Occupancy first, ADR second: revenue management for independents

We do not decide the prices. Never. There's only one deciding the price, and that's your end client and your guest. Hey, everyone. Today with Rokia Ensel, owner of Refgen, former group director of revenue management for Sikos. Worked with all the big brands like Hilton, Marriott, IAG, and now focused on independent properties as a revenue management consultant. So hi. Good afternoon. Great to be here. Thank you for the invitation. It's really good to be here. Really good to have you here. We will touch on on a few topics. First question, maybe you can introduce yourself even a little bit better than what I did. What did you do? Where did you where were you focused on? What do you like to do in terms of revenue management? Thank you. Oh, well, in terms of history and where I come from, originally coming from operations, worked or started in in F and B, working in restaurants, working in hotels. I was general manager, for Dutch hotel chain, Sharma hotels. And afterwards, I made the jump to revenue management because I really enjoy playing the board game of revenue management, so to say. Started in Amsterdam, worked for a couple of hotel operators, before starting, my last journey in in in, Cyprus hospitality. As you mentioned, a lot of brands, managed there. A lot of hotels was responsible as group, director of revenue for roughly 45, 46 hotels, and ranging from, like, West Western Europe, in in in The Netherlands, in in Brussels, in in London, Germany, Scandinavia. So lots of different markets. And up until now where I started my own company in revenue management, but then for the unbranded properties, really independent properties. And really from the belief that I think the the smallest property, so roughly the the hotels ranging from 10 to, let's say, seventy, eighty, rooms, can benefit the most from experience or revenue management, channel management, distribution, etcetera. It's like playing chess, but if you start for the first time, you can use a little bit of help. Yeah. But that yeah. Yeah. Exactly that. And and and, and although there is a lot of knowledge sitting in, with owners, with the unbranded properties, it is always good to have some experience, what channels do you use, what tactics do you use, what strategies, do you apply, what to avoid. Never go to book an account genius, for example. Booking.com will be very happy with the statement. Sorry. Say that again? I said booking.com will be very happy with the statement. Oh, they know. No. I think, especially when, I I found it a very nice energy, to to to bring it into board games, because everyone can play board games. I think the question here is, are the board games they play with the bigger bigger brands, is is it a different board game than they play with this with the small ones, or is it actually the same, but it's played differently? It's a really good question. I think with playing a board game with the bigger brands, you have the instructions on paper. You know exactly what to do, what what you can't do, what you should do, what you should avoid, what is forbidden, where you got penalized for. Whilst in the unbranded world, it's like an experience every single time, even for myself. I mean, I'm I'm used I started in the unbranded world. I moved to chains where I always thought, oh, that's so boring because everything is already done, like, a number of times, which is true, but you have much more time for other elements and really focus on strategy instead of trying to connect channel x to channel y as the example. But the unbranded world is so much more fun because it feels really like an entrepreneur. I always struggle with the work, but you know what I mean. It it it is it is really that element that is so enjoyable, and, you really need to do it yourself. Is it then, because you have, of course, have a lot of experience when stepping in this unbranded world. So you have your backpack with knowledge, which I think it always makes a little bit easier to exploit, those never exploit grounds in this in this in this specific area. Can you imagine that it's gonna be pretty terrifying, for people if they don't have that that backpack and they they are in the unbranded world, which basically can be a world west because they are not really rules or not really set rules, that is that is pretty terrifying for them to step in this. Yes. But at the same time, also very easy because you can just do what you want to do and work together with who you want to work together with. So, yes, it can be terrifying. At the same time, what you don't know, you don't know. Right? Oh, absolutely. You know booking a I mean, a lot of as as the example I use a lot of times, a lot of hotels are only connected to booking a common Expedia. Do you need more? Is the is the simple question. If you don't know other partners, you're not going to connect with, so it's not such a terrifying world. If you have the experience of the branded side and you want to and then this is my always my problem, because I know how it works in the branded world. You want to connect all those channels, for the independent hotels as well because you want them to benefit from the same exposure across multiple channels. But can you answer the question you just said? Like, do they need it? Depends. Depends on market. Depends on country. Depends on source markets. Depends on hotel size. Hotels between 10 and, let's say or anything until 20, No. You can be fine with booking.com, and Expedia. If you are in a countryside, market, you need other, other channels as well. Are you in a city center? Fine. City center up until forty? Fine. Then it really depends on the the the demand generation in general. Right? Yeah. And how much you can cover from the total demand. But at least that's what I always say. You have a you have a certain balloon, and you need to capture a certain part of the balloon in order to to fill up your property. If the balloon is smaller, you should make sure that you can cover a bigger part of that balloon. I think that's also what you would what you tried to say here. But why do why do bigger hotels need it? Because they have a lot of exposure. They have a big name like Hilton Marriott. Why why would they need it? Different segments. I see I mean, there are, majority of hotels that I have worked with are more than roughly 120 rooms. So you speak about the 300 bedroom. You need multiple segments, multiple different areas of of you need the sales manager, to fill up a big portion of your of your of your inventory as well. So it's about what type of segments are coming into your hotel, what do we need to fill up, what how many rooms can we fill up with solely booking that common Expedia. It reaches a certain maximum Yeah. Across the month. So you need a lot more, channels, segments, to fill up a bigger hotel. Yeah. Again, you need a bigger piece of the balloon in order to fill up the size of the property you have then. Correct. And coming from from an investor side, is there a difference? Like working for a group of investors having properties or helping independent