Europe is at the hard end of the revenue management discipline, but the lead on data and education comes from North America.
Those who think revenue management is just one more silo need to be brushed aside.
Maximizing yield via an ADR push might miss a host of other tricks concerned with overall spend.
Owners in Europe are becoming far more active in the revenue-management area of the business as the discipline moves to the forefront of hotel business in the continent. Owners are demanding hotels yield-manage better, and chains adopt a more holistic approach across all silos.
Recent legal decisions concerning rate parity, even the outright banning of the practice by France and Italy, has put even more emphasis on clarifying the practices.
At the inaugural Revenue Strategy Forum hosted by revenue-management firm Duetto on 2 November at the Ace Hotel Shoreditch, panelists at a session titled “From revenue management to revenue strategy: Why this has to be a board-level initiative” said the revenue-management team even more so today needs to be front and center of the entire operation.
Panelists said heads of revenue-management departments should sit on company boards; marketing and other relevant silos need to be brought under its fold; data needs to be improved; and educational facilities should be prompted to understand and teach this evolving discipline.
“Have it be the chief revenue manager who hires the team and have weekly calls to assets on price strategy.
From an investment viewpoint, this provides a land of opportunities,” said Cody Bradshaw, senior VP of acquisitions and asset management of European hotels at United States private equity firm Starwood Capital Group.
“The discipline has always been more comfortable talking about revenue optimization than revenue management.
That needs to change more, to take more ownership of the strategy and have guts exposed to the commercial side of things,” said Simone Truscello, director of revenue management at the Ace.
Jonathon Liu, VP of pricing and revenue management for the United Kingdom and Ireland at AccorHotels, said there has to be different strokes for different folks.
Not one approach fits all operations.
“The larger chains have to look at revenue management with both sides of the brain.… You’re looking after the assets but also looking after the guest and their whole travel journey, and that approach allows you to be with the customer a lot more,” Liu said.
While Europe might be at the hard end of revenue-management disciplinary changes, panelists said North America appears streets ahead when it comes to data and educational provision.
There is plenty of data out there, panelists agreed, but the logistics need to be streamlined.
“There might be a separate data science team, and then another team that sorts this data and sends it to operations, and then there is revenue management,” Liu said, who added that at the end of the day the important point is who is charged with transforming data into something meaningful.
“The U.S. has far more forward-looking data reports, and I wish they were here in Europe, as without them we’ll see more transfer of value to (online travel agencies) from owners, who are being attacked from all sides,” Bradshaw said.
“I have no problem with brands owning more of their customers’ data, but what I do have a problem with is that much of their data gathering and analysis is so archaic,” Bradshaw added.
The ownership of data and having nimble minds linked to decision-making power in the hotel operation must be the spearhead, panelists said.