Jens Munch, CEO
January 29, 2018

Revenues according to Pooh

Last week I was collecting my thoughts on the state of revenue management and how hotels differ in their approach. It was a fun exercise to map the differences out and at some stage during the process I thought of a children’s book I’d read years ago, Winnie the Pooh.

If you haven’t read it yet, hopefully this will pique your interest. And if you have, I’m sure the characters are still fresh in your memory. That’s the amazing thing about good stories, you discover later they apply to much more you thought they would at the time.

Small caveat, in case you’re prone to irritation or scepticism: this is just a bit of fun. Hopefully there are some small insights in these parodies of styles. And hopefully revenue managers (and others) will recognise some aspects of their process and laugh at the rest. I certainly recognise myself in a few of these!

Eeeyore

One of the sweetest characters in the book is Eeyore who is a very kind and gentle donkey, who is an incurable pessimist. He never thinks anything will work and is never surprised when things inevitably fail (as he predicted).

In this camp we have the general managers who will tend to say:

“We don’t need new ways of thinking. One price, one bed, one night, that’s what a hotel should be.”

Piglet

Next we have Piglet who is much more hopeful than Eeyore. But very, very nervous at the same time. She doesn’t want to make the wrong decision and worries endlessly about past choices. Here we have the revenue manager who wants to do a great job but isn’t very confident in forecasting or analysis.

From these we often hear:

“I’m a price-follower in my market. The right way to manage this property is keeping close tabs on the CompSet staying slightly below to capture business.”

Owl

Owl talks a good game. Lots and lots of acronyms and complicated concepts like “saturation point” and “TRevPAR”. The trouble with Owl is that the complexity of his own thoughts overwhelm him and he often digs himself into a hole.

This type of revenue manager is often found in larger hotels and you are likely to overhear him say:

“During Q4 contracting lead-times were compounded by a YoY easing of demand in our segment. Our yielding was too aggressive leaving the property with excess inventory.”

Rabbit

Rabbit likes to do things right. And the only way to do things right is to do them yourself! Rabbit is a little bit like Owl but with much more pragmatism and less pretension.

“I’ve spent 5 years perfecting an Excel spreadsheet which I think may well be much more advanced than anything else out there. It’s hard work but the results speak for themselves.”

Tigger

Tigger is very bouncy and energetic animal. His attention span is small but his enthusiasm infectious. Even when you know Tigger is bouncing down the wrong road you feel the urge to follow along.

Typical Tigger-speak:

“We should be putting all of our inventory on blockchain, automated front-desk and call ourselves a technology company. No wait, a travel solutions company. No wait, we are actually a social network for our guests.”

Winnie the Pooh

Winnie the Pooh is a very simple bear. He likes honey and he is a little bit lazy. But being lazy isn’t always a bad thing. In most of the adventures it is Pooh’s avoidance of discomfort and his simple thinking that save the day.

I think Pooh might say something like this about his property:

“Sometimes there are more guests and sometimes there are not so many guests. I wonder if there is some way I could stay in bed and eat honey and have a little machine move my prices up and down?”