properties? Yeah. I think there is a big difference where from an investor side, I think there is there is a lot of focus on numbers solely, where from a not investor, let's say, family owned business or it's more there are much more emotions coming into play. And I think those are two typical key differences, for the business. And and why is that, do you think? Because if you have a family owned business or you have inherited it from your mother, your father, or whoever, or you started the the the company yourself, I think there is a lot of emotional aspects of why this is you are really attached to the property, and that makes it so much more emotional whilst an investor investing in a big property and does that for the fourth time. It's about the the return on investment, that they find much. It's about the number on the paper at the end of the day. Yeah. Whilst and this is the weird thing. The family owned business also needs to make money. Right? I mean, why why would you otherwise run that yourself? But there is much more emotional aspects to it. Plus, I think family owned business, you work yourself in that property, makes it much more emotional attached, whilst an investor, most of the times, sits in an office not really working in the property, having people working in the property there. Oh, you you have this I'm not sure if it's a myth or it's actually the truth where I think it was an airline which didn't allow their, own employees to fly, with the airline itself because then they were were emotionally attached to the actually the service and the quality they deliver. And they just want to have people do it based on numbers. Yeah. And, again, I'm not sure if it's a myth, but it's I think it's closer to to the reality of investors, which, in my experience, sometimes just ask, oh, what why can the ADR not be 20 higher? Or why why should the maximum price not be 1,000 instead of 600? Well, with a Yeah. Family owned businesses like, oh, yeah. We ask now 130. I'm not really sure if that's really worth it. So maybe we should other way around or the other way of the spectrum. Right? It should be $3,400. Yep. Because I invested so much in it, and it's worth that much. And that is that is also the emotional aspect. What what do you think has a better judgmental of the quality of the product? I I think it should be always a mixture because it can never be solely about the numbers. It can never be solely about emotions. And and how would you how would you rate it? Like, if you if you speak to to one of your, your clients and you have to do an exercise, hey. What's what's actually the value, the maximum value, or the minimum value of the property? How how would you do it? Mhmm. Data. Solely data driven. And then The data will tell you the data will tell you what what the potential can be, is, or will be. I don't I don't think there is one set of answer. Would you then use the data to draw guidelines and then, I mean, emotion will be involved anyway, especially when it's a family owned business, to to show them one thing that is based on data and then let their own thoughts be there? Because at the end of the day, they will they will try it right. First, no. I would I would always ask first on their own opinion and their own because then you know where you need to work towards to, if that makes sense. And let's do the data exercise afterwards. Yeah. Have you ever experienced that you need to to widen the gap, like, between minimum and and maximum? And that they had a opinion about that, and you actually think, oh, it maybe should be a little bit less. This is this is regardless of investor, regardless of family owned business because we have this in the investor world where people have a high opinion on no. No. No. We should not sell below a €100 or a 150. But similar to higher numbers or never never, by the way, a maximum number. But but that is there there is no difference between that because there are always people that have a certain knowledge, why they feel that Yeah. You should go left or right. Yeah. No. True. I'm I'm just curious to see if there if there are differences in those kind of things because, it's like overvalue and undervaluing at one point. And and I think both of them are based on emotions very often. E even on the investor side, it sounds like it's also emotion based because they value themselves the product higher than it maybe is in the market they are in. Because at the end of the day, that's why I always tell to to customers, this room is never changing, unless you do a refurbishment, of course. But there are a lot of other factors which are actually putting the value on that room, which makes it harder to just This is always well, this is always the interesting topic. Right? What makes the room more expensive other than demand and supply? Right? Let's not go into that topic because that will be endless, but but just a simple 20 square meter bedroom. Yeah. Tell me why is And why and why should 22 or 24 square meters suddenly be 50 or €100 more expensive? Why do you think? Or shouldn't be? I don't I don't believe no. No. No. I don't believe it. I I believe in the small steps. I believe just run the occupancies first and rate comes after because most of the times, the majority and this is always how we determine room room type supplements. And no. No. No. It's €50 on top of the standard rate. No. No. 100. 150. And first, we need to realize and their data comes into play, we need to realize, oh, we are not selling this room or room category at all. Why is that? And it's the the most well, this is, I think, the the only reason is supplement pricing. Yeah. Because if if the other rooms are selling, there is apparently a demand. Yeah. However, then there is a specific reason What is the right supplement then, for that room type? And and that Until we're starting low, achieve at least 80% occupancy in that room type, and then increase and increase and increase until the moment you see that number deriving from what you expect. Would you say because I'm I'm a bit triggered by by the fact that you use occupancy. Would you say there is a difference between what independent properties and investor or brand properties value more? Where are they more focused on? Is it occupancy, or is it ADR? And is there a difference? I don't think there is because both parties are dealing with banks, are dealing with with other parties that want to see return on investment. And return on investment starts at ADR level because everyone I mean, in essence, in every market, in every corner of the world, you should be able to run a 80% occupancy. So the differential of what, where profit will be higher or lower is because of ADR levels. So to answer the question, I don't think there is a difference where it comes to unbranded properties, family owned businesses versus investor side. Everyone will be focused on that ADR level. Yeah. And but does then occupancy make the ADR or makes ADR the occupancy? Well, the and this is where opinions differ a lot. I know. But I I well, I mean and and there's no right or wrong because when I say x, someone else will say, no. No. No. No. That's