Revenue Management- A Competitive Differentiation
Decision making has completely changed thanks to Big Data Analytics. Big Data optimizes results by allowing hoteliers to adjust room rates accordingly and offers important information about the traveler. By understanding your ideal guest, you can offer personalized services and enhance the guest experience.
Revenue Management helps revenue managers use hotel resources more efficiently. Advances in technology has changed the way hotel establishments optimize revenue and manage day-today tasks. RMS (Revenue Management System), has made it easier to manage “volatile product inventory.” It’s not only important to have the right revenue management strategy, but it’s also important to be backed by the right technology to optimize hotel revenue and profitability.
A more transparent market for the traveler
Consumers today make smarter buying decisions, so hoteliers are pressured to be more precise in forecasting upcoming demand and be able to offer special promotions at the right time. With the rise of OTAs, metasearch engines and other online distribution channels, it becomes more important than ever for hotels to have a strong value proposition and the right prices to attract travelers on different digital platforms. It’s important that revenue management, marketing and sales departments work hand in hand so that their hotel’s market positioning and strategy is in alignment with public perception.
Functionalities for a more technological reality
Staying up-to-date with the latest in revenue management doesn’t have to be stressful when you have the right technology. A revenue management solution can lessen your daily workload and help you efficiently manage your hotel’s marketing tasks. Revenue management technology offers many benefits to hoteliers. BEONx Here’s how an RMS can help improve your hotel’s profitability and distribution:
- Historical data and booking rate. A hotel’s historical data is traditionally stored in the PMS. By using historical data in basic demand forecasting, hoteliers can make the most of their inventory. Don’t risk leaving money on the table. With the right technology and information you can increase profitability during high and low seasons. Having the ability to predict traveler behavior and adapt to projected demand accordingly, will give your hotel an upper hand.
- Competitor prices. An RMS can provide valuable data about your competitors. By giving you access to information such as room rates, offers and conditions, cancellation policies, etc., in real time, hotels will have a much clearer picture about the general market. However, hotels shouldn’t be quick to slash their rates in a desperate attempt to fill vacant rooms, but instead opt for having a unique value proposition as this will be the best way to face fierce competition during “last minute” bookings.
- Macroeconomic factors and events. Historical data plays an important role in determining room pricing around a given event. Staying updated on local events and news can also help you adjust your rates to factors that are beyond your control, but can greatly influence demand. For example, some macroeconomic factors that would generate room rate fluctuations would be your country’s economic development, changes in transportation throughout the city and variations in fuel prices. With the right RMS, you can quickly adjust rates to market conditions.
- Flight data. The connection between flight travel and hotel demand is clear. The more flights scheduled for a destination, the greater the likelihood that travelers will look for a place to stay. Imagine that you find out a week in advance that your city’s airport is scheduled to have a massive arrival of travelers. What does this mean for your hotel? If these travelers match your target audience, your hotel is more likely going to see an increase in occupancy. Although some situations are more favorable than others, it’s important to adapt to any situation and connect with flights plus hotel. But of course, a good RMS already offers information about this type of product.
- Online reputation. Hoteliers are now more aware of their hotel’s online reputation and the impact guest feedback has on a traveler’s decision-making process. Price and online reviews are important to consumers so these factors should be top priority for hoteliers. Current revenue management systems take into account traveler perception to determine your hotel’s market positioning. Higher classified hotels are able to charge higher prices because guests have a higher perception of service quality.
- Meteorological factors. Having access to data like the weather is important for hotels to be able to predict demand. You can also get additional information by monitoring the local weather in source markets. For hotels and tourist destinations, the weather influences the market. Precise demand forecasts can condition your results and can even mean the difference between profit and loss.
- Business Intelligence. With today’s technology, advanced analysis modules can help hoteliers gather important information about their segments and help in the decision-making process. Because hotels have to consider many factors such as market sales, segmentation, channels, agencies, and rates, this enables interdepartmental collaboration and communication. From this stems the concept of total hotel revenue management- the idea of optimizing all revenue streams together as opposed to thinking of each department separately. When your hotel team works cross-functionally, you have a better view of where your hotel stands in the marketplace.
Revenue Management has a promising future in the hospitality industry. There are metrics like Net RevPAR and guest acquisition costs that are essential for Revenue Managers and owners for preparing a hotel’s strategic plan. There’s no denying that the revenue management department has become crucial to a hotel’s success and to departments like sales, marketing and accounting. Revenue management strategies play a big role in increasing a hotel’s bottom line. Decisions, for instance, are more proactive and directly connect profitability with tight margins. There’s an increasing need to capitalize, especially during lean periods. If you want to invest in technology and optimize your resources, BEONx ‘s dynamic revenue management solution can help you. Combining the right strategy, the right technology, and the right team will differentiate your hotel from the competition.