With new hotel supply flowing into cities faster than demand can rise to meet it, it’s no longer enough to have the hottest new hotel on the block.
NB: This is an article from Cendyn
Hoteliers are battling harder than ever to grow average daily rate (ADR) and profitability. So, what must you do to shine in this overcrowded marketplace?
Hotels with integrated marketing and revenue management departments – and tech stacks for CRM and RMS – significantly enhance their hotels’ bottom lines, experiencing increased demand for shoulder and low-demand periods, benefitting from revenue increases of more than six percent. Here are five benefits you’ll experience when your hotel marketing and revenue management teams and systems become BFFs.
1: Forecasts
Maintaining open lines of communication between revenue management and marketing creates a reciprocal relationship that leads to more accurate forecasting and effective marketing. Your marketing team can rely on revenue management’s demand forecasts to determine when to create promotions, as well as what segments to target for the greatest impact. And keeping revenue management informed of when marketing places offers leads to better, more accurate forecasts.
2: Booking pace
Consistent interaction among the two teams creates an effective revenue-generation team at your hotel, reducing any gaps between marketing initiatives and revenue management pacing goals. An advanced revenue management system (RMS) allows you to track booking pace, which varies throughout the year. When your marketing team has access to booking patterns, they can better plan initiatives in the CRM, so they drive demand at those times when your property needs it most.
3: Profitable pricing
Pricing is your revenue management team’s forte. With the right automated software and data-driven strategies, revenue managers set rates designed to optimize revenue according to changing market conditions and demand. Strategic revenue management also considers the total value of each guest from all available revenue streams – rooms and ancillary sources. When you combine this data with the granular level of guest segmentation available from marketing in the CRM, you can design your optimal business mix, creating innovative packages with differentiated rates that optimize revenue. You can also make sure that you always have rooms available for your most valued guests.
4: Higher conversions
When you marry the insights and data-driven approach of revenue management with the guest-oriented practices of marketing, you generate higher conversion rates with your marketing campaigns. Revenue management data points you toward which guest segments and channels are most likely to produce the greatest profitability, while marketing combines that information with their own data on customer preferences to identify the best ways to capitalize on those opportunities with timely, targeted campaigns through optimal outreach vehicles.
5: Optimized campaigns
An RMS also tracks the hotel rates of your competitive set on a weekly and even daily basis. Comp set information allows marketing to become more proactive with their campaigns, adjusting them at the last minute if necessary, to remain competitive. And by working together, revenue management can share which marketing campaigns in the CRM make money, as well as how much each one brings into the hotel. This transforms the conversation from, “Campaign A had a 7 percent acceptance rate,” to “Campaign A cost the hotel $XX and generated $XX in profits.” This information lets marketers know which campaigns are truly beneficial for the hotel’s bottom line, and they can plan future campaigns accordingly.
The bottom line:
Both marketing and revenue management hold keys to data that can drive more hotel revenue. When you open up dialogue between the teams and integrate their tech systems, you create a dynamic duo that will propel your hotel toward sustainable success, even in today’s oversaturated markets. With these two teams working in tandem, you’ll experience all kind of synergies that result in profitability.
