3 Must-haves for Revenue Management Success
If you pay attention to trends in hotel technology marketing, you may have noticed a real surge in content marketing campaigns from a wide variety of suppliers, using “revenue management” keywords extensively throughout their published articles. Whether the solution is a property management system (PMS), housekeeping management or a digital marketing platform, there are certainly many opportunities within a hotel business to drive more revenue or optimize existing processes. So what are the must-haves for revenue management success? LodgIQ has identified these three must-haves for a robust revenue management strategy:
Integration
Cornerstones for hotel revenue management success go beyond which particular brand of property management system, channel manager or booking engine you have deployed at your hotel business. The ability for these key transaction systems to streamline the labor-intensive elements of your daily workflow is a key benefit from tightly integrated systems. Manually re-keying online bookings into your PMS. Updating multiple online travel agencies (OTAs) extranets with your availability and rates for the next 60-90 days. These are daily tasks for many hotels which beg to be streamlined for greater efficiency.
Beyond these key transaction systems, online reputation management and rate shopping systems offer valuable data analytics that provide visibility into a particular area of a hotel’s position or performance in the market, relative to their competitors or the entire market. The issue here is by having multiple systems and a wide collection of data is that everything is segregated. Certainly it’s important to measure and monitor your price value position in the market, but what about the underlying market dynamics themselves? Have market conditions changed to the extent that you need to re-imagine what data is necessary to gain a better view of demand?
Effective revenue management is certainly based on integrated systems to ensure hotels can react quickly when they need to. As a minimum, a revenue management system should be integrated with the property management system and online distribution platform (CRS or channel manager). Integration with demand sources such as local events, destination demand, weather, foreign exchange rates and flight schedules will provide more insight into market demand and lead to more reliable recommendations.
Visibility
The big disruptor in the lodging and hotel accommodation sector is Airbnb and similar home-sharing sites. Current valuations help to illustrate the rapid rise of the home-sharing juggernaut. Airbnb is valued at $25.5 billion, which is more than Expedia’s market cap of $16 billion and 40% of Priceline’s market cap of $64 billion.
The challenges for revenue management start with the increased room supply in the destination. Room supply from vacation rental properties is dynamic and can be seasonal, rather than a fixed amount of apartments per market. Pricing becomes a more complex evaluation when the same consumers consider a hotel or private apartment as an option for their next business or leisure stay.
Hotel management companies have started to take a more active role in the emerging vacation rental sector. AccorHotels acquired the luxury home rental company Onefinestay and made the point that their loyal corporate guests want alternative accommodation for certain types of travel, such as family vacations. Their view is that they should be able to offer that type of accommodation, combined with their hospitality service standards, in order to really deliver what their guests want.
It’s clear that today’s consumer can book a hotel, villa or apartment just as easily across brand websites or online travel agent sites. Which stresses the point that hoteliers need to take more action. It’s critical for hoteliers to broaden their view by including appropriate vacation rental product comparisons and ensure their pricing strategy is aligned with market demand for their destination.
Alignment
Once system integration has been optimized and the right type of data is included to measure the true market demand for your hotel destination, it’s critical for hotel management teams to be aligned on the long-term strategic plan as well as short-term tactical campaigns.
Communication within the sales, marketing and revenue management team members of a hotel should go beyond a weekly or monthly revenue meeting. Armed with reports such as forecasts and booking pace, it’s the collaboration among team members that is important for sustained success.
Revenue management technology is not usually known for intuitive design or providing collaborative tools. But to ensure hoteliers make the most effective decisions on a daily basis, analytic systems must be intuitive and designed for cross-function collaboration. The ability to track key performance metrics integrated with team discussion threads, notes or comments will help teams stay aligned and moving forward as a team.
Revenue management success begins with a clear understanding of the consumer and market dynamics for a destination. Who a hotel thinks its competitors are may not be the same anymore. The integration of technology will result in a platform that can efficiently process greater volumes of bookings and pricing decisions. Taking a broader look at destination demand signals, including vacation rental data will ensure revenue management decisions aren’t based on a sub-set of demand data and achieve suboptimal results.
Integration
Cornerstones for hotel revenue management success go beyond which particular brand of property management system, channel manager or booking engine you have deployed at your hotel business. The ability for these key transaction systems to streamline the labor-intensive elements of your daily workflow is a key benefit from tightly integrated systems. Manually re-keying online bookings into your PMS. Updating multiple online travel agencies (OTAs) extranets with your availability and rates for the next 60-90 days. These are daily tasks for many hotels which beg to be streamlined for greater efficiency.
Beyond these key transaction systems, online reputation management and rate shopping systems offer valuable data analytics that provide visibility into a particular area of a hotel’s position or performance in the market, relative to their competitors or the entire market. The issue here is by having multiple systems and a wide collection of data is that everything is segregated. Certainly it’s important to measure and monitor your price value position in the market, but what about the underlying market dynamics themselves? Have market conditions changed to the extent that you need to re-imagine what data is necessary to gain a better view of demand?
Effective revenue management is certainly based on integrated systems to ensure hotels can react quickly when they need to. As a minimum, a revenue management system should be integrated with the property management system and online distribution platform (CRS or channel manager). Integration with demand sources such as local events, destination demand, weather, foreign exchange rates and flight schedules will provide more insight into market demand and lead to more reliable recommendations.
Visibility
The big disruptor in the lodging and hotel accommodation sector is Airbnb and similar home-sharing sites. Current valuations help to illustrate the rapid rise of the home-sharing juggernaut. Airbnb is valued at $25.5 billion, which is more than Expedia’s market cap of $16 billion and 40% of Priceline’s market cap of $64 billion.
The challenges for revenue management start with the increased room supply in the destination. Room supply from vacation rental properties is dynamic and can be seasonal, rather than a fixed amount of apartments per market. Pricing becomes a more complex evaluation when the same consumers consider a hotel or private apartment as an option for their next business or leisure stay.
Hotel management companies have started to take a more active role in the emerging vacation rental sector. AccorHotels acquired the luxury home rental company Onefinestay and made the point that their loyal corporate guests want alternative accommodation for certain types of travel, such as family vacations. Their view is that they should be able to offer that type of accommodation, combined with their hospitality service standards, in order to really deliver what their guests want.
It’s clear that today’s consumer can book a hotel, villa or apartment just as easily across brand websites or online travel agent sites. Which stresses the point that hoteliers need to take more action. It’s critical for hoteliers to broaden their view by including appropriate vacation rental product comparisons and ensure their pricing strategy is aligned with market demand for their destination.
Alignment
Once system integration has been optimized and the right type of data is included to measure the true market demand for your hotel destination, it’s critical for hotel management teams to be aligned on the long-term strategic plan as well as short-term tactical campaigns.
Communication within the sales, marketing and revenue management team members of a hotel should go beyond a weekly or monthly revenue meeting. Armed with reports such as forecasts and booking pace, it’s the collaboration among team members that is important for sustained success.
Revenue management technology is not usually known for intuitive design or providing collaborative tools. But to ensure hoteliers make the most effective decisions on a daily basis, analytic systems must be intuitive and designed for cross-function collaboration. The ability to track key performance metrics integrated with team discussion threads, notes or comments will help teams stay aligned and moving forward as a team.
Revenue management success begins with a clear understanding of the consumer and market dynamics for a destination. Who a hotel thinks its competitors are may not be the same anymore. The integration of technology will result in a platform that can efficiently process greater volumes of bookings and pricing decisions. Taking a broader look at destination demand signals, including vacation rental data will ensure revenue management decisions aren’t based on a sub-set of demand data and achieve suboptimal results.