Revenue management professionals have certainly been through the wringer over the past 18 months.
NB: This is an article from Cendyn, one of our Expert Partners
First, it was furloughs and layoffs. Then, as the global economy slowly sputtered to life, it was fewer resources and uneven demand. Now, as we look to the year ahead, the core challenges involve managing new team structures, forecasting with pandemic-inflected data, fighting for market share, and navigating a fundamentally reshaped industry that faces ongoing uncertainty.
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These factors are undoubtedly top-of-mind for a profession that relies heavily on data-driven insights mixed with professional instinct. Thriving in the year ahead will require quick adaption to changing conditions and a willingness to try new things. To help you stay on top of your game, we’ve compiled the top trends influencing revenue management in 2022.
Navigating the reduced workforce and changed roles
“Doing more with less” has become a core skill set for revenue professionals. With limited resources likely to be a permanent state, it’s all about efficiency. To master revenue management with a reduced workforce and expanded responsibilities, focus on these three areas in 2022:
- Profitable distribution
Maximize booking profitability by monitoring each channel’s total cost. Then, experiment with distribution and pricing strategies that keep more of each booking revenue. That methodical experimentation will yield outsized results in a demand-constrained environment. - Automation
Eliminating manual processes allows time to be allocated to more impactful tasks. Automation also means integrating the latest demand data into forecasts and pricing recommendations to make revenue managers more effective. - Integration
To maintain top performance in this environment, integrate your hotel’s technology solutions across departments. This enables teams to contribute to the same goals while improving demand forecasting, marketing performance, and loyalty program strategies.
Amplify strategies with an RMS
Technology is a crucial ally in achieving “more with less” — especially a revenue management system (RMS) that powers a dynamic revenue strategy that adapts to real-time conditions while automating tedious tasks to save time for more revenue-generating activities.
The right RMS can drive efficiencies and increase profitability in four key areas:
- Segmentation
It’s a tall order to constantly tweak segments based on the latest guest data. Develop a nuanced understanding of core segments so that you can be surgical in targeting guests with not only high booking values but also a high likelihood of spending more on property. - Profitability
All business isn’t equal. Data-driven pricing recommendations based on real-time demand forecasts offer advanced, actionable insights for prioritizing the most profitable bookings. - Upsells
An RMS can automate room upsells based on individual guest profiles within the booking flow and across pre-arrival communications. - Analytics
Advanced analytics offer data-driven pricing recommendations that keep your hotel not only priced to win bookings but also priced profitably. These recommendations can be automated to save time and maintain optimal positioning 24/7.
Maximize non-room revenue
Optimal revenue generation requires a holistic approach that seeks to maximize non-room revenue. Winning tactics in 2022 require CRM-driven upselling that doesn’t only focus on room upgrades. A holistic perspective accounts for all on-site amenities, such as restaurants, spas, and golf, as well as in-destination experiences, to capture non-room revenue at your hotel.
Some tactics to test in 2022 as you evaluate each guest’s rich guest profile for a 1:1 revenue strategy:
- Customizable packages that empower guests to craft their own ideal experiences
- Offer locals a discount to encourage non-room spending
- Carefully accept groups to maximize occupancy without compromising profitability
- Collaborate with marketing to repurpose rich visual content across your booking channels
- Build “lookalike” segments focused on non-room revenue segments
- Sell local goods and exclusive experiences
- Explore partnerships with other brands that boost perceived value and offer new ways to connect with target segments
Foster a collaborative mindset
One of the enduring impacts of the pandemic is the need to foster a collaborative mindset across departments to maintain resilience in the face of uncertainty. Deeper collaboration with other departments ensures better results and more substantial ROI from your revenue management investments.
- Operations
Revenue’s advanced forecasting offers insights into optimal staffing based on expected demand. The data also informs inventory and even F&B offerings. Report out regularly so that operations has direct visibility into the powerful data analytics from the revenue tech stack. - Sales and marketing
Pricing strategies must be coordinated with sales and marketing, so everyone is aligned. The last thing you want is to cannibalize business by offering misaligned rates or competing for business. The potential cannibalization is especially acute in an environment where group sales remain depressed, and those teams feel pressure to close.
The result of this integrated, collaborative approach to data analytics is more effective and accurate decisions across your entire operation. As 2022 signals continued uneven demand, teams must align on one shared objective: optimize revenues and profit across the whole operation thanks to dynamic forecasting and real-time reporting.
Leverage loyalty
In this environment, the science of loyalty is crucial to optimize revenues since it’s more profitable to generate revenues from past guests rather than acquiring new ones. Especially as different markets re-open, such as international travelers arriving into the US, these guests can deliver better results for your hotel. In many cases, these guests spend more money on property and stay longer.
The pandemic has also directly influenced the psychology behind loyalty, which means that revenue will need to make some adjustments in the year ahead. Leisure guests are looking for more than just a good deal: it’s about exclusivity, wellness, and escape. On the business side, corporate companies will remain budget-sensitive, pursuing only events with strong value that bring together their stakeholders in a safe-yet-impactful way. Revenue will need to address these desires in compelling packages, showcasing exactly how the property will preserve duty of care while fostering collaboration among hybrid teams.
