‘We started the year in 2020 and ended it in 2030’
This quote from Inspired Capital co-founder Alexa von Tobel perfectly encapsulates the realities of the hospitality industry today. Trends have accelerated and we seem to have jumped ahead a decade, with transformative change happening seemingly overnight.
NB: This is an article from Cendyn
So, what is next for revenue management? We have an exciting opportunity to hit the reset button and rethink systems while demand is constrained. As we look ahead to the post-pandemic landscape, now is the time to build a revenue management discipline that maximizes revenue during both good times and bad.
Data delivers forever
As data-driven marketers and revenue managers, we have long been converts to the power of data. That’s not to undervalue professional instinct; it’s just that data, when collected accurately and interpreted correctly, does not lie. Data is necessary to determine performance and provide both comparative and key metrics that help decision-making.
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This year, the complexities of COVID have leveled the playing field. We are all starting with a blank slate – and not just as historical data is concerned. We are navigating a whole new world, which requires a clear data-driven approach that mines every piece of data held by your organization for relevant insights. Travelers processes and ways of doing business have changed. What travelers deem important for travel today, may not be what it was pre-COVID, therefore the data that marketers and revenue management once considered valuable, may not be as useful as it once was.
One thing is for certain: those that analyze their data the most effectively – and act the most decisively – will be ahead of the rest.
Data-driven creativity is the secret sauce
Data is not necessarily the savior, and in some instances, data has even taken a backseat to creativity. Understanding the right data and utilizing it along with balancing creativity in marketing, will provide hoteliers the edge to perform at their greatest potential.
There is a need to relentlessly experiment and try new things. Conducting A/B testing and becoming a master at it is a must-have skill for revenue managers. Offers that may have performed well in the past, may not provide the same performance today. Therefore, put it all on the table – offers, promotions, segmentation, ancillaries, upsells, packages, room types, amenities – conduct experiments and evaluate the results. Today, it is really all about the survival of the most creative!
Micro-trends: future of forecasting
While it may be true that forecasting is forever changed – after all, you can’t always rely on long-term historical data to predict future performance – it is still incredibly useful. You just have to be faster! Rapid forecasting adjusts in real-time to microtrends, such as new pockets of demand.
Within your forecasting, it is important to keep a keen eye on projections at both the property and market levels. As we have experienced the global impact of COVID and how it influences travel patterns, you will want to have broader insight of global demand patterns in perspective as well.
As the situation is constantly evolving, you will need a system or the ability to re-forecast and adjust to shifting demand and bright spots quickly. Constant calibration of your revenue management system is necessary to quickly identify change and capitalize on new segments of demand.
Micro-trends: new rules of segmentation
Simple segmentation no longer works because demand has shifted so much. You must go micro: narrow in on the microtrends and microsegments that are the bright spots of demand.
Matching ancillaries, upsells and bundles to each segment opens the door of possibilities. When such level of granularity exists, you will be able to more easily identify microsegments and channels that can drive revenue. There is also the opportunity to leverage AI/machine learning to further segment your audiences automatically and intelligently.
The other major trend accelerated by COVID is the convergence of sales, distribution, marketing, and revenue management functions. This was already happening before the pandemic but the dramatic drop in business has eliminated positions and put more emphasis on doing more with less.
Time is a commodity for all. If strategy teams are spending extensive time gathering and merging data, they are missing the opportunity to analyze and be strategic. Automated revenue management tools can handle the data crunching so that you can better allocate your time and work on the soft skills that strengthen your teams: collaboration, communication, creativity.
Data-driven revenue management requires both the right data inputs and the right tools to analyze and act on that data. The revenue manager of 2021 will need to be an adaptable systems manager and a clever analytical thinker willing to take calculated risks. By fully harnessing the power of creativity and convergence, hotels will be able to compete in a year of unknowns. Revenue managers will need to move fast, stay flexible, be nimble, and lean into both automation and creativity.