that's incorrect. But I I still think that you first focus on occupancy and making sure you showcase growth. You are selling whatever you are selling. And regardless if that is about hotel room or an airline ticket or you need I mean, if no one is traveling, what's the point of a certain rate level? If no one is staying in your hotel, what's the point of a certain rate? So it is always about occupants. Occupancy tells you if it's right or wrong, and ADR is then the measurement where you move up or down. Yeah. I I I I think I share the same. I know that that the opinions differ a lot. I think if we go back to the chess game, you you can play chess a little different ways, and you can win in a little different ways as well. But but for me, it's it's very similar. Like, like, occupancy tells you if you actually if if if the value you put on your room is actually converting into an actual cell. Well and, of course, on its own, it doesn't say much. ADR on its own doesn't say anything because you can have a €400 ADR with one roof sold. You you can have 100% occupancy with a €10 ADR. I mean, it it doesn't say much. However, it revenue management game introduction is. Yeah. It is. And then and then to the bigger brands, because you already said that bigger brands work with more restrictions in in words. Hey. You can do this. You cannot do this. You get a punishment for this. You can would you say that makes life a bit easier or the other way around? Like, it makes also life bit harder because sometimes I would like to go left, but I'm not allowed to go left. Well, the interesting part of this one is I mean, with in my time with Sykes, we did a lot of of, refurbishments also from an unbranded property to a branded property where and especially if unbranded properties utilize a lot of the tactical promotions, for example, from booking.com or from Expedia, the member aids, the genius, the promotion x, promotion y, promotion z. You cannot utilize that in the brand new world at all. Zero. Zero tolerance as well. I mean, Marriott will penalize you. Hilton will penalize you. Moving from unbranded to branded and expecting a better outcome in performance is sometimes not the reality and even where even the big brands are not able to bridge the gap for moving from unbranded to branded. And why is that? And that is how impactful well, that is how impactful booking.com production on Genius, sometimes is, or the production on, mobile discounts is. And we can hate it or like it, but that is sometimes where the bigger brands feel, no. No. You're you're we're doing a much better job without all this, which I highly stand for because I I truly would not advise anyone, joining these kinds of promotions because you create a very weird marketplace yourself with the parity issues. Well, because when you when you sell, I don't know, on Agoda with a 10% discount, Agoda will resell this to a partner of Agoda. And that partner of Agoda will resell this to booking.com, where you suddenly see in your screen, there's a partner offer for booking.com for your property, which is €20 lower. Yep. I think this is a huge create this, you create this yourself. And I think this is the biggest struggle where where people get very annoyed by by those platforms. And they and and and UC is a lot that they don't understand where it's actually coming from, which makes sense because it goes to a lot of different places before it ends up when you're played again. And if you don't know the infrastructure behind it, then it's really, really hard to figure out where things are actually coming from. But with why would people use, genius? Why the end client would use Genius or why hoteliers The hotels. Use? Because for the end client, I get it. It does. It does. Well, it does what it promises to do. Where I feel and now I need to be careful. I feel that GMEI's program delivers more, where Expedia is more in the resell environment. I do think with booking.com, you are receiving a lot more volume, And you can enable or disable it with booking.com. You can, Yeah. Disable the the that they resell their, genius rates, for example, to their partners. Yeah. Because otherwise, you're just cannibalizing, whatever you already are doing. With Expedia, with Agoda, and with any other party, this is very different, and there the there it gets very funky, weird because it just the rates disappear and suddenly come back in most weirdest places. Yeah. And and for for big brands, why why would what would be the the biggest benefit to brand your property? To to sorry. Say again. No. From unbranded to branded. What would be the biggest benefit? Commission, brand delivery in general, and all the pros that are attached using, I mean, you get so much awareness positively from becoming a Marriott, a Hilton, an Accord, what's whatever, type of brand. You get so much more loyal guests. And loyal guests, of course, on the long run spend much more, than the the single visit visitor from from booking a con, let's say, like that. So yeah. Would let let now we're gonna make a jump to another topic. But, is it easier to forecast when you're part of a brand than when you are unbranded? Are you saying this with a certain statement? Because I would not honestly, I would not know why it would be easier when you are branded unless you're targeted at the systems you're able to utilize. No. I think I think I think my question is more triggered by the fact that you say, hey. You might have more loyal guests. And I know that it's very hard to to to see when those guests are coming back and which specific area are they coming back. But having this pool of of more stabilized, a more stable platform than going up, down, up, down with all the cancellations we see, now and then on booking.com. Because I still believe that that the cancellation rate on booking.com is much higher than any other platform, which in that specific sense makes it more easy to do a prediction when you have more stable, reservations. So I think it's more coming from from that specific point of view. Maybe we can get get back to this question in general Yeah. Later. I I want forecasting in general. Just just a quick tip for everyone. How would you start? Where do you start with making a forecast? Because people tend to make a forecast based on a crystal ball, and they are like, hey. I have this this revenue now. Next year, I want to do plus 10%, and they call it a forecast. Yeah. Actually, it is. Starts yeah. Well, that is that is where the budget comes into play. No? I mean, it all it all starts with the budget and it's and and your budget process or your forecast process, depending on on on how much or how far you look in advance, We'll start with the with market analysis and market expectations and what is that expectation. Do we have a VAT increase in in The Netherlands again next year, or will the VAT be lowered? That's not real. But that all influences what what you are going to expect, in terms of rate values, what what what well, the war in in in in, in The Middle East is is also, impacting travel in general where groups are canceling much more. Maybe there is less group demand next