Classify customers according to their requirements increases hotel revenue. That is the objective of the Anglo-Saxon concept – Total Costumer Profit Optimization. This process maximizes the profitability of all hotel services offered and the hotel will fullfill all customer requirements.
Hotel News now analyzes the implications for the industry. The purpose of its implementation in Revenue Management strategy is to have a better customer understanding: their behaviors, their needs, their spending levels etc. It will also help revenue managers or reservation managers to meet contingencies such as the normal cancellations and market variability.
John Wallace, Rainmaker Group Director, says the Total Customer Profit Optimization launch is “difficult, although the definition is clear,” because it forces hoteliers to question how they are selling their rooms. Another essential point for understanding the complex equation of the Revenue Management element is demand creation. Veronica Andrews from the STR Lodging chain notes that there are two basic ways to stimulate:
Communicate with your customers through advertising campaigns that launch special hotel offers that capture their attention. Give excellent service. This is the best way to spread the word and increased reservations are guaranteed. Andrews says the Revenue Management department needs to interact with other areas and agree on all measures that are adopted. Defined as Informed Decisions that come from from ideas and opinions of the entire team.
The expert also gives four tips to the revenue managers so when they propose these key decisions they are successful:
1) Enhance the intellectual capital. This is the strong point. It is essential to be fully aware of all possible customer and market demand knowledge.
2) Establish coordinated and beneficial initiatives so that each hotel can focus actions in the right customer segment.
3) Technology Support. The revenue managers should be able to control systems like PMS or CRS so as to effectively access all the data provided regarding occupation.
4) Business Intelligence. Monitoring tools already exist giving hoteliers all the information of why guests choose their hotel or not. All this information should be examined and hotel facility strengths highlighted.
According to, Paul Wood, Greenwood Hotel chain Vice President, Revenue Management professionals need to rethink the business model, as Wallace says. “It’s not about stopping selling rooms, but to see how it is being done and why. It is a matter of changing the perception. ”
His point of view is that all hotels should approach the different distribution channels, understanding their differences in a “holistic” way. Especially in the case of Online Travel Agencies (OTAs) “They are very powerful reservation channels and their importance must not be ignored. A hotel chain can have the best e-commerce and website, but the OTAs are still the first choice for travellers, “he concludes.