It would seem that change is the only constant variable in today’s global hospitality market. Between shifts in how guests research and book their accommodations, the increasing industry-wide fragmentation, and new competitors entering the private rental space – nothing is as it once was. As a result, revenue management has similarly evolved into more than just a tool to assist hotel room pricing.
Today’s revenue managers are key collaborators linking marketing, sales, reservations and e-commerce divisions within a property. Responsibilities now encompass more complex components such as profitability through a mix of engineering, channel strategy, contract evaluation and user-generated comments. With the volume of changes in the revenue management field and in the consumer buying process, it is important that hotel general managers (GMs) understand the following five principles to focus their entire organisation on driving better revenue in totality:
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Getting the right information
Basic revenue management starts with data collection and analysis. This data is critical for hotels to accurately forecast demand, which can influence pricing and inventory control. What kind of data should a hotel be collecting and analysing? Key data points include: room type, additional spend, sold nights vs rate, frequency of purchase, distribution channel, day of week, length of stay, and revenue vs profit. Manually collecting all of this data takes significant time and energy, in addition to carrying the risk of human error. Amid a flurry of flash sales, mobile marketing, and OTAs, it can be tough for revenue managers to quickly identify fluctuations in demand and react with changes that impact profit in real time. To remain competitive, many hoteliers turn to automated revenue management software to provide executives with the data they need – when they need it – in an easily consumable format.
The large amounts of data gathered from the hotel reservations, front office and sales departments makes it critical that hoteliers develop standard operating procedures to ensure all employees follow a uniform market segmentation standard, using the same rate and channel codes.
