What should revenue management decisions be based on? Revenue management decisions, at their core, must be based on data.
It’s all too easy for your potential guests to be over whelmed when they’re visiting dozens of websites and looking at hundreds of hotels. When they get to your website, make sure it’s a haven of carefully-selected images, content and rate plans.
Your hotel’s online activities should be completely focused on clarity and data-driven decisions. No matter how chaotic the rapid changes in the industry may seem, revenue managers need to hold onto their minds and stick to the data – data in all its glorious forms!
6 Ways Revenue Managers Use Data to Make Their Hotel Smarter
#1 Your Net Gain per Channel
This is a familiar line, but it must be acknowledged. Instead of reviewing the demand level for each channel, analyse the net gain for each channel. The net gain from a channel is simply the revenue from that channel, minus all costs associated with it (advertising costs, commissions, etc.).
When you look at how much you get from each channel, you can only get a true sense of its value when you also understand how much you give to that channel.
- How much does each channel return when commission costs are accounted for?
- What’s the Average Daily Rate for the channel? It may surprise to see it’s your brand site delivering that higher ADR! Do your own analysis, and remember: numbers don’t lie.
- Research which days of week bring in the most bookings from each channel. Are some channels simply cramming the higher demand dates for your hotel and contributing less to other nights? If so, it might be wise to evaluate how much availability you offer to those channels.
#2 Not All Historical Data is Bad
Looking back on a regular basis doesn’t always lead to a life filled with regrets – instead, it can help you plan for the future!
You should analyse the spend and lifetime patterns of each channel to understand if they have steadily improved or decreased the amount of revenue they bring in, whether they have non-revenue benefits (like exposure) that outweigh their costs, and more.