We are delighted to continue our Expert Partner relationship with berner+becker
In this “Who Are We” video we are joined by:
Pontus Berner – Co-Founder and Managing Partner
Pontus talks about the revenue management philosophy of berner+becker, their typical hotel client profile and what does he see in the future for revenue management as we come out of this crisis.
Hope you enjoy the discussion.
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Here is the video chapter timeline and links to the transcript below:
1:38 berner+becker Introduction
4:12 Company Philosophy and Approach
6:28 Typical Client Profile
9:55 Future Insights
Below you will find a transcript of the interview
Please Note: Transcripts are generated using speech recognition software and human editing so may contain slight modifications compared to the video/audio
Trevor Grant
Hi, Pontus, good to see you again. Thanks for joining us today. How are you?
Pontus Berner
Hi, Trevor. Good. I’m very good. Thank you. Good to join you again as well.
Trevor Grant
Now berner+becker have been a long term partner with Revenue Hub. We met a number of years ago, and we’ve spent a lot more time recently speaking with Veit and Till on the podcast and the webcasts that we’ve been doing. So, I think a lot of our listeners and the viewers have seen those guys, so it’s great to have you on board and to talk with us here and just give us a chance to hear who berner+becker are, how you came about, how you’ve grown and developed over the years. So, let me let me hand it over to you. Can you just tell us a bit about you, your background and how berner+becker came into its fruition?
Pontus Berner
Yeah, sure. First of all thanks both for a very good partnership in the last years, we really appreciate that and it’s very, very cool, I think what we have built up together with podcasts, so super nice. We’re very glad to be a revenue partner, also going forward.
Pontus Berner
So yeah, berner+becker, time flies right. So we’re four and a half years into the company now. We started it in May 2016 and it was on initiative, then by my German friend and business partner, Lars Becker and myself, and after having spent quite some years in the hotel industry, and both studies back in the day, but in the recent years, and leading up to the founding of the company into bigger chains, working for revenue management, and having this sort of remote revenue management being done from centralised centres, we saw that as an opportunity and thought, hey, this is something we’re going to do ourselves. So yeah, four and a half years now and running through Corona times, but also seeing the growth plans in the future. So very excited, actually.
Trevor Grant
Absolutely. And you’ve obviously grown over that period of time. What kind of size are you up to now?
Pontus Berner
So we’re 12 now in the company. We actually were planning on obviously, a higher growth up until this stage, but everything has been a little bit flat, last months
Trevor Grant
Wonder why that might be.
Pontus Berner
We’re very glad to be able to keep our portfolio with us through this crisis. So as soon as you know, things take off, and things have started in some areas to take off for us already, but I’m looking forward to further growth during 2021 and further beyond.
Trevor Grant
Excellent. That’s really good. Can you tell us a little bit about your kind of philosophy, as you said, you and Lars came out of corporate backgrounds, you’ve got a wealth of revenue management experience. Obviously, when starting berner+becker you must have had in mind an approach of what you wanted to do and your kind of value proposition, could you talk a little bit about that, your philosophy around berner+becker and what you want to do in the revenue management space.
Pontus Berner
Sure, we offer as a company, outsource revenue management and consulting and training, but I would say the real essence and our credo and why we exist and why we wake up in the morning, is really because we truly believe that revenue management as such, is a huge benefit for hotel and really, as you can see, in literature, but also now with our experience, it really increases revenues by an average 15% and upwards. So, we really truly believe that revenue management as such is something that hotels really need and really benefit and profit from and our, you know, our credo is to make that, make revenue management available to all hotels. Focusing them, yeah, basically saying that everyone in need and that wants to have it and that realises that they need it, we then want to make a professional revenue management solution available for them. And that is a lot more than only installing a pricing optimization.
Trevor Grant
I was just going to touch on that. Your philosophy in terms of talking with you guys over the years is far more than just handling the pricing point, which is often seen as revenue management, isn’t that?
Pontus Berner
Yeah, I would say we have a very holistic approach to revenue management and working with technology is something that we really value and we do more and more and this is super exciting area which develops, but, in essence, we’re more functioning as a commercial director of hotel that does the strategy thinking, you know. There’s going to be many, many years until the system can say, hey, let’s proactively launch a certain promotion and change our distribution setup and that’s not really what a so called revenue management system does, but we then use those optimise pricings, but we do all the strategical work around it. Anything from corporate contracting to distribution, setup and promotion planning, etc.
Trevor Grant
And do you have a focus? I mean, we when you’re looking at your client portfolio, is there a typical berner+becker client? Is it independents, small, large groups can you tell us a bit about that side of things.
Pontus Berner
Yeah, it’s quite broad. And we opened the company, founded the company to make it available to every hotel, but every hotel revenue management makes an impact and makes sense, obviously, let’s say chain hotels, they do their own thing. So, we focus on the private market, but also smaller chains and also franchise affiliated chain hotels, so an owner that has maybe Hilton Hotel, but it’s not really part of the Hilton chain. And so those can all be our clients, and we have a portfolio between 30 rooms up to you know, there’s actually no (limit), they maybe could have 500 or 1000 room plus and also anything from a city destination to a beach resort or a mountain resort. And I think in the last month now during Corona, revenue management is, is let’s say, luckily, and finally entering the leisure hotel market more and more.
Trevor Grant
Okay, you’re seeing a pick up around.
Pontus Berner
Yeah. So that because those are the ones that have had a good time and in some markets, actually, even though the corona year, so they realise that they need a more professional setup. So that’s an exciting expansion into that area.
