Just as we have divided time into BC and AD for eons, the coronavirus pandemic has created a new time rift – pre-COVID-19 and post-COVID-19.
NB: This is an article from Fornova
A fundamental shift has been created in human behavior whether that will be temporary or permanent remains to be seen. One thing is clear. We have all changed.
It’s this behavioral change that has hit the travel and hospitality sectors the hardest. Very few businesses have escaped the impact of lockdown restrictions. Change has been thrust upon us, whether we like it or not and no matter how much we all say we are open to change, failure to do so is still one of the single biggest reasons companies fail.
But it’s against this backdrop that Revenue Managers perhaps have the greatest opportunity to redefine their role by becoming central, strategic advisors in how hotels can optimize revenue and capture demand. We believe that there are three key areas where revenue managers can make a critical difference to their hotel’s future success.
Revenue Managers to Data Engineers:
In the new data-driven world revenue managers who are steadfast in their reliance on setting rates and price-related offers risk becoming redundant. They need to position themselves at the center of data-focused decision-making that encompasses sales, marketing, and distribution. Rather than waiting for reports to be handed to them, they need to gain control and understanding of the critical information behind their hotel.
A revenue manager in Amazon today, for example, doesn’t just look at his supply and demand. They are looking at the channel entry point of a customer, characteristics of their buying behavior based on search, visibility of the product against the competition, and finally pricing based on the market down to geo-fenced rates. The same set of data is available to us but barring a handful of people we don’t even look at such attributes; we need to embrace data and not push it away because we are too busy or it’s too complicated.
Data is the new gold as they say and revenue managers need to combine their in-depth expertise with new intelligent data technology to harness as much as possible. Consequently, Revenue Managers need to be more involved in demand generation going forward – and the most important decisions for hotels nowadays are demand generation-related! For example, when deciding what promotion to set up on an OTA or direct channels, only Revenue Managers have the data-derived insight to know when the promotion needs to run, how much the promotion should be, etc.
Static to Dynamic:
Staying still is no longer an option for hotels that want to survive the greatest crisis in their history.
Despite only having perishable inventory, static is still the norm in our industry. The way hotels track our competitors is still static; in most cases, a hotel in any category will only look at other nearby hotels – they won’t consider alternate accommodations and the impact of their availability and pricing – or will only be looking at the same competition since they began operations.
To capture whatever demand is out there revenue management teams need to re-orient themselves to embrace these dynamics, changing their rates much more frequently. The product and combinations will become more and more personalized based on the feeder market and customers and hotels will manage their partner relationships more dynamically as well and gone will be the era of static commissions and once a year rate deals for wholesalers and corporate contracts.
Reactive to Adaptive:
In a world where channel selection, shopper trip frequency, brand preference, and consumption are changing by the hour, it is important to understand, track and co-relate these data points to build the right proposition for your customers.
You have to be able to look at all these data points and make proactive decisions to discern your potential demand instead of waiting until demand falls or increases and then change your prices or build an offer reactively. Unfortunately, most revenue management systems today are not built to incorporate these data points in their algorithms and until then, I believe revenue management teams that input these into their strategies will set themselves up for future gains above market.
To shape the most effective revenue strategy today’s revenue manager needs to have a granular understanding of their guests – which feeder markets they are in, what influences their booking decisions, which channels they are most likely to book through, their own services, offering and rates while constantly comparing all of that to their competitor set – and in the post-COVID-19 world that needs to include other accommodation types in addition to hotels.
All that can seem overwhelming, especially when working with reduced team sizes. That’s why our entire suite of tools, all based on extensive business intelligence, is here to help hotels achieve exactly that – to use the right channel, at the right time, to the right audience. We combine leading-edge technology with extensive hospitality expertise to deliver high-powered solutions to the world’s largest hotel brands and OTAs as well as hundreds of independent hotels around the globe.