At its core, total hotel revenue management brings together and optimizes all revenue streams, as opposed to thinking of each department separately.
Thus, a more holistic approach to revenue management is needed to identify revenue-generating opportunities and optimize revenue and profit generation.
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Today, hoteliers are looking for ways to generate extra revenue even during low-occupancy times, in line with this, we’ll see an important shift towards total revenue management and not only room revenue.
When it comes to hotel revenue management, a lot of focus rightly goes to room sales. Again, that’s understandable. As a hotel, the property’s primary means of generating income will be through room sales. However, it should not be hoteliers only focus, the hotel Industry has been talking about moving beyond rooms revenue for decades, but fortunately the pandemic accelerated an opportunity that was there even before for hoteliers to move beyond the room revenue. Managing room revenue only is no longer enough in today’s unpredictable and fast-paced market. Especially during the pandemic, every hotelier will have heard or used the terms total revenue management, or total hotel revenue optimization.
New circumstances call for new approaches, which is always a jumping off point for innovation. To effectively apply a total revenue management strategy beyond room revenue, Hotels need to change the perception of hospitality being less about just selling rooms, and more like a retail business. In such low demand, Hotels must focus on how to drive revenue beyond the core business (room sales) through alternative space usage and ancillary revenue, as today, what used to be seen as ancillary income has become a primary source of revenue for some properties. And there’s still room to grow!
Alternative and Optimizing Space Usage
Thinking out-of-the box has become the norm, rather than the exception. But adding functions to existing areas while keeping the luxury and comfort factors in mind is no mean task. Some hotels are rethinking their spaces for different uses where the segments’ demand evolution post-pandemic saw the rise of different customers and different needs, which required the Hotels’ strategy adaptation towards a more local and experience-driven target, by re-imagining the use and function of every square foot of a hotel property, and how revenue is generated from it.