Hospitality, at its core, is undergoing a transformation.
NB: This is an article from IDeaS
Hoteliers who joined the industry to provide service and interact with guests are learning to adapt to the ever-changing digital side of the business, which continues to grow in complexity and scope. Guest needs are evolving, as are the methods travelers use to locate and book stays. And of course, the omnipresent impact of COVID-19 has touched every aspect of how hoteliers think, work, and plan.
To maximize the value of hotel assets in today’s ultra-competitive market—where data comprehension and speed are invaluable—information must be freely shared and easily digested across an organization. This is the essence of profit optimization and connected commercial success in today’s hospitality landscape.
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But what does it mean for a hotel’s operations to become “connected?” In many cases, hotels with connected operations are able to identify new ways to create value based on data analysis and forecasting. At the same time, forecasting itself is changing—and fast. In the current environment, “where we were a year ago” is no longer a relevant metric for considering where a hotel will be tomorrow.
To cut through the complexity and create a robust, forward-looking commercial approach, revenue managers and leaders need access to data from all corners of a property. Once a unified system is in place, hotels will glean greater insight from the data they collect and use it to influence decision-making, create new revenue streams, enhance total profitability, and even increase the value of their properties.
Here are three ways to employ advanced revenue management strategies and tools to power a hotel’s connected commercial organization.
Grow Asset Value
Modern revenue management requires more action than simply setting a price and building a forecast, then waiting for the results to roll in. It’s critical for operators to continually gain insight into what is going on in the local market and the broader economy. This is even more imperative in the environment in which hoteliers operate today.
With market conditions continuing to change at a rapid pace, businesses are unable to rely on what was previously conventional wisdom. Instead, operators must adopt a plan of action that enables them to test new ideas and quickly learn from the results to increase asset value.
Trends from 2020 proved hotels must constantly look for new ways to capture revenue apart from room rates to reap benefits beyond traditional price and demand. Operators must reconfigure, or even eliminate, under-performing cost centers while the time is still right. Some of these opportunities could include reconfiguring public or meeting spaces to suit smaller gatherings, rethinking a property’s F&B strategy, or developing a more targeted purchasing strategy for guestroom amenities based on shifting trends.
To do this, operators must have access to data impacting every aspect of their hotels. By applying revenue management principles to all on-property revenue streams, operators will be able to identify areas for improvement and increase the value of their assets. This is particularly important now, as the foundations of hospitality continue to shift and historic profit centers such as spas and on-property restaurants lie dormant.
Uncomplicate Data Analysis
As the breadth and utility of data in hospitality grows, it becomes more difficult to see the individual elements influencing trends. With so much ground to cover, it is impossible for revenue teams to fully grasp the impact of the data they have without assistance from automated systems. This is at the heart of the push to unify data and create a more fully connected commercial process. Using tools to sift through large volumes of data in search of valuable trends is now a necessity. To use them effectively, hotels must consider the potential of automated data analysis accompanied by a trained user directing and auditing the process.
Without these tools, it is easy for both nuanced and unambiguous trends to be lost in the deluge of data fed to businesses each day. On top of this, the fragmented nature of a hotel’s current data landscape—where key figures are missing from revenue management systems—makes it difficult for revenue managers to see a hotel’s full operational picture at a glance. Budgets remain tight for the foreseeable future, and revenue managers are accountable for more properties than ever before in a volatile travel market. These revenue managers need access to concise, actionable information to make split-second decisions, which is only possible with access to the right data aggregation and revenue management engine.
Automation exists to simplify the complexities associated with modern data analysis, not to replace revenue managers. Hotels cannot truly optimize profits by setting rates irregularly, or without strategically approaching the process. With support from automated systems, however, revenue managers will have the ability to pivot a property’s entire revenue strategy using insight gained by experimenting with data in new ways.
Enact a Connected Commercial Strategy
With so much data in play and the process of breaking it down growing in complexity, where does its value lie if only the revenue manager understands its full implications? Revenue managers are spending more time than ever shaping their findings into easily-understood messages for hotel leadership to act on, and existing technology can simplify and expedite that process.
The ability to tell a cohesive, complete story through data is a necessity for hoteliers looking to increase their assets’ value in 2021. If hotels want to think beyond the guestroom and create new profit centers based on what is actually in demand from guests as opposed to hopeful assumptions, hotel leaders need to understand what the narrative data is telling them. Revenue management is powering this effort, which is limited only by hoteliers’ willingness to embrace a connected technology ecosystem with an automated revenue management system at its core.
A truly connected organization would allow revenue teams to collect data from every corner of a property, identify the trends influencing business in the near future, and generate a forecast using this information. By embracing a connected commercial strategy, hoteliers can clear the fog of uncertainty clouding their decision-making and understand their position in the marketplace.