It is essential to implement a Revenue Management strategy when running a hotel. Many hotels have a team just for this, but others chose a partner that offers them experience and knowledge backed by the best tools on the market, helping them put an excellent Revenue Management strategy into place.
Revenue Management is a central part of the hotel business and must be integrated and blended within the global commercial strategy.
To be able to obtain maximum gain from its potential when it comes to maximising income and reducing distribution costs, revenue management requires both a corporative strategy and operational capabilities, increasing profitability is always the final aim.
We have to take into account that there are many variables and determining conditions that influence this discipline, as well as changes in the hotel sector and the sales channels and a constant increase in distribution options. Faced with such a large offer, one has to choose which channels to appear on, which ones will really provide us with benefit, and when to appear on them. If we want a complete, short and long term strategy, that includes both Tactical and Strategic Revenue actions, but we don’t have the resources or the needed experience to perform the needed actions; a consultancy can help our hotel handle more of the aspects involved in managing the product, as well as to set both the basis and ongoing procedures for a profit aimed strategy.
A Revenue Manager will set priorities, marking clear and measurable goals that allow the hotel to optimise their results and reach its optimal revenue potential. It is essential to set the income according to market segments, implement sales strategies, evaluate the actual competition, set adequate rates and prices and plan the market demand cycles. This demand is the main focus when establishing intervention models and managing rates and occupation. If we are able to predict and make a correct forecast, we can reduce any uncertainty over our inventory, using different distribution channels to do so according to the client target as well as an optimal pricing, always bearing in mind possible variances resulting from market constraints, the hotel’s positioning and the edge over the competition.
ALWAYS UP TO DATE
Revenue Management is a complex discipline that requires continual training as well as knowledge of any changes in the sector that could affect our new Revenue Strategy. It is a challenge for any company to get all staff members to include Revenue management strategies in their day to day work, but when this is achieved the whole company is impregnated with the revenue culture and all hotel business if focused around it.
TOOLS: MEASURING AND CONTROL
To achieve an optimal Revenue management, there are a series of tasks that need to be carried out, such as producing reports, unifying all these reports to obtain a global vision, analysing pickup, groups, rates, competition, forecasting demand, setting rates, analysing distribution channels and updating prices on all the channels. When all these tasks are performed well the hotel will see an increase in income.
If there is no appropriate tool to do this work automatically it may mean, that due to the time lapsed while making decisions, these are no longer valid, or that the information is not analysed correctly and incorrect decisions are made.
Therefore, it is increasingly important to have a RMS that can perform this work in the shortest time possible, with the greatest precision. When choosing it is important to bear in mind:
- It must integrate with the hotels other systems, such as the PMS and CRS (the hotels sales systems).
- Carry out a precise prediction of the hotel’s different sales segments taking into account as much information as possible: historic, actual sales, competition, rejected bookings, etc.
- Set the optimal price per day.
- Recommend the optimal Revenue maximising distribution mix.
- Adapt the strategy to the hotel.
- Have control systems for qualified sales (negotiates, companies, etc.).
- Allow for total pricing, not just room rates, but also board, supplement, people, etc.
- Generate alerts for unusual situations such as occupation variances, pickup, refusals, competition, etc.
- Calculate the optimum group price calculating the income that will not be generated if the group booking is accepted.
- Have dashboards that display the hotels status at a glance and can be shared with all the other hotel departments.
Ultimately we must blend the Revenue Management strategy with the management tools that the hotel needs, always involving and training the whole team. The Revenue Manager will establish an adequate rate strategy: although essential, technological solutions and software, are just one part of the resources needed to carry out a real and complete analysis of the hotel’s situation at any time.
Revenue Management Experts
Idiso has much experience in training multinational companies in Revenue Management. It teaches different Revenue Management courses at universities, and is pioneer when it comes to introducing courses for hotelier professionals; the simulator used in their practical training is the same as the one used by many renowned American universities. Idiso has also developed its own Revenue Management Tool (RMS) and advises multiple companies in Revenue Management. Idiso has been providing consultancy, training and full hotel Revenue Management since 2011.