The entire hotel sector has been severely impacted by the pandemic. This left revenue managers wearing multiple hats and doing more with less – operating as both support staff and commercial strategists.
NB: This is an article from OTA Insight
As we move through 2022, revenue managers are taking on a new challenge: operating with a leaner workforce to capture rising demand in a complex business environment. In this new hyper competitive landscape, hotel owners and operators are looking to their revenue managers to give them the edge.
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Not just in terms of dynamic pricing strategies to capture early demand trends, but also wider commercial decision making. Revenue management is now more important than ever. It also needs to be more effective than ever.
With the market behaving like so, it is critical for revenue managers to have a strategy that is grounded in data.
Finding order in chaos
In these circumstances accurate data should be a revenue manager’s source of truth. However, there is a lot of data out there and the manual analysis needed to adapt strategies to improve business performance is highly time consuming.
Concealed within this wealth of data are critical commercial insights, with technological assistance you can extract them and immediately start to see value.
For a revenue manager to achieve an optimal balance of efficiency and profitability, you need to develop the right technological base. At the heart of this lies the best possible hotel revenue management software, powered by industry-leading data to inform decision making.
With the right hotel revenue management systems in place, you can understand why things are happening in the market, uncover new revenue opportunities and mould a strategy, and flexible rate architecture to match.
Revenue management is a forever evolving discipline, yet the pandemic has rapidly accelerated this once gradual evolution.
More complexity means more data points
A revenue manager’s day-to-day is never easy, but over the past two years it’s become much more intricate. Month after month of lockdowns, travel restrictions and re-openings and closings, have led to seismic trends affecting the hospitality industry – from fast paced, changing consumer behaviour to sudden market demand fluctuations. They have all woven together a function of deepening complexity.
While the bedrock of revenue management may not have changed, the situation which you are now operating in very much has.
Among other factors, revenue managers now have to contend with:
- Lower than average occupancy
- Increased competition for a reduced number of leisure travellers
- Revenge travel occurring from varying source markets
- Shortened booking windows
- Highly flexible rate strategies – from cancellations to ancillary bundles and LOS discounts
- Increased domestic demand
- Reduced corporate demand
- Changing and enlarged competitive sets
- Competition from alternative accommodation
- Difficulty forecasting and the unreliability of historical data analysis
As we emerge from the pandemic, to combat the acceleration of complexity, revenue managers need to be more data-centric – establishing an approach that compresses analysis, decision making and implementation into much shorter time frames.
The hotel industry was already seeing a proliferation of data prior to the pandemic, now revenue managers are faced with an avalanche of data points to analyse and make decisions based off of. Ultimately, there is too much data and too little time.
For revenue management to transition from a largely tactical discipline to one that’s strategic, there needs to be an acceleration in technological adoption.
Change driven by advances in technology
The right revenue management software will help a hotel remain profitable even in times of the utmost unpredictability. Without solutions like these by your side, you are looking at analysing hours worth of data and spreadsheets each day, leaving little time for strategic decision making.
