According to hoteliers who participated in the survey for The 2015 Smart Decision Guide to Hospitality Revenue Management, the top challenges include selecting the right technology solution, hiring the right talent (e.g., revenue managers with the requisite skills and experience to do the job) and engaging the right revenue management consulting services, for those companies that wish to outsource the function or leverage third-party expertise to enhance their in-house capabilities.
This article is excerpted from The 2015 Smart Decision Guide to Hospitality Revenue Management. To read the eBook in its entirety, please click here.
Also, be sure to check out The 2015 Smart Decision Guide to Hotel Property Management Systems by clicking here.
There is no shortage of challenges when it comes to next-generation Hospitality Revenue Management. According to hoteliers who participated in the survey for The 2015 Smart Decision Guide to Hospitality Revenue Management, the top challenges include selecting the right technology solution, hiring the right talent (e.g., revenue managers with the requisite skills and experience to do the job) and engaging the right revenue management consulting services, for those companies that wish to outsource the function or leverage third-party expertise to enhance their in-house capabilities.
Of course, the questions that prospective buyers will want to ask of solution providers is bound to vary depending on their situation. Different hotels – even those within the same category or typology (e.g., single-property luxury beach resorts) – are likely to have different customer demand patterns, different profile mixes and different ancillary revenue streams.
That said, prospective buyers of Hospitality Revenue Management solutions are also likely to have many questions in common – pricing questions, in particular.
Given access to the right data, and provided that the individual running the queries has the appropriate skills and knowledge base, a Hospitality Revenue Management solution should be able to answer all of the day-to-day questions that are needed in order to maximize the company’s financial performance.
Such questions might include: By how much should we increase or decrease our rates for a given type of room? How many customer groups, and what size groups, should we accept on a given day? How much should we charge walk