Sales Mix: Your Ticket to Incremental Revenues and Profits
How Well Do You Know Your Sales Mix?
By S. Lakshmi Narasimhan Founder, Ignite Insight LLC | February 02, 2014
The "incremental" Imperative
Owners and stakeholders are obsessed with growth. They seek year on year (popularly known as "YOY") growth in the returns to their investment. This means sustained, incremental profits year after year.
The seasonality of the hospitality industry and hotel business in particular means that every single dollar earned in revenues is precious and more than that is the dollar retained as profits. However, by the nature of this seasonality of business, hotels have lopsided sales graphs within a performance period. In a week itself, depending upon whether it is a city hotel or resort, weekdays could see demand high (city hotels) and weekends slow. Resorts have exactly the opposite behavior. Full house situations and poor occupancy levels all happen within a same week.
When revenues behave in this up and down seasonality pattern, profits get impacted significantly. To balance that up and down movement and sustain revenues and profitability is the name of the game. And in this game, a big player is Sales Mix.
Your Sales Mix
At the heart of it, sales mix is simply the combination of products and services offered by your hotel. Note the word "combination," it is not merely the list of the different types of products and services of your hotel - it is how these products and services combine with each other.