencialidade, e estou aqui dando a minha palavra de confiança.

Obviamente, na conclusão da pesquisa prevista para Fev/2016, os resultados e

conclusões finais estarão disponíveis para sua consulta bastando apenas entrar em

contato comigo para eu encaminhar uma cópia do meu trabalho completo.

Para agendar a nossa conversa basta responder esse email me dizendo o dia, horário e

local ou se preferir entrar em contato por WhatsApp, ou até mesmo me ligar à

qualquer momento (número da Irlanda). Fique a vontade também de me enviar

mensagem via Skype, LinkedIn ou Facebook.

Desde já fico muito agradecido pela atenção e conto com a nossa conversa!