Revenue management and marketing: A powerhouse duo
In the current competitive climate of our industry, the presence of revenue management and marketing in any thoughtful hotel strategy has become absolutely critical.
One of the greatest challenges faced by hoteliers today is the congestion that continues to build within their markets. New hotel supply pours into cities more quickly than demand can rise to meet it, and our assets now have to fight harder than ever to capture a fraction of the business.
It’s not enough just to be the newest, trendiest hotel on the block anymore. Today’s consumers expect an exceptional level of service and thoughtful amenities at the bare minimum. So, how do you stand out from the crowd and continue to excel in overcrowded marketplaces? The rate and demand strategy brought to the table by revenue management, in tandem with the creative edge offered by marketing, can lend the competitive advantage that makes all the difference between success and failure.
Though the whole is greater than the sum of its parts, before anyone can fully grasp the weight of marrying these two powerhouses together, it’s important to understand the impact of each separately. Over the last several years, revenue management has risen to become one of the most valuable instruments in our toolbox.
How do successful hoteliers navigate competitive markets when local supply is double or even triple what it was just 10 years ago, with new developments seeming to spring up every day? Even the most talented and determined salespeople can’t create demand out of thin air. When working harder stops yielding results, it’s time to start working smarter. And that’s where the genius of revenue management comes into play.
How are we performing against the market? How are we performing against the brands? How do we get better? What levers can we pull to make an impact? What are our most profitable channels? How can we drive value while remaining competitive in rate? These questions—and so many more—are constantly filtering through the minds of our in-house experts developing cohesive strategies to ensure the ongoing success of our on-property teams.
A strong high-demand strategy can result in the few additional dollars in ADR that make the difference between meeting and beating budget. A targeted effort to shift your channel contribution by driving bookings away from the OTAs and toward brand.com might not create new bookings, but would you rather pay 10% commission or 0% commission? It’s an easy question to answer.