Hotel revenue management is an evolving discipline, and as part of that evolution, revenue managers are looking beyond the hotel industry to see how others are doing it and figuring out whether those approaches would work at their hotels.
It’s pretty natural to look at other industries, said Cassie Bond, regional VP of revenue management at Chesapeake Hospitality.
“You have to look outside the hotel box,” she said. “It helps us grow, and it gives us a competitive edge.”
Airlines, cruise and ecommerce influences
The most obvious comparison is the airline industry, Bond said, which has so many similarities to the hotel business. Chesapeake looks at where the airline industry peaks in travel, rises and drops in prices and changes in market demand, she said. The company also looks at how airlines sell tickets, such as through á la carte offerings, packages and upgrades.
“You have to follow it closely,” she said. “You have to be in the know of what airline trends are happening.”
Watching cruises is also helpful, she said, as that industry is known for pushing last-minute, three-day cruises and selling off the charts.
“We’re always looking at how to make good tactical moves that don’t screw up the long-term plan,” she said.
Online retail and ecommerce has come into play in recent years, said Mary Hilly, regional director of revenue management for HHM Hospitality. The success of ecommerce, particularly Amazon, has shown the hotel industry it needs to do a better job in making the booking experience quicker, more attractive and available on all channels and devices, she said.
“We didn’t make it so easy,” she said of the hotel industry’s history in generating online bookings. “The booking widget was not the primary focus on the page. The call to action wasn’t there. We’ve learned those lessons over the years. The industry has changed its approach to the e-commerce space.”
HHM looked at its websites to see what performed well and what didn’t, she said. They found some of their room descriptions were too wordy—nobody cared about whether there was an ironing board in the room—so they made changes to the descriptions and improved the pictures, she said.
Revenue management principles are everywhere, said Doug Elftmann, VP of revenue strategy at Interstate Hotels & Resorts. It’s not just airlines, hotels and car rentals, he said, but also spas, golf courses, theaters, professional sporting events, nightclubs, financial services and even hospitals.
“It’s just really if it’s an industry that’s got something perishable, you can find revenue-management philosophies being deployed in the daily ritual,” he said.
It’s about analyzing what they’re doing and watching for innovation, he said. Anytime a company innovates in revenue management, it’s important to see how they attack the customer experience by making it easier, quicker and more personable for the customer.
“When you’re looking at how to do that, it’s just not revenue management but the overall hotel relationship with the customer,” he said.
Adapting and adopting
When looking at retail, Chesapeake analyzes who the companies consider target customers, Bond said, and it looks at what feeder cities those customers come from, which helps Chesapeake position and price its hotels to optimize its mix of business.
