In our previous article, The Future of Revenue Management with the OTA’s we highlight the rules of revenue management, and the professionals who practice it on an almost-continuous basis.
NB: This is an article from Revenue Your Hotel
The role of OTAs and online distribution in revenue maximization has gained unprecedented importance. Of lately, hotels have started implementing formal revenue management guidelines, roping in committed professionals to sharpen and focus their revenue generation processes and augmenting their profitability. Hotels are using advanced travel technology tools for handling their hotel revenue management.
The role of Expedia in Revenue Management System
Managing rates and keeping your hotel on top of competitors in the hotel industry is difficult. Rather encouragingly, the OTAs appear to be taking note of this with Expedia the latest to jump on the revenue management tools.
As a global business with more than 200 travel-booking sites globally and nearly 385,000 lodging partners worldwide, Expedia has the necessary scale to provide partners with comprehensive and accurate analysis that makes a difference to their business.
In 2016 Expedia launched Rev+, a revenue management system allows hotels to gauge their rates against competitors over the course of 90 days, alongside other market factors with A forecasting tool will allow properties to view demand for a market based on data points captured across the portfolio of Expedia Inc. brands, whilst a notification system will alert hotels to changes to rates over the course of the last 24 hours. Along with three great guides to help growing the direct bookings: a cheatsheet with 10 metrics to improve hotel distribution activity, using hotel apps to build loyalty, and an analysis on how to keep the customer at the heart of your business.
Rev+ is a revenue management tool designed to provide actionable data and insights to empower partners to make smart decisions to optimize their revenue. Rev+, an essential tool for revenue managers, comes at no additional costs for hotel partners, and does not require additional sign-up.
Current features for Rev+ by Expedia includes:
- Price Calendar: A comprehensive view of a hotel’s pricing relative to their competitive set you now have the option to view your property’s pricing data by any seven days, a full month or the next 365 days.
With more enhancement, Expedia created the 7-Day graph view that makes it easier to follow key pricing and demand metrics, showcased in a graph format. It also enables revenue managers to overlay booking performance on top of the public data displayed to compare how demand and pricing impact performance. The 7-Day view is available for any 7-Day period in the upcoming 12 months, not just preset week views.
- Price Optimization: With price alerts color-coded, quickly learn which days your price may be too high (orange) or too low (teal) vs. your competitive set.
- Market Demand Score: Hoteliers can view future demand for their market based on millions data points from the Expedia, Inc. family of websites and it’s affiliations.
- Market Occupancy Forecast: This feature replaced Market Demand Score to provide more information about compression. Expedia data analysis can estimate how many rooms will be sold in a destination, on a specific date, in the future.
- Daily Market Alerts: An alert system that helps Hotels to find the most recent and relevant changes in their market or it is a notification to the hotels of changes to public prices in their market within the past 24 hours.
- Alerts: Or Priority Dates , at a quick glance, to know which days have alerts, for example, events you should be aware of which might be in high demand or low demand i.e. new year eve so hotels can take actions for the price strategy .
With the alerts for competitive set price changes, market’s occupancy and opportunities for optimizing your prices, the alert can be set to receive it inbox by mail at least once a week, you can view alerts in your inbox and decide if you need to login to Rev+ to further analyze your hotel pricing strategy and possibly to take next steps of actions for your hotel pricing strategy.
Revenue managers even can decide which alerts they want to receive and how often by customizing the Market Alerts.
- Daily Snapshot: Additional insights about what is happening on a specific day; including forecasted demand and know events.
- Average Competitive Set Rate: Or Competitive Price Grid where hotels can know and follow competitive set’s rates are low or high and follow the pricing trends for the market over the next 365 days.
- Market Occupancy Forecast: In Graph view or Heat Map view, see what the market compression or occupancy looks like over the course of the next year.
- My Property’s Rate: See how your daily rate compares to the rates on other days at your property.
- Price Optimization: A feature that alerts revenue managers when hotel price could be optimized for that day to help improve the revenue performance.
- Property Analytics: A feature that helping revenue managers to create a more intelligent marketplace by providing relevant data to help better run business from revenue managers point of view. This flexible reporting tool allows monitoring the property’s revenue performance in the marketplace and among competitors.
Property Analytics evaluates three primary metrics to track and compare revenue performance and suggest actionable items to address concerns:
- Visibility – to See how your property is showing up on Expedia Group sites and learn about tools to help get seen more often.
- Conversion – When travelers view your property, make sure they like what they see and want to book a stay.
- Guest Value – Per guest, revenue varies. Appeal to the highest value travelers with valuable tools and add-ons services.
The Rev+ tool continues to become more intuitive with every new enhancement version so revenue managers can better understand and interpret the data being highlighted their property. With the new design, Rev+ it brings focus to features and details that aim to help revenue managers to improve revenue performance in a clear, direct manner. In addition to that, Rev+ now automatically highlights details in the market around occupancy, pricing and events, providing insights into hotel’s performance, with more accuracy than ever before, Highly engaged Rev+ users saw an average 10% incremental revenue growth.
Although Hotel revenue management is all about supplying and selling the Right Room to the Right Client at the Right Moment at the Right Price, in order to best meet market demand, but hotels have always faced the issue of perishability. An empty room from yesterday cannot be sold today, or an empty room doesn’t generate revenue. In addition, with more competitors and channels than ever before, hotel revenue management solutions have never been so important for dealing with increasingly dynamic market conditions.
Revenue management helps to predict consumer demand to optimize inventory and price availability in order to maximize revenue growth. The purpose of Revenue Management is not selling a room today at a low price to sell it tomorrow at a higher price. Revenue Management also means selling a room at low price today if you do not expect higher demand. Revenue Management challenges the resources in the importance of gathering information about the market so that you can be proactive and not reactive.
By understanding the market and the factors that affect hotel demand forecasting, understanding your hotel booking patterns, your hotel position in the market in relation to your competitors, and future events, you can create your own hotel revenue management strategies for optimizing your performance by increasing revenue, occupancy and your RevPar index.
Hoteliers need to remember that OTA’s want to increase the number of reservations, room nights and revenue they sell in each market. They want to book more rooms in your hotel than their competitor OTA’s which mean a high commission for them.
