The Relationship Between Revenue Management & Tourism Grading

TrevPAR World - Darryl Erasmus

Here at TrevPAR World we are strong believers that there is a very strong relationship between reputation management, brand awareness as well as revenue management. We decided to investigate the relationship between being a tourism graded hotel and driving revenue, what better way to do that than to go to the source.

We were lucky enough to secure a interview with Darryl Erasmus who is the Chief Quality Assurance Officer at the South African Tourism Grading Council, Darryl has extensive Sales & Marketing knowledge within the industry as a Director of Sales at a group level and provided the perfect insight into our investigation.

We hope that you all enjoy reading the interview as much as we enjoyed putting it together – Meet Darryl Erasmus

TrevPAR World - Darryl Erasmus

What social media channels are you on and why have you selected them?  

Because our business has both Trade and Consumer focused campaign elements, we utilise both Twitter and Facebook as key social platforms. This enables us to have engaging conversations with consumers of hospitality product online and provides a great channel into our online information and education platforms such as websites etc.  I personally use LinkedIn regularly to connect with other leaders in the tourism space as well as read and research new topics and trends.

In your opinion, describe the relationship between revenue management and being a Hotel graded by the Tourism Grading Council of South Africa. 

The Tourism Grading Council of South Africa (TGCSA) has well over 5300 graded establishments across South Africa. These properties are made up of 85% small SMME establishments (Eg, B&Bs and Guesthouses) and 15% hotels.  Most members utilize their star grading as a mechanism to differentiate themselves from other properties in their competitive area.  This differentiation often translates into an accompanying rates strategies for the level of star grading achieved.

Do you think that having a South African Tourism Grading certificate can assist in helping drive incremental revenues and why do you think so? 

Without doubt. The minimum entry requirement for some categories requires the establishments to provide specific services.  This provision of additional services ensure that properties are exposed to great incremental revenue generation opportunities.  For example, Country House category members are all required to provide dinner to guests, as they are typically located outside of urban areas.  Additional or incremental revenue is thus generated for these members.

Where do you see the relationship between Revenue Management and being a Tourism Graded hotel in 5 years from now? 

I think that hotels will continue to use their star grading to differentiate themselves from other properties in their competitive sets.  This differentiation will always translate into rates strategies for the level of star grading achieved.

TrevPar World Darryl Erasmus

In your opinion what is more important in terms of Revenue Measurement – ADR, RevPAR or Occupancy?

RevPAR has always been the key indicator for me.  As hotel room stock is finite stock, it is important to understand the financial impact of the expiration of room stock.

As the Tourism Grading Council of South Africa covers a large range of property types, what would you say the 3 keys aspects are to focus on in order to improve one’s grading?

Regular and detailed Maintenance Programmes

When acquiring new items for your property, always acquire the best quality of that item you can afford.  This not only will last longer but will contribute to the overall quality feel for the property.

Service – Ensure that your service levels always exceed your star level.

Tell us an interesting fact about yourself that nobody would expect;

Im a sucker for a piece of sheet metal with four wheels. Cars are one of my passions as is aviation.

Who and Where is the best hotel you have ever stayed in?

Firstly, I must state categorically that we have some of the most amazing hospitality product in the World in South Africa.  I have stayed in some amazing places.  The Saxon Hotel is still one of my most memorable experiences.

TrevPAR World Saxon Hotel

In closing, what bit of advice will you give all aspiring revenue managers looking to improve their revenue strategy by obtaining a grading?

Make sure you have all the theoretical background and latest revenue management tools at your disposal.  Always approach you revenue decisions with an open mind and take as much input onto consideration as you can.  Consultation and communication is key to implementing and achieving great results.

Author: Derek Martin