In the current economic climate, it is increasingly important to have tools that allow us to monitor fluctuations in demand and react quickly to changes.
NB: This is an article from Beonprice, one of our Expert Partners
The adoption of management technologies in the hotel industry has skyrocketed in the aftermath of the COVID-19 pandemic. It seems clear that hoteliers are increasingly aware of the importance of implementing process automation and information management systems.
Tourism demand is timidly recovering, but there is still uncertainty and a certain level of instability, as the relaxation of pandemic control measures has resulted in spikes in infection in certain destinations. At this juncture, the need for tools that allow us to monitor these swings in demand becomes ever stronger.
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Here are some reasons why you need an RMS at the centre of your technology stack:
- Role change of the Revenue Manager
- Importance of the strategic approach
- Organisational culture based on RM
- Focus on Total Revenue Management
- Access to multiple data sources and data visualisation
- Market and competitor monitoring
- Accurate forecasting
Role change of the Revenue Manager
The role of the Revenue Manager is undergoing a process of profound change in the hotel sector in recent years, especially since the last crisis. It is becoming increasingly important to optimise the teams’ working time. In the current context, it no longer makes sense for the Revenue Manager to collect data and sort them to create reports. This type of tasks can be easily automated with IT tools, allowing the team to provide the human factor that is essential to interpret the information and decide on the long-term strategy.
In addition, a trained team, freed from manual work, is prepared (and necessary) to explore and decide on the software that will be most relevant in optimising results. Access to data visualisation tools, which put business information into value, and provide actionable data for decision making, is key to the success of the revenue strategy.
Importance of the strategic approach
In this context of change, the focus of revenue management work must also revolve around data-driven decision making. Process automation makes it possible to increasingly reduce repetitive information gathering tasks. The focus on long-term strategy is gaining the prominence it needs.
Optimising revenue is not just a question of pricing. Technological tools help to better understand the business, monitor demand and competition in real time, perform different types of forecasting, and recommend strategies to follow to improve results. The data science methodologies provided by an RMS provide descriptive, predictive and prescriptive analysis, which turn Revenue Management work into an intelligent process aimed at deciding the best strategies to help improve the present and future of the business.
Organisational culture based on RM
On the other hand, although the main users of an RMS may be revenue managers, it is increasingly important that other departments have access to all information. The culture of MR is demonstrating that MR is not just a matter for one person, but a policy for the whole organisation. Objectives are always set from a MR perspective, to improve profitability (GOPPAR). Strategic decisions must be based on knowledge and not on feelings, and all people in the organisation must be involved.
When the culture of RM is extended throughout the company, the RMS becomes a central tool, providing a comprehensive understanding of the business that is useful to all and eliminating information silos.
Focus on Total Revenue Management
Furthermore, RM’s perspective is not only to increase ADR or occupancy (REVPAR), but also to be able to identify the most profitable customers, competitor awareness, value for money, cost of acquisition, NetRevpar, guest retention, etc…. As all these KPI’s ultimately have an impact on the GOP. And for this, the MR department needs to work hand in hand with Marketing, e-commerce, sales, reservations and reception, implementing the necessary tactics to carry out the strategy decided by the management team.
The ability to identify the most profitable customers means taking into account the revenue that can come from other outlets and not just what is produced by accommodation. The most profitable segment is not only the one that pays more for a night’s stay, but also the one that is less expensive to acquire, the one that uses other services within the hotel and the one that obtains a degree of satisfaction that encourages them to repeat the experience. Starting to focus on Total RevPAR is a further step towards improving our profitability.
Access to multiple data sources and data visualisation
The development of Big Data and artificial intelligence technology allows access to multiple data sources and their efficient processing. This provides a very deep reading of the context in which the business is located.
We no longer rely only on information from internal systems. We can integrate external data sources to compare our performance with that of our competitors, or to understand in real time the variations in demand and their causes.
Working with a tool that provides an advanced, dynamic and intuitive visualisation of the information is key to be able to combine the tactical work and the strategic approach of revenue management. In this way we can make appropriate and profitable decisions.
Market and competitor monitoring
In a context of uncertainty such as the one we live in, we must be aware of the circumstances of the environment. Knowing the market and monitoring the trends of our competitors will help us to be more accurate in our decisions. Our competitors have the same difficulties as we do and it is essential to know their strategies.
The access to information sources provided by an RMS will allow us to monitor the market in real time and to be agile and reactive in detecting changes in trends.
Accurate forecasting
The evolution of data science has allowed increased accuracy of RMS recommendation algorithms. Adapting these algorithms to extraordinary circumstances is essential, especially in the current context.
During this crisis, Beonprice’s RMS has managed to evolve the recommendation algorithm to know what weight should be given to historical data at any given time, detect changes in demand behaviour and automatically establish corrections to demand trends. The HQI™ (Hotel Quality Index), pick-up behaviour and competitor strategies have a greater influence on the calculation of price elasticity and forecasting. As a result, sales strategy recommendations are becoming more and more precise.
