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?
Hotel Systems Integration
Cornerstones for hotel revenue management success go beyond which particular brand of property management system, channel manager or booking engine you run at your hotel. The ability for these systems to streamline the labour-intensive elements of your daily workflow is a key benefit from tightly integrated systems. Manually re-keying online bookings into your PMS. Updating multiple OTA 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.
But 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. More systems and more potential for data silos. 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 relies 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 system recommendations.
Market Demand 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{97f5de9008dbce478b9914384118bb17bc275beb18053f10d4c63e347dc71139} of Priceline’s market cap of $64 billion.
The challenges from a revenue management perspective 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 consumer considers hotel and private apartment as options 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 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. Hoteliers need to broaden their view of their market by including appropriate vacation rental product comparisons and ensure their pricing strategy is aligned with market demand for their destination.
Hotel Team Alignment
Once systems integration has been optimized and the right type of data is included to measure the true market demand for your hotel destination, it’s critically important for hotel management teams to be aligned on long-term strategic initiatives 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 if we want to ensure hoteliers make the most effective decisions on a daily basis, their analytic systems must be intuitive and designed for cross-function collaboration. The ability to track key performance metrics integrated with discussion threads, notes or comments will help teams stay aligned and provide a historical record of the rationale behind prior business decisions.
Revenue management success begins with a clear understanding of the consumer and market dynamics for your destination. Who you think your competitors are may not be the same anymore. By integrating technology, you will have a platform that can efficiently process greater volumes of bookings and pricing decisions. Taking a broader look at your destination demand signals, including vacation rental data will ensure you don’t base your revenue management decisions on a sub-set of demand data and achieve suboptimal results.
Written by Erik Munoz – Chief Commercial Officer at LodgIQ
