Hope you have gone through and implemented what we had shared in Part I of this blog series. Now you will agree that a revenue manager has to put on several hats in this role. Considering the complexity of their job role, a revenue manager can be rightfully termed as a – forecaster, strategist, system design specialist, data analyst, marketing guru, talent manager, social media expert, data miner, sales support and also a channel manager. There’s a lot going on in his head on a typical day at job!
As a matter of fact, it is always challenging to analyze and decipher the seemingly endless amount of data and not overlook the big picture, while coming up with a comprehensive and innovative revenue generation strategy for profit maximization.
In order to help SRMs (whom we have termed them as ‘smart revenue managers’ in this blog) stay on track, here’s a list of some more interesting tips which will blow your boss’s mind away for sure!
1. The ability to tell apples from oranges: For any hotel that is setting up benchmarks in the market, they need to understand the basic differences between their benchmarked product and the competitor’s product.
For example, my deluxe suite has a certain size in square feet and contains several amenities. Here, I have to trace out the best comparable product from my competitor’s inventory. Thereafter, I have to focus on the competitor’s product packaging.
For any seasoned revenue manager, the definition of benchmark is set according to the guest’s needs. In that case, the SRM should adopt a smart approach by talking to guests, studying historical booking data, forecasting future pricing data and also deriving budget buckets.
Such buckets will allow the SRM to benchmark all hotel offerings at par with competitor offerings. Besides, they can make some value points by meeting the target-guest-pool’s budget constraints.
2. Demand forecasting and demand mapping go hand in hand: Every hotel has a set of distribution partners, who can roughly predict the property’s business pattern.
In order to effectively analyze all business operations and predict every possible revenue stream, the SRM needs to examine historical booking data as well as study the guest source markets. Thereafter, the results need to be mapped against ongoing demand of the hotel in its present location.
Such a gap analysis helps revenue managers identify fresh markets and recognize demand partners. In the end, it opens the doors for additional business.
3. Collide head-on with the issue to resolve it: Doubts about the authenticity of online guest reviews will never fade out. Yet, the impact of guest feedback received on a hotel’s brand website or Social media page, is always treated as “reliable information” by potential guests.
Hotels across the globe have lately realized that online guest reviews are important! After all, potential holiday-goers apply the “law of averages” when it comes to analyzing online feedback/reviews. Even a single negative review cannot be kept unaddressed. Otherwise, the hotel’s complete value perception gets impacted.
This value perception has a huge role to play, when it comes to rate evaluation, causing hotels to track and respond to reviews via smart sentiment analysis tools. After all, if a hotel shoots to fame, then the resulting revenue is due to the benefits reaped from favorable traveler reviews.
These sentiments can be analyzed by an SRM to come up with a Value Index (VI) or a comparative index to build a proper rate decision-making process.
4. Historical data is not the only basis of forecasting anymore: While most hotels still rely heavily on historical data, basing pricing decisions and forecasting demand by this method only gives inaccurate results. As an alternative, hoteliers syndicate future competitor rates with competitor-based Value Index (VI) as well as keep an eye on other demand related variables.
As and when new events and actions take place, strategies based on historical event-action configurations render favored consequences. Besides, combining current events with information provides new opportunities and endless possibilities.
5. Customer Lifetime Value is the holy-grail for your hotel: Smart revenue managers have to look out for Customer Lifetime Value (CLV). They have to note down all the changes that make one genuine difference, which is not a hype or illusion. Gauging consumer & market dynamics clearly and identifying the exact compset, will help your hotels to efficiently process greater bookings and pricing data. Encouraging loyalty behavior through reward program investments helps boosts CLV.
Time is ripe for a revolution in revenue management. Go ahead and take a big leap into the world of predictive, big data driven, revenue management strategies and bid goodbye to historical demand-driven practices.
By incorporating all the previously discussed approaches (in case you missed part I of this blog, click here), your hotel will surge ahead of the competition and generate more revenue, provided you roll out the strategies with a careful combination of technology, agility and analysis.