year. So that is your starting point, where it comes to, where to start first, if that makes sense. Yeah. I think the doing and the license in general, starting what what it is expected behavior is one thing. And then, of course, there are parts which are, I think, slightly less predictable. I think I always find it harder with groups, with group sales in general because sometime of course, you have repeatable groups. I mean, those are pretty easy. But when do groups actually start to come in? Do they actually start to come in? And groups in general is more like a you you do you do a bid on a group because they request multiple, offers. But it's like a like a blindsided bit on no. You know, you don't know what anyone else, like, offered them. Of course, that that still depends a lot on the market, how what what your take on the market would be, how far they need to go with the offers. But there are a lot of there's a lot of flexible parts here. Yeah. But but I I I think touching on groups, I think per market, you roughly know what you can expect in terms of rate values. I mean, if you're outside, I mean, take Amsterdam as the example. You know what you can expect rate wise around Schiphol area. You know what you can expect in Amsterdam city center if you want groups anyway. But, so from that angle, it's about the expectation of that market specific. And then does that match your expectation on your own rate, whether or not you want to accept or decline, the group request in general, if that makes sense. And and is it do you think it's easier for, for bigger properties, like, to to to forecast or for independent properties? Because there are there are Then then you mean the smaller properties or the bigger. Properties? Yes. Yeah. Not so much the independent Let's say let's say between a 30 room or a 130. I think it's well, it is different. It is different forecasting because with a 150 bedroom property or 200 bedroom property, you have much more segments to forecast, where a 30 bedroom property solely relying on booking.com and Expedia. So it's literally transient business in general. But that same transient business in general, you apply for that bigger property as well. So that is equal forecasting. But then on top of that bigger property, you have the expected amount of groups. What are you going to expect in terms of groups? How many requests have you got, and what is the expectation on will it convert or won't it convert? For for a bigger for the the the bigger properties, how would you start? Would you start with, like, the trenchant with, like, the more, in my eyes, more market focused? Or would you start with the groups, corporates, and and all the others? Yeah. Groups. Groups and well, I I I always used to forecast in three layers, which is then your your fixed blocks, like the crew type of of, of blocks that you have. You have your group's expectations, and you end up with your with your transient because a lot of a lot of a bigger part of your forecast is determined by the fact whether or not you have those blocks anyway in your in your hotel, and and it results as well in, oh, I have humongous amount of groups on on Saturday, the the, I don't know what, of September. I need to up my rate there. So your expectation on the transient side, when it comes to ADR on that specific day, will increase as well. Yeah. You have to it's like this this game you have, like, a like a ball and you put in, like, the bigger balls first and the smaller ones, and then you fill it up with sand. And, basically, sand is like the the trench in business. And some days you need more, some days you need less, and that will determine the the ADR you set. Right? But you can turn that around as well. No? I mean, in the end, if the expectation on transient is that strong, do you want groups? But would you but but but you first said that you want to do the the the groups and and stuff and then Because you contract them in in much more in advance. Right? But it and this is and this is about where do you start when do you start forecasting? Are we forecasting in, from today until three months in advance, or am I forecasting for next year? There's a big difference because looking into next year, you only have your events that you can rely on. Other trends are not visible just yet, Only the the the big. So for those dates, you know, I don't want groups or I only want high paying groups. Yeah. And indeed. And, for for the smaller ones, but it's more focused on trends. It's more focused on on a on a market trend in general. Yeah. Do you feel that, that a lot of smaller properties actually do forecasting? No. And what do what do they do then? Do they or do but maybe they don't do anything. The ones I have seen, I've not come across a lot of properties unless it is, like, a hotel group of smaller hotels. They do expect they do expect a forecast, but the independent family owned businesses or self owned businesses often do not forecast at all. But why do the smaller groups forecast? Because they want to have an expectation on the future. But who wants to have the expectation? Well, someone within the company wants to have an expectation. Is it then is it then very often the owner or one of the investors maybe? I think I think and and I and I I think it's multilayered. I think finance wants to know the expectation as well. What what what is the expectation on on on the future, and are we able to to pay the costs, pay the rent, pay whatever we need to pay? And a CEO wants to see that as well, but wants to most of the times, wants to see it just, where you say that. Yeah. More broader Yeah. Across the whole group. No. I'm looking forward. You need to cut this. That's fine. Consolidated. Thank you. Ah. He wants to see the consolidated view, instead of properties individually, I think. And but then if I maybe this conclusion is very wrong. But, would you then say that the properties which are part of a structure, and a structure, I mean, having actually set different departments, will most likely work with a forecast where the family owned businesses, where everyone does everything, basically are going with the flow. Yeah. Got it. And would you then say they need a forecast? They should need a forecast. Why? And and and this is maybe my con. I I don't know. But I would want to know what the future will bring and how my costs then would be spread or it makes it makes a lot of stuff so much easier to plan or schedule your cleaning and how much cleaning do we need. What what will be the end result. But at the same time, you're able when I forecast now for that same two months, you're still able to take a steer on the potential end result, where if I, tomorrow, look back on past months, that is something I can't change. And let's Do they actually look back? I don't know. Should they look back? I do think. I think evaluation Everyone everyone regardless if we speak about hospitality or your own behavior, everyone should look back and learn from what happened. So, yes, hotels should not on a daily base and a for a full day, but a moment of thirty minutes or an hour, look at their results and plan what to improve