NB: This is an article from IDeaS
1. Using revenue management industry acronyms
ADR, OCC, RevPAR, ProPAST, PMS, CRS – the list goes on endlessly. Although largely a by-product of today’s evolving social media exposure, two shiny, new acronyms are making their way into our industry’s vast acronym vocabulary. These recently-added acronyms also provide an ideal conceptual backdrop into the heart of revenue management productivity and its intangible, inner meaning.
2. Fear of Missing Out (FOMO)
FOMO, representing the expression, “Fear of Missing Out,” is a general state of anxiety that you are missing an exciting or interesting event. This anxiety is typically induced through the observation of various posts and public exposure on social media channels. On a personal level, it can be stressful to know you are not attending a social gathering that some of your other peers are. On a professional level, this can similarly translate into your workplace responsibilities. As a revenue manager, you are responsible for knowing and planning around what’s going on in the hotel and the market. What if you don’t know what you’re missing out on until it’s too late? FONK, which stands for the expression, “Fear of Not Knowing,” is the self-imposed pressure that many place on themselves for not knowing enough about something. This lack of knowledge could equate to a complete unawareness about a topic or event, or having a partial idea without the full range of understanding.
3. Understanding the benefit of having an automated revenue management system
It’s well known that automated revenue management systems provide revenue managers with analytics that allow them to quickly identify and address trends in their business. However, not all hotel revenue managers have the benefit to utilize such a powerful analytical tool in their day-to-day work.
Consider these real life examples from revenue managers trying stay ahead of the curve without having the benefit of an automated revenue management system: In preparation for my weekly meeting with my general manager (GM), I pulled together some high-level KPI (key performance indicators) data. I was hoping my GM wouldn’t ask me to go into detail because I didn’t have time to fully analyze the data. Maybe my fear gave me away, but I was immediately questioned on the granular data and conclusions that supported the metrics. I was unable to answer this, making me feel embarrassed in front of my peers – and I still had to analyze the data even further for my boss.” During a 14-day holiday period, I did not keep a close eye on our inventory. Suddenly, we had overbooked the hotel by 60 rooms, causing havoc for the whole hotel – especially for our operations team. We had to walk guests to alternative hotels, ultimately leading to extremely dissatisfied guests.“
4. Obtaining all necessary data in making company decisions
Without an automated integration between our property management system and customer reservation system, we were tasked with plugging a 5 per cent occupancy deficit. Assembling a team of three reservation agents, we had to manage rates and inventory manually for thousands of rooms on our extranet sites. This involved manually uploading rates and inventory aligned with the hotel’s revenue management strategy. We had to additionally monitor guest feedback from the leading review sites. Unfortunately, this went on for a few chaotic months until plans for a system integration were underway. Many mistakes were made during this time, such as accidently leaving a “zero” off a series of bookings, and having to honor the mistaken low price.”
I recall a time where our corporate team didn’t spot the change in our mix of business early enough. Normally, our boutique hotel had high volumes of function space business with corresponding guestrooms. Because of a renovation and some special events, our expected volume of groups with guestrooms decreased, causing a higher-than-expected transient volume. Had we noticed this early enough, we could have opened up free sell and encouraged our catering team to sell the unoccupied space. Catering scrambled to make their numbers while the room side did quite well. If we had the right tools in place between our departments, we could have avoided the last minute stress of trying to recover the unmaterialized group business.”
Trying to make confident decisions with incomplete information can immediately put you on the defensive. Admitting that you don’t know everything can be a very uncomfortable feeling. So why can’t people give up the pressure of being an expert and instead demand tools that will let them explore beyond their limited vision? Herbert A. Simon, a renowned economist, scientist and Nobel laureate, wrote, “What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.”
5. A focus on employee engagement and retention
Deloitte’s 2015 Hospitality Report references several productivity-related contributors that challenge the ability to retain hotel employees, with “excessive workload” taking a top position. Also referenced in the report is the “correlation between high employee engagement and customer satisfaction, customer retention and corporate performance.” It goes on to say even further, “A sustained focus on employee engagement and retention is a key driver for customer satisfaction, directly impacts the bottom line and offers companies a competitive advantage.” Simple translation? Get your systems under control so you have time to focus on your guests.
6. Using a scientific approach to improve productivity
Dr Ravi Mehrotra, President and founder of IDeaS Revenue Solutions, was recently asked how a scientific approach improves productivity. According to Dr Mehrota, Yes, automated revenue management systems definitely improve productivity. By providing real time access to automated forecasting, optimization and a wealth of critical information from multiple sources, the revenue management systems allow analysts to take full advantage of fleeting opportunities in the dynamic marketplace. Any properly designed revenue management system must provide a comprehensive and robust solution that is focused on helping users make better, more efficient, more informed, and, ultimately, more profitable decisions for the business.
There are a couple of requirements that revenue management systems should adhere to for optimal results. The revenue management system needs to be automated and tightly integrated with reservation or other business transaction systems. It should also boast a user-friendly visual interface that clearly and effectively represents the system’s complex analytical data. An easy-to-use design also improves the productivity and results that an analyst or user is able to achieve by working with the system. The revenue management system should also allow its users to create various types of reports wheneve and however they want them. More advanced revenue management systems also allow users to perform predictive “what-if” analyses that allow them to study the impacts of parameter or input changes to the forecasting and optimization model outputs. An automated revenue management system is truly a must for achieving optimal results. In many small and mid-size companies, revenue management is not always properly applied, or is manual, inefficient and time consuming. Automating the extraction, transformation and loading of data – and making it easily accessible to the user – provides them with the results of running statistical and mathematical models on an on-demand or periodic basis. Providing easy interfaces to perform “what-if” analyses and adhoc reporting significantly enhances an analyst’s productivity and overall business performance.”
7. Choosing the right revenue management system
If you or your hotel is being continuously affected by FOMO, FONK, or both, it may be an indication that you are ready for automated revenue management. To battle any unnecessary knowledge or job-related fears, it is important that the system that you select has productivity tools to let you monitor and adjust situations to capitalize on all possible opportunities. Look for a system that provides you with an intuitive user interface, clear interactive workflows, heat maps or clearly visualized calendars, and informative dashboards. “What-if” scenario analyses and ondemand performance support will also allow you to get the information that you need when you need it—saving you valuable time while keeping you informed.
When you think about our newest acronyms, FOMO and FONK, it can be safe to say that being as informed as possible can help you largely avoid either of their associated anxieties. In an industry where it’s your job to know and act on what is happening at all times, a strong revenue management system is a quality investment to drive your optimum productivity.
