Apartment Revenue Management Conference recap.
The first annual Apartment Revenue Management Conference, hosted by NAA
and the Executive Producer of the Apartment Internet Marketing (AIM) Conference, welcomed nearly 300 attendees to the Westin Kierland Resort
in Scottsdale, Ariz. Sept. 12-14.
The conference kicked off with a keynote address from Robert Cross, Chairman and CEO of Revenue Analytics, who is recognized as the foremost expert in the revenue management field.
Cross, a lawyer who worked in Delta Airline’s legal department before he was promoted to a senior marketing position, encouraged attendees to ask questions and challenge the status quo within their companies. Revenue management’s biggest competitors are ignorance and inertia, he said, both of which can be overcome if proponents continue to push the benefits of the pricing model and use the system as a tool rather than a solution.
Examples of the system’s benefits were offered during education sessions such as “Revenue Managed Properties vs. the Other Guys,” one of many panel discussions led by revenue management experts. According to panelist Tom Bumpass, Managing Director and Chief Information Officer of Greystar, revenue management systems generate greater revenue, lead to positive ROI, are effective in a variety of market and product types, enable desired business processes and outcomes, are embraced by onsite staff and provide safety in numbers.
Attendee John Barger, Vice President - Real Estate Services for Memphis-based Fogelman Management Group, said it and many other sessions provided valuable insights.
“We’re just coming out of a one-year test program with revenue management, and as we begin to roll it out over the entire portfolio, we’re going to have clients and partners who will ask us, ‘Is there wisdom to this pricing approach?’ The conference has proven to me that revenue management provides a great revenue lift over the traditional pricing model and provided me with evidence that will enable me to say yes—and be able to back it up.”
While many of the attendees had revenue management systems in place, some were hesitant to roll it out, especially during the resident renewal stage. Panelists addressed this concern during the session “Renewals and Revenue Management Revisited,” suggesting that lower resident retention rates are to be expected once a revenue management pricing model is adopted.
Turnover may increase, but owners and managers will bring in new residents who are willing to pay more for the apartment home.
Attendee Carrie Roth, also a co-moderator of the General Session, said she found that learning how revenue management can have a positive impact on the renewal process was encouraging. “Our company recently adopted a revenue management system but we’ve yet to roll it out at the renewal stage,” said Roth,
CFO of Asset Management Inc., in Calabasas, Calif. “This session has convinced me to do so sooner rather than later.”
Justin Hammer, Area Manager for IRET Properties, based in Minot, N.D., agreed. “We set renewal prices across the board, but it would be beneficial to get statistics on each property and take advantage of a revenue management tool,” said Hammer, whose company uses a traditional pricing model.
Other sessions touched on topics such as yield optimization in specialty housing, pricing tactics and getting the most rental value based on amenities and the community’s resident base.
Attendee Ian Rogers found the presentation on amenities to be especially helpful.
“We now have granite countertops in all of our properties, so we’ve stopped including that feature in our list of amenities—but how are prospects supposed to know about it then?” said Rogers, Concierge Manager for San Mateo, Calif.-based company Prometheus. “We need to market those ‘$0’ amenities that may not be unique to a specific property or unit, but add value nonetheless.”
Malinda Holstine, Pricing Analyst for Denver-based Laramar Group, also enjoyed the session.
“It was good to hear that while onsite staff may think the value we’re placing on a particular amenity seems outrageous, there are people out there who will pay for it,” she said. “That’s an ongoing battle.”
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