for next time. Then maybe this is a bit of a tricky question then, But do you think that everyone has the tools and the skill sets in their backpack in order to actually look back and take a learning from it? No. Because I think No. As in no as in have everything in their backpack. No. Because you started once being an entrepreneur and learning as you go. Right? I mean, I've I've done a lot in my life, but, made the jump in November last year being entrepreneur and starting this company, and every day learning again, like, we should tackle this differently next time. So and every entrepreneur will feel the same. Everyone has to know you will never have that experience or that backpack filled with everything you need, but that's the joy as well. I mean, that's the that that that is the right. But, like, for for my feeling, making a forecast gives you the ability to actually optimize what's gonna happen in the future. And, therefore, I think it's really strong if people can actually do it. However, I also have the feeling that a lot of people, they might be able to do it, but they don't know how to act on it. So they might see something happening in the future, but they don't really know how to act on it. And if I look into, because once we we did the studies about how many people in Amsterdam do actually actively change their prices. And then what you see is that, of course, all the bigger brands, they're actively doing the pricing. And I mean, actively is not only, like, a month before arrival. It's also a bit further in the future. However, what you see a lot is that people only start to take action two weeks before arrival because then they actually see the the pattern where it says Then the panic starts starts to kick in. And they are really focused on that. And I think you said it in the earlier stage. What you don't know, you don't know. And I think this this procedure of what you don't know, you don't know really applies, when a market is slightly changing. So if you would know, you maybe start worrying, but at the end of the day, everything was still gonna be fine. However, now all markets are changing slightly. And I had a conversation lately where, where the lady said to me as well, like, we are not really used to to big impactful changes in our market because there was a growth year over year of a few percentages every time. However, if you speak to someone who's doing revenue management in Turkey, they have inflation rates going up, going down. Like, the market's constantly changing, and they are really there to adapt on what's actually happening. Where here, we didn't really have to adapt. We're just, like, step by step growing. And what I feel now that people now starts to get a little bit worried because the results are not coming in automatically anymore, what they were expecting before, which might be a very big shift in the fact if they're gonna start forecasting because now there's actually something to optimize, to need to optimize in order to bring the same results as the years before, where the years before, it was like it's like a it was like a stare. Like, oh, you you just walk upwards. Yeah. But it it it was I mean, post COVID, it was only improving, improving, improving. Right? Yeah. Only because of the VAT uplift, suddenly, The Netherlands also reaches a certain ceiling. Yeah. If you look now at London, for example, I think London, also suffers from from the Middle East. Yeah. Especially the the more high value properties, they had a lot of Middle East guests, and now they start to to suffer a bit. Or at least the results are not coming in that easy as the years before, where now actually people have a trigger to search for a way to optimize instead of, oh, it will be fine at the end of the day. So why should I look already in the future? Because, it's proven year over year that the results will come anyway. And I think this is one of the first years. And maybe you saw it last year in q one a little bit. But this year, I think you you this is the first time we actually saw that results are not coming that easy. And, of course, it's also because of the VAT and the the net value has been decreased because we pay more tax. But it's really interesting to see that shift. And and when making that shift, especially for the for the properties you work with, what would you advise to them, in a way of forecasting? Where where should they start? Like, where where can they start? Do not perceive it well. I think a lot of people make forecasting as well very big as the big rock that they need to get over, and and and they make it so big for themselves where it's just just start. Just look at days and start where filling in your expectation of a certain day. And if you truly have no clue, look at the rates that you're selling for. So how would that convert into what ADR? And fill it in. Do it once. Look back on it, on what you filled in a month ago versus the reality. See where it went wrong. Were you too optimistic in the rates? Were you too optimistic in the occupancy? And do it again and do it again. Because even I mean, I've done a million forecasts in my life. Every property we start with is like a new forecast, a new we have also no clue. We have the experience of doing it, but not the experience of the actual property. So So also learn learning is on the right. Right? And and and we discussed this in in another call earlier where actually learning along the way, at one point, you get more information than what you had before. And when you have more information, you can basically review what you actually did. Yeah. And along the line, we'll get better and better. And and then the the I think the big question always rises, what is a good forecast? Because, people sometimes think that a forecast should be within one percent of the end result, three months before arrival, or half a year before arrival. I mean, if you know someone who can do that, then please let me know. Would would be Every everyone always projects that in their company, we all always have it right. Always within the within the five the 5% is always the holy ground. Right? Yeah. I think it's really hard to be to be there, especially in And and maybe over the past years, it was just a little bit easier when we saw, like, year over year slight growth. But now we're going into more ongoing ground. I think I think it's getting a little bit harder to actually project this forecast because no one really knows what our market is doing. And I think a lot of properties, they don't have all the data of a market, and they they sometimes rely on what someone called to me an echo chamber. People are saying that it's gonna be, it's amazing at the company. Like, the market is saying, are we doing so well? Actually, maybe they don't even do that well, but they they just like, to the outside world, they always up with 10%, where you get at one point this feeling of like, you get this good oh, oh, shit. I I should do better. Where it's not the truth. It's just like the myths which are around you and and just basically gaslighting you at one point. And, into the into this this new world where I think