In the super dynamic and highly connected digital world today, it is tough for a hotel to earn its bragging rights. Also, revving up the overall hospitality play and standing out in the crowd is not a cake walk, considering the high level of competition in the industry. Rapidly shifting consumer landscape further adds to the pressure, by disrupting customer research patterns and interaction levels, with hospitality or travel brands.
In such a scenario, any revenue manager would get perplexed, as he or she has to look for fresh rules, and yet not once neglect the “last-minute pricing” thumb rule. As a revenue manager, you are also expected to analyze linked distribution channels. This reveals the prevalence of an ongoing paradigm shift from price sensitivity, towards convenience or guest satisfaction and availability.
On this note, let’s dig deeper into some important Hotel Revenue Management strategies, which will surely impress your boss!
The below listed points syndicate latest technology and key mantras, and are critical as far as profit maximization is concerned!
On a serious note, it is rare to get a competitive advantage simply by implementing a revenue management tool. As an adept professional, what you do differently and how effectively you make use of your Revenue Management System is what helps your hotel outsmart its competition. Keep reading for more insights!
#1. Business Intelligence
Your approach towards business intelligence is going to drive your decision making capability. So you have to decide early on all your key performance indicators or KPIs.
Characteristically, a KPI addresses your hotel’s needs as well as all its bleeding points.
Therefore, it is important for you as a Revenue Manager to figure out a way to measure this efficiently, so that you can track your property’s hits and misses. Such KPIs extend beyond market share indices and focus mainly on profitability. For instance, you have to gauge lost occupancy share and average RevPAR share to ensure that the revenue flow-through goes up significantly.
Now it’s time that you ask yourself a few questions:
- What are my customers saying about price versus value?
- Am I actually understanding the various types of demand?
- Am I capturing the right amount of the potential business?
- Am I too dependent on a particular channel?
- Do I need to reconsider my strategy?
In case the exercise seemed confusing, it’s high time that you get some expert advice about even better ways to use BI tools for your hotel.
# 2. Automation… more Automation… and still more Automation!
Achieving a perfect 2-way connectivity between your hotel’s PMS and distribution channels, with no parity issues seamlessly, is impossible without automation.
Automation will help you attain a single-image view of your hotel’s entire inventory. But, alongside such an automated distribution, as a RM you have to incorporate intelligent decision trees on the basis of the following:
- Cost of distribution of each channel
- Target net ADR
- Target net RevPAR
Such an interlinked matrix will provide you a sophisticated view!
# 3. With a new outlook comes new insights!
As a hotel, you should be able to track web rates of your comp-set as well as all GDS bookings. Your revenue management strategy should utilize this data to figure out the competitor’s revenue management strategy!
Never forget that your prospective guests are super active, for they have bumped into fresh avenues such as:
- Private networks
- Flash sales
- Group buying schemes
- Mobile apps
- Facebook pages
- Online forums
- Twitter deal handles
Overwhelming, isn’t it? Well such promotions are now integral to the entire product mix available on major OTAs. They work closely with supplier partners to roll out promotions as well as drive bookings.
As a visionary RM, you need to track all such promotions and offers, as these are warning signs of possible impact on your hotel’s transient demand.
# 4. ROI lies at the core of it all!
You have to stay prepared in advance for all monthly or quarterly review meetings associated with distribution partners. For this, you need to gather data about their productivity and performance with respect to your hotel.
To create a pre-meeting dashboards, you can depend on the following:
- Booking window
- Lead-time pattern for the partner
- LOS patterns
- Room types sold
- Rate plans sold
- ADR versus room revenue
This analysis will help you develop a better insight about the productively and ROI received from each of your channel partners. And will also help you decide your future engagement level with them.
# 5. Use data to come up with decisions
Hotels generally utilize competitive intelligence tools to understand the market better. Sometimes, hoteliers take all the available data, which can be an overwhelming exercise for the RM.
The data fed into your revenue management system or a BI tool will basically use your product’s visualization capabilities. The thumb rule of data analytics is – “Garbage in – Garbage out”!
And remember that decision making can be unproductive with huge volumes of obsolete data. So as an RM, you have to analyze active booking windows on just the major channels and create buckets, to highlight major booking periods.
Since every channel attracts a different segment of business, booking patterns for such segments need not be the same.
Also, as an SRM you can track your competition on every channel bucket followed by its active booking window. This might help you identify certain key data points that can drive results for your hotel.
Thus as a smart revenue manager, you cannot afford to ignore Customer Lifetime Value (CLV). The need of the hour is that you realized that the beginning of new age methods is your key to unearth the world of predictive, big data driven and revenue management strategies!
Stay connected for more insights on the revenue management mantras in Part II of this blog.