In case you haven’t noticed, the hotel industry has changed significantly in the past decade, and in many ways revenue management is leading these changes. Specifically, at most hotel companies revenue management has evolved from just a rate-setting function to a strategic discipline that relies on predictive analytics to guide the entire enterprise’s quest for increased profitability.
That’s a major conclusion of a recent study of revenue management leadership, commissioned by the Hospitality Sales and Marketing Association International and conducted by Dr. Lalia Rach, founder and partner of Rach Enterprises and former head of the hotel programs at New York University and University of Wisconsin-Stout.
“In order to be more competitive and more successful, the hotel industry has had to adopt more sophisticated methods and techniques to management,” said Dr. Rach. “Hotel professionals need to make better decisions from better access to better data to produce better results.”
Changes in hotel consumer behavior have in part led the industry to a greater reliance on data sciences, she said.
“Customers are far more sophisticated and their expectations are at vastly different levels so it’s no surprise that if your customers are more sophisticated, then the way you run your business must become more sophisticated,” Rach said.
Research for the study, “Portrait of Revenue Management Leadership,” covered revenue management executives at brands, ownership groups and management companies. One revelation from the study was the educational levels attained by many respondents, with nearly one-third holding advanced degrees.
And for the most part, the job functions for those in this group have moved well beyond the day-to-day pricing function: Nearly 60% of the group said they spend the majority of their work week on revenue planning and forecasting and on strategies to drive additional revenue and growth.
The group identified moving beyond revenue management to predictive analytics as the most important strategic change that must take place in their progression over the next three years.