for some people, it's a new world, where it's not really common to do forecasting and also to make a budget. Because my pro biggest problem with a budget is always you make a budget and then someone says based on a forecast, and then someone says, no. It should be 10% higher. It's like, yeah. But why why did it do a forecast? The point of a budget? Yeah. No. And that's that's also and may and it's I think a budget is very much related to a forecast in a sense. But why should people what's the difference for you between the budget and the forecast? It depends on who you ask, I think. From your interest? Investor. Well, I mean, for me, a budget and a forecast is is not so much different because the budget is just a very long term forecast. Yep. I mean and and in all honesty, I mean and also depending on who you ask because a lot of a lot of hotels forecast eighteen months in advance. Right? So they already make half the budget Yeah. Already in essence. Back to your question. From an investor point of view, is there a difference between a budget and a forecast? It's a it yeah. The budget should be an ambitious goal, where in my eyes or in the eyes of a of a of a revenue manager, interesting on your answer, by the way, then as well, it should be a a truly long term forecast. And, of course, ambitious, but ambitious with within reach. Not ambitious. Let's increase your goal with 10%. So I think that this is what what I struggle always with when making budgets. And because when you make a budget and you present the budget, then someone says it should be 10% higher. Just find a way to increase it with 10%. I mean, you can also ask me to increase it with 200%. It's also fine because I'm just gonna make it up. Yeah. And you're like, oh, but maybe I can put a little bit here. Maybe I could put a little bit here. And at the end of the day, to be fair, like, if you don't reach your budget and at the beginning of your year of the year, you did already know that you're not gonna reach the budget because you made your forecast. You had a certain expectation of what the market will look like, but someone told you it should be 30% higher, which surprises me almost a lot. Yeah. Because what I always feel is that and and this may be my point of view based on the budget because if you make a budget, it's not only across what's coming in. Because you also make a budget, your projected budget of what's the spend I gonna have on a lot of other things. And then my Correct. My question here is then in general to everyone, maybe they can maybe they can put a comment under it. If you increases your budget because that's what you wanted, but we don't think it's feasible and we have to increase everything because you say it should be 10% higher, are your cost by starting point also 10% higher than if it's related to each other? Like, what's what's driving the budget? Is driving the budget the cost you're gonna you have? The rent. And and The rental cost in in it often. I mean, look around and look into, hotel operations. Depending on what star level, what ambition you have for for your property, but your cleaning costs will always be in a certain range. Right? Yep. Your your expenses, if you want to do fresh flowers every day, it will increase. If you don't do fresh flowers every day, it will be the so a lot of stuff you can precisely forecast, or whether or not your hotel will be profitable depending a lot on on rental cost because that is sometimes that dramatic that a hotel property will never make money. Yep. Is that is is that also a difference between, working for investor company and, with independent owned properties, which I I Independent. I I think independent owned properties are often much more realistic when it comes to rental cost. And maybe some people will now say, oh, well, that's not true. But the ones that I've seen are more realistic within the investor world. I think they're they're that that is insane sometimes. And, like, in an investor world, but maybe it can be an assumption. I don't know. Is it that they also rent a lot, or is it that they also buy the properties? Say that again? Do they actually buy the properties and then start operating the hotel? Or, is it like renting the property and then Mixture. Sometimes you own the building. Sometimes someone else owns the building. Because that makes a big difference on, on on your budget. Yeah. Of course. Because the potential, and and the of course, really depends how much you pay, of course. I mean, it depends on a lot of different factors, but, the potential is gonna be completely different. And therefore, also, like, the budgeting is gonna be completely different. But then let let let's move into another topic. And and I'm very interested in this one because you worked what I saw in a lot of for a lot of different properties in a lot of different cities. Do you have a city where you're like, not not only forecasting wise, but also, just revenue management wise, is the hardest city to work in? The hardest city to work. Or the easiest? We can do both. The hardest? I think in the middle of nowhere in Germany, but Piedmont was the hardest because there is literally there's nothing there. They're literally booking 50 people are booking on booking.com, the property in in three months. So and it's hard because you really need to, to invest in where where for a lot of hotels and a lot of key cities, it's very easy to to to get hotel guests in because people book through booking.com and Expedia and your own website. In certain areas, you just need to find people or really be specific or people are booking you because of a unique building or a unique product that you have. But if you are not the destination, and the destination itself is not selling itself, that that is that is hard. Yeah. And and in terms of of competitive landscape, like, which which are there markets which are more for example, Berlin or Copenhagen or Amsterdam, which are much more competitive to each other? Like, the competitiveness is is much higher. People are attempting to be much more aggressive on pricing. Or does it that's not really London is is quite competitive. London, Amsterdam, Berlin as well. Berlin. Or it's just the correct Zurich is a is a real insane expensive market. Yeah. I find that one really, really intrigued about it. Yeah. Is it then in general that that the, like, the bigger cities is the case or not not for all of them? Or depends how many hotels there are? Yeah. Depends on supply. Yeah. The more supply there is yeah. I mean, I mean, I I the more mini markets you you create. Right? Because in the end, everyone looks at London as a market, but London is not a market at itself. It has the South Bank, the North Bank, the left side of the center, the right side. I mean, I I find London, like, very crazy as a market, especially now especially nowadays because it it relies on so many different, things, even more than than, for example, Amsterdam, I think. Because, I think with London, especially with the with the whole aspect maybe it's now even more with the whole ex aspect of, like, Brexit, of course, you had, but now with the whole Middle