From significant capital costs in construction or asset acquisition to ongoing operating costs, hotels come with a hefty price tag – just ask any hotel owner.
In today’s competitive and complex landscape, a growing number of hotel owners are taking an increasingly active interest in their investments to the benefit (and at times, frustration) of the property’s management team. This engaged owner approach can lead to increased management direction and support; however, it may also result in managers needing to further justify their decisions and communicate effectiveness to an individual with interests that are driven primarily by revenue maximisation.
While revenue management is not a new industry practice, it is not always understood or appreciated by property owners. How can revenue managers demonstrate the value that revenue management brings and its positive impacts on profit to their owner?
Many property managers have firsthand revenue management experience and recognise the technological benefits and potential for maximising revenue. However, some regional hotel owners still consider revenue management another additional cost and something “nice to have.”
When utilised to its fullest potential, revenue management technology positively impacts efficiency and improves operational performance across an entire property. Its advanced forecasting capabilities helps hotel better manage staffing levels across all departments. For example, if a hotel can anticipate accurate levels of demand, it can ensure the optimal number of staff are working and avoid under or over-staffing during periods of higher or lower demand.
During periods of higher forecasted demand, it is important hotels are staffed appropriately to handle check-ins, check-outs and room attendance to make the guest experience smooth and pleasant. Guest satisfaction is a critical driver of repeat business, reputation management positioning and brand perception – all important impacts in an asset valuation.
This same principle can be translated throughout the hotel’s entire operation for better overall staffing and inventory levels. Optimised wage costs translate into savings which contribute directly to the hotel’s bottom line.