Revenue management forms the foundation of any successful hotel business. Without a clear strategy, you lack the visibility needed to identify opportunities to maximise revenue – or even see how you’re tracking against your competitors.
If you don’t have the experience, where can you start? Here are the key ingredients needed to successfully implement a revenue management strategy at your hotel…
1. Hire the right people
If you invest in good talent, you’ll thank yourself later. Stefan Wolf, senior vice president revenue & distribution strategy for the ONYX Hospitality Group, says:
“If you are starting in the revenue management journey, this is a critical investment. Hire the right person, who has the ability to analyze numbers, and more importantly is able to communicate what these numbers mean to an audience who isn’t familiar with revenue management.”
“Revenue management is full of introverts, but it is important to have a revenue manager who is able to communicate their strategies to all stakeholders. This allows everyone to understand why recommendations are being made and get behind it. Without being able to communicate effectively, the other stakeholders in your hotel would be reluctant to give it a shot.”
2. Tap into market demand
Hoteliers need to keep a pulse on market conditions and track the right metrics on a daily basis – and with a view to the future.
This is almost impossible to do manually. Hoteliers should look for a tool that:
- Provides real-time access to current market demand
- Allows for easy generation and exporting of reports
- Allows hoteliers to set rate strategy rules and be alerted instantly
Interestingly enough, Skift reports that less than 15% of the global hotel market is using revenue management technology,even though revenue management solutions have been in the market for over 25 years.
This may be because of the misconception that such technology is overpriced. But pricing intelligence tools like Prophet exist to cater to those hotels that want real-time intelligence at an affordable price.
3. React fast and deploy pricing strategies in real-time
Making sure you’re able to quickly react and update your pricing instantly is key.
Eva Llopis, now revenue manager at Gatrooms, says that “everything needs to be accompanied by agile pricing management, and reacting very quickly to the market’s changes. To do so, you need a good channel manager that allows you to manage rates and availability, closing channels or rates plans in order to optimise your room sales.”
Meritxell Pérez from HotelsDot, a company specialising in revenue management and online marketing mostly for independent hotels and small chains, says “it’s fundamental to have the technological tools that help you to speed up the management of all the data and variables we analyse daily… I think a tool like SiteMinder[‘s Channel Manager] is essential, or any other that could help you in this way. SiteMinder has 100% reliability, and I am really happy with how it works – the usability is very intuitive for creating reports, and we get data that it is very useful to us. We use these reports to see how sales are performing in the different channels, and the support team is very efficient, they answer quickly.”
It’s clear that with the right people and the right systems in place, a hotel is in the best position to maximise revenue for the business.