East situation where I think London might be one of the biggest cities relying on Middle East traffic. Paris? Yeah. Could could also be, but I I I think they're much more relying on the Middle East traffic than, for example, Amsterdam. Oh, yeah. Yeah. Yeah. Definitely. But that is that is also why I don't see and we might see that in in in future because the moment you say it, it will happen, of course. But that's why I don't see in Amsterdam that much impact from the Middle East conflict. Yeah. Then then I have always lost Only the group side only the group side is unreliable. Yeah. But transient wise, your your key source markets are around you anyway. It's Germany. It's Belgium. It's it's it's The UK. So they keep traveling. Yeah. Maybe it's only for, like, the five star properties high end that it might be a little bit of impact. Could be. Because the ability ability to spend bigger amounts of of money, I think, is a little bit ease. Like, what we see is a little bit easier for, for people from The Middle East. Not for everyone, of course, but for some. Then I I've always one one question. If we together are gonna start a hotel, first of all, where are we gonna put it? How many rooms? And how do we build a strategy? So where do we put our hotel? Where do we put our Copenhagen? Okay. How many rooms? 95. And do we do Don't ask me why. Do we do, events, or do we have a wellness, or do we have a restaurant? Or No restaurant. You get in. You have breakfast. Yes. But then exit the door. I would if if I would sorry? Self check-in? No. Reception. No. I'm I'm I'm too old school. I like too emotional, maybe. No. I like the I like the personal check-in. K. From a business point of view? You would go for self check-in. K. And where do we start? Like, how do we build our pricing strategy? Depending on where we are. In Copenhagen? Depending on yeah. But, I mean, Copenhagen is big as well. In the city center. In the city center. What? What were you holding? So I'm Parker, we are you we are price polite of. Of a tip sign. Alright. Let let me ask something else in between. Would it be branded or unbranded? Unbranded. Okay. Are we gonna do a forecast for the and the budget? Yes. We do. Okay. And how are we gonna start with the budget? Do we look at our costs first? Do we look at what's Top line first. Okay. So, where do we start? We start with the market analysis and where the the ADR levels will be sitting. Based on that, we we produce an ADR. K. Based on that ADR, we are deciding what kind of segments we need and what we are going to get in. Mhmm. With the 95 rooms, I would opt into some groups. No weird tours or whatsoever, but just a couple of smaller high end tools. Would we go for proper contracts? Yes. Always. But no Stavix. Yep. I would always go for the Lambix. Yep. So discount on bar. Yeah. And that can be aggressive. Right? Yeah. Yeah. That can be I mean, 15 plus percentage discount. It should be. K. As well because our nonrefundable discount will be 15%. Yep. And then, okay. We have this. But where do we get the data from the market from? Do we use, like SDR? Like SDR? Yep. SDR as as great market reports. And, of course, there are other data banks that can produce, but I have always liked and enjoyed the the STR market reports because they they give quite a good look into the future. Yep. So so I I think now we we are pretty far in I what I what me interest a lot is, like, we know what we're gonna sell, and we know what kind of property we have. And I think that's very important. Knowing, hey. What kind of property are you actually in order to to build this strategy? Because we already said, okay. We will be unbranded 95, some groups. We definitely go for corporates, because we need this 95 rooms. We can build a base from it. So I think I think that's one of the one of the steps for a lot of people. Get to know what what do you have, what do you need, and how to execute. And what do you have? I think for and here's the emotional part coming in for for my feeling. Because a lot of people are tempting to what do we have to to, like, downgrade it or upgrade it. So I think for sometimes for them, it's really difficult to actually say what do we actually offer, and what do I need to bring that offer to to the table. And and therefore, this is also this question because I'm really curious on how where do you actually start? Where can people actually start? What what kind of learning can they get from you and me putting a fixural property in Copenhagen? Because it it shows step by step where we actually will start in in this journey, which is for me really interesting. I think for a lot of people is really interesting because, there are not massive things. It's starting with those little little building blocks, but put them together. Like, make one big piece of it in order to, like, step up your game. As long and and I and I think this this goes for revenue managers, for owners, investors, because there is a misperception in this is that we do not decide the prices. Never. There's only one deciding the price, and that's your end client and your guest. Yeah. And that is really often and I and I see this in the investor world. I see this in in independent world that we are very tempted to decide what the price should be. But the only one deciding that is your guest. Yeah. And and and here's also about how do you react to this. Because I I think I I once said I'm not sure if it was an approved customer, that you can better react quick than than project wrong. And and I think this is what you see sometimes that they project, oh, we should do this, this, and this. However, if all the signals are on red and you cannot make up your projection, you should act on what you see. And and here we come again to the point, hey. We have a certain takeaway from a certain point and with this information. However, along the way, we get more information. Please take that information into consideration of revisiting your strategy because the strategy will never be 100% accurate from the start. And never be 100% right. And it doesn't need to be a 100% right Because the strategy is never 100% fixed and unchangeable because it will change. I I think that the it's again, and we started this with with with this as well. Like, if you play chess, you have a certain strategy in mind. However, you have to react how your opponents what your what what kind of moves your opponent does. And in this specific case, you have I think here is like a three layer playing chess. You have a certain challenge you have in place, so that's the the actual actions you want to put out. Then you have a market reacting, so you have to adapt to it. Because if you don't do it up to it, then your end client, they will make another decision than booking with you, which at the end of the day still decides your price. But I think the the biggest thing in Dunkirk referral, just just start somewhere. Start somewhere, little steps, and then, like, building those little blocks will turn into a bigger block. And at the end of the day And that's why and that's why looking back on the results booked, analyze, and improve or or set, like, goals