Trevor Grant
And you’re based in Germany, just again, for those that don’t know, whereabouts are you based?
Pontus Berner
We’re based in Germany company was founded in Frankfurt in 2016. But relatively quickly, we moved to Munich and opened up our head office here. So, this is where we’re sitting. But we also have one employee sitting in Berlin and we are going to expand that office in Berlin. So basically, we’re in two destinations. But clients are spread around outside the borders of Germany as well. So the focus there is Central Europe for us. We have Austria, Switzerland, we have clients also in Iceland, and Slovenia, and the Netherlands. And we’re looking at contacts with hotels in Belgium, and we have clients in Sweden, which is my home country. So be fun to expand then up into the Nordics a little bit as well. So we in essence, we work with anyone within a three hour time difference to GMT+1 basically, that is what we need to enable a good efficient communication with our clients.
Trevor Grant
So, as you said a lot of growth in the four and a half years and without the COVID Coronavirus scenario that growth would have continued. Leads me on a little bit in picking up on the interesting year that we’ve seen and a number of different approaches around revenue management from hotel groups and, obviously very conscious lots of people have lost jobs in this time, but the view around revenue management can be a little bit mixed. Some people can see the value of it, other people, when there’s no demand, say well why do we need it if we’re just altering pricing? What’s your view going forward of where you see the discipline of revenue management but how that then plays into you guys from a revenue management consultancy point of view in the year when we come out of this post COVID?
Pontus Berner
Yeah, yeah, I would say COVID has maybe propelled an evolution that was underway anyway. With revenue management, you know, having that 15% impact on revenue growth and outsourced revenue management, being in essence, cheaper than hiring your own employee, we, as a company see actually a huge opportunity in the market.
It’s definitely a super bad and tragic thing that a lot of people have lost their jobs now and I truly hope that good people will get into employment soon enough again.
I can understand why hotels, I mean, even the giants of ours, or, or other hotels, sort of possibly, let’s call it a daily revenue management, where you work with the pricing and pick up and you know, demand etc., and in that sense, you might think at first glance, like, okay, there isn’t much to do if you know, there’s a lockdown and, and no one can travel.
But what we have seen in this in the past couple of months, and that’s been super interesting, even though markets run by 40-50%, okay, there are markets that are completely closed, like Iceland, then just take a pause. But if there’s just a little bit of travel, and we can follow very clearly with market share numbers that even though the market runs at 40% occupancy, due to strategic revenue management, and the way you think about, how can I, how can I widen my demand base here with new distribution channels, new segmentation, focus on a good better value, obviously, there will be a type of promotion planning as well and, and hopefully not just dropping the BAR rate, but really try to get promotional business in that is that is proven to be a huge success. And even though, let’s say, our client would then run at 50-60%, occupancy and the compset at 40% and you can, we can really show really, really good RGIs and actually market share records in the last six months, that if you calculate it back into revenue, has given a huge value that pays for any salary for revenue manager every, every day of the week.
So I think a lot of hotels do this, do it wrong by just doing nothing. As soon as you have just a little bit of demand and doesn’t need to be unconstrained demand revenue management still has a huge impact. And I think this is what the crisis has shown us. And I think that is, huge, huge value to know that. So I truly believe that hotels should continue with revenue management.
When we talk about tech, those systems and algorithms would obviously have a challenge going forward. Let’s say at strategical thinking that a human brain can give in that sense. And a lot of creativity is going to be a winning concept for the next coming probably two to three years. Obviously, some systems are better than others to adapt, and there’s going to be a value for price optimization points. But creativity around the whole commercial strategy is going to be a make it or break it.
Trevor Grant
And that seems to be what we’re hearing as well is, you know, that it’s those that are shifting towards that slightly longer term view, and looking into a more strategic approach, that’s where the real value and impact is coming at the moment. Would you agree?
Pontus Berner
Yeah, yeah, absolutely. And some things might not bear fruit right away, but they will bear fruit at a later point. And it’s always good to, you know, use times of crisis to reinvent yourself and improve things and processes. And then you will have return on investment of that for sure.
Trevor Grant
I think as you say, if there’s no demand, well, okay, it doesn’t matter what you try and do, but if there is it’s all about trying to grab the greatest share that you possibly can, isn’t it?
Pontus Berner
Yeah, we get the question a lot like how do you relate to price dumping? And should you follow along? I can tell you one thing for sure is that if you as a hotel, just keep your BAR rate where it’s always been for that period, and you don’t reinvent your segmentation or distribution or anything, then you will for sure lose.
If you tackle those things a bit creativity and you think the long term and not damage your brand too much, then you can go through such a crisis in a better way. If this is taken away, say it’s a complete close, and for sure someone says it might benefit to close operations completely for one or two months, but other than that, being proactive and creative is paying off.
Trevor Grant
And hopefully with the news around the vaccines and drive towards faster and greater testing, it might start to open up some more travel corridors and everyone can feel a bit more positive going into 2021.
Pontus Berner
Yeah. Hope so as well, we do and good news recently with some promising vaccine candidates. So we’re all keeping fingers crossed.
Trevor Grant
Absolutely. We’ll keep our fingers crossed too. Great to have you join us, great to have the chance to just grab some time with you hear how you guys have developed and I think also just that last bit to hear about where you see revenue management, adding value, it’s obviously something we’re passionate about and an advocate and it’s why we enjoy working with you guys as a partner from a similar mindset. So thanks a lot for joining us, been great to talk with you.
Pontus Berner
Cheers, Trevor. All the best as well for the next year for you.
Trevor Grant
And likewise Take care.
Pontus Berner
Cheers.
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