By now, the importance of revenue management is clear to most hoteliers around the world.
With new intermediaries emerging and customer acquisition costs rising on a seemingly daily basis, effectively managing how and where your rooms are sold is critical to the success of your business.
Selling the right room to the right guest at the right price and on the right channel can mean the difference between a mediocre and a highly profitable operation.
The new normal
But that’s easier said than done. Booking.com and Expedia are growing even larger, TripAdvisor and Google are becoming online travel agencies and new challengers such as Airbnb are growing at staggering rates.
Throw in the dissolution of rate parity agreements in Europe, and it’s clear the distribution landscape isn’t getting any easier to navigate. In fact, the pace of change is accelerating.
Until recently, revenue management has been driven primarily by operators, but that’s beginning to change. The importance of understanding revenue management—and ultimately moving toward a holistic revenue strategy—has to go beyond the property level and include the most advanced technology.
Revenue managers can’t make a hotel’s most important decisions alone and by hand with ad hoc spreadsheets.
All together now
To optimize profits effectively, revenue strategy must be embraced by the numerous departments throughout a hotel and all the way up the corporate ladder. It must integrate revenue management with sales, marketing and technology.
Revenue managers and their systems have been responsible for forecasting demand and pricing rooms to maximize revenue, but that can no longer be done in a vacuum, separate from the marketers creating much of that demand and the sales team trying to convert it.
These once siloed departments must come together to focus not just on revenue, but net revenue.
Revenue strategy isn’t a fancy new name for revenue management, but rather a new way of thinking.
Read full article at: Tnooz
NB This is a guest article by Michael McCartan, managing director of EMEA for Duetto.