for yourself is as important as we touched on, halfway this one as well. Because I truly I truly believe in analyzing the data. Let data speak, and let data tell you what you need to adjust, alter, and and fine tune. Yep. No. Definitely agree. And, we should never close our eyes for what data says, but we also should never 100% close our own eyes about or what we what we experience. It's about the interpretation of the data. Yeah. I mean, the data the data is what the data is. I mean, an ADR, you you can't change. But the interpretation and the story around why the ADR is the ADR, that is why, a certain result is viewed, bad, or indifferent. And is it also where you come in? As like as as the because you started to work in, for for a reason. Yeah. Oh, 100%. I mean, for for me, it's about I I one, I truly believe that the the the smaller hotelier, is able to push their profit margin much more than what they do today by applying certain tactics and strategies around what what what I have learned over my time in in the branded world, certain channels to utilize, certain rules of play of what we said already, and I'm not going to repeat that. Otherwise, I'm in trouble now. But do not do that. Applying these types of tactics, plus have have a BI to analyze your data, look at the data, and tell a story around the data. That makes you learn from the results, and that gives you provides you pillars to work for yourself in the future and to do things slightly different. Yeah. It's drawing your own map. Right? You start with start with a few highways first, and then you're gonna draw the other bits and pieces around, but learn from it. And there's not and there's not one tactic or strategy that has a serve it all, way. Right? I mean, there's not one percentage nonrefundable discount you should apply, in all markets No. As an example. But then, I mean, this would be boring as well. Right? True. And it's and and this is why the data that comes in, how much nonrefundables do you produce on a monthly base? And analyzing that data will tell you the answer. Is this sufficient or should we change? Yeah. Do you have anything I missed? Or you maybe have a question for me. Could also be. That's a good one. What would your what would your key price strategy be? What Only based on pillars. What three pillars should we all utilize in developing our strategy? I think for me, it always starts with the fact how's like, the things I get in, like, the the reservations I get in, how stable is the things I'm building on? Like, because sometimes you see that it's very fragile, and you start to build a house without any foundation. And especially when we, for example, go back to to the Copenhagen example, you need a certain, like, fixed, foundation to build things on. And the the bigger the foundation is, the e the more stable your pricing would be at the end of the day. Because we see it very often that it's that it's super it's super wavy. It goes up. It goes down because a lot of reservations come in. They fall out. And, also, here, it starts with, hey. What do I actually offer, and how can I get how can I stabilize my, my bookings there? Because if you have more stable bookings, you you don't got by surprise at the end of the day. Because for me, revenue management is a lot about how much risk am I willing to take in order to maximize my profit. Because at least it is all about risk. You can put a a a room for, like, €600, but there is a risk of not selling it. Mhmm. And the more urgency you have at one point, the less risk you are willing to take. And therefore, you drop your prices. So if we if you can find a builder strategy around, hey. How can I how can I make sure that not cut by surprise? So how can I make sure that I don't fall in this trap of, like, unseeing urgency of selling rooms already helps you a lot? Mhmm. And then it's all about what do we offer? What do we offer and to who can I offer this? And this is really about distribution. Like, okay. What what what kind of hotel do I have? What kind of gas do actually fit perfectly in my property? And what's the actual price I can charge towards this specific market? And how I'm gonna reach that market? And I I think those things will also contribute to the fact that you get much more stable bookings in. Because if you target the wrong market, it will be super fragile. And and and I'm very much aware that for some markets, it's really fragmented in a lot of small bits and pieces. Because if I look at bigger properties, it's like playing Tetris. I always said this. It's like playing Tetris. You have a block here. You have a block here, and you try to fit in everything. However, every block has a certain value. And with those little blocks, you're trying to create A forecast. A forecast and a stacked value as well. Yeah. Where with smaller properties, you don't have to play Tetris. Correct. Because the amount Well, that's not that's not completely true. When you speak about a six bedroom hotel in the middle of Amsterdam, you paid Tetris as well because you will always have that orphan gap somewhere in between when you have a minimum length of Yeah. Of course. But then it's more, like, on the room level and not not really on the segment level. Yeah. And I I think being aware of what you can offer and what you act what and what do you actually offer now? Because what you can offer, what do you offer can be differentiated a lot. And if all those like, if this is realigned, it will stabilizes your strategy in general. And I think that's really a thing. You cannot stabilize your pricing, when everything before is not aligned to each other. Because we can expect that we do, we change the price here, we change it there, but it's really reactive on a lot of things. The more you can stabilize, the less reactive you have to be because there is less urgency to sell rooms. And this is really the thing. And is revenue management a guessing game? Not really. It's guessing within with all the information you have, of course, because it's never a 100% the truth. Based on trends. Right? Yeah. It's but it's not it's gonna be never a 100% the truth because it it can always change. It's like a stock market. You can have a certain prediction, but it can always change. And and then it's how do you act on it? How do you react on it? But at the end of the day, it's really a game about how much willingness to take risk do I have in order to achieve a higher revenue. And the more information you have, the quicker you can respond, the less less the risk will be. And I think that's really the thing for me. Focus on on those things to to align a little bit better on on the general level. Mhmm. Was that pillar one? I'm kidding. We we can maybe you should write a book. Yes. I think you'd be a good book writer. No. I don't think so. I'm I'm very dyslexic. So, let's let's skip that part. Maybe with maybe with AI We talk outside. That's that's fine. Maybe with AI nowadays. Perfect. But I think I think we covered a lot. And that is one last thing I want to say, and that's thank you. Thank you for being here. Thank you for sharing, and, thank you for speaking with me.