June 9, 2020
Adaptability and resilience in the hotel industry is essential for long-term success. What is not always recognized during disruptive times is that the role of advanced revenue management activities can contribute to recovery as much as they can to profitability under more ideal circumstances.
How does revenue management strategy help to position hotel organizations for success as they get on the road to recovery? What is the key role that technology plays in that exercise, and what kinds of functions must be in place to get the best results during a time of uncertain demand? Let’s explore those questions here.
Rethinking what revenue management can do starting with data
The best revenue management strategies all begin with a common denominator – the data. This includes the standard pricing and cost data. It can also include historical data that helps to provide useful comparisons to other points in history similar to the present. Historic events like the early 2000s SARS outbreak and economic downturns in 2008 and 2009 are common starting points as industry leaders consult general market data in reference to those past conditions to inform a strategy in periods of low demand.
Today, revenue managers can go even deeper using their company’s own data. Advanced revenue management solutions collect the relevant company data to get a clear picture of who is booking and from where, the channels used to make that booking, and other points. Revenue managers can then work with sales and marketing in a more informed and effective way to make better use of resources to build competitive momentum. With real data helping to shed light on the road ahead, RM solutions enable hoteliers to reduce uncertainty even when demand and incoming revenue is temporarily disrupted.
Creating a clearer vision by unifying systems
Under all circumstances, revenue management and pricing tools serve a vital purpose; to bring clarity and focus to an organization’s activities to make the best use of resources. From there, they are better able to create an optimized offering. During a downturn, this is even more important. Making sure that revenue management solutions across all relevant properties and brands are connected to property management, back office solutions, sales and catering, and others is essential to this key purpose. The best way to do that is to unify all systems in the cloud.
Keeping track of trends and data points in a piecemeal way with every location as its own siloed data center and with systems connected only by manual spreadsheets slows the process of analysis and recovery. Cloud infrastructure and delivery enables organizations to see key data from a more inclusive perspective across locations and business areas all at the same time when necessary. The kind of adaptability and resilience that will be needed in the next decade will rely on how quickly organizations can respond to market demands and periods of disruption in a unified manner as well as a prompt one. Revenue management efforts connected to a wider technology and data eco-system plays a significant role in achieving that.
A balance between automation and human intervention
Once a hospitality organization is able to focus on past and present data as a means to inform strategy and has established a platform to be adaptable to emerging trends and circumstances, an important question remains; what are the must-have elements to build a strategy from there? Emerging technology plays an important part. But so do revenue managers themselves.
For instance, machine learning and dynamic algorithmic functions within it is emerging as a necessary element to building competitive momentum. Expertise and experience on the part of revenue managers must go hand in hand with the technology to account for this. Glass box RM solutions that allow for this interaction between automation and human intervention is essential to achieving the right balance. From there, charting a course to recovery is determined by the best of both worlds; automated processes and speed of the technology matched with the experience and savvy of the revenue manager.
It’s important to understand how versatile the role of revenue management and associated solutions are, especially during periods of disruption. A big part of that means separating the myths from the facts, zeroing in on winning strategies based on data, and understanding how essential technology enables those strategies.
To learn more, our Revenue management and a path to hotel recovery panel discussion that includes contributions from key industry and revenue management experts here at Infor is an informative guide.