Today, Atomize, one of our Expert Partners, and John Burns released a white paper for hotel operators entitled “Hotel Revenue Management in a Time of Great Change” describing the impact of the COVID-19 pandemic on revenue management processes and how revenue management systems are supporting these changes.
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The pandemic has impacted every aspect of the hotel industry. Initially hotel operators and revenue managers, those who were not furloughed or permanently let go, scrambled to be good business operators in a time when many conventional rules, processes and assumptions were no longer valid, viable or effective. As they came to understand the much changed travel environment, revenue management has re-emerged as a strategic discipline, key to a robust recovery.
This white paper evaluates the new priorities, tools and resources of today’s revenue managers in the much-changed hotel operating environment. It does so by examining the tasks associated with revenue management and the reasons why the function, despite increased responsibilities and importance, was often burdened with workload issues. This despite revenue management systems, designed to streamline processes, being available for more than two decades.
“Since its introduction, hotel Revenue Management technology has evolved to play a greater and greater role in rate and inventory control. Professional Revenue Managers have earned respect in hotel operations as they applied their tools and techniques to significantly improve occupancy forecasting, rate setting and, most importantly, revenue generation. As Revenue Management was applied, it became apparent that the environment in which it functioned and the expectations of its performance, were evolving, ” says John Burns.
The report identifies the changes, both in frequency and magnitude, in hotel operations brought on by the pandemic and the impact it had on already-growing workloads of revenue managers, when qualified individuals were even available to fill the roles. It then examines the value of an RMS, especially the so called third generation systems, in freeing the revenue manager to complete other responsibilities particularly those of a strategic nature. It notes that the pandemic dramatically accelerated many trends that were already underway in hotel revenue management.
“The pandemic disrupted, redefined and distilled hotel Revenue Management. Immediate layoffs and the much-reduced relevance of historical data prompted questions about Revenue Management’s role going forward. New, future-focused data was sourced, new demand patterns, trends and influences on occupancy were recognized and analyzed. And priorities were reassessed, leading to tough questions: “What matters strategically? What can be automated? What can be discontinued?,” continues Burns
The report concludes that the fast-paced changes that have been occurring in the hotel industry, in the revenue management discipline, and in revenue management systems, will not cease. That business conditions and hotel operations will continue to evolve, including revenue management processes, and revenue management tools with a modern technical foundation, with a commitment to free revenue managers from routine, repetitive tactical-level activities, will be crucial to revenue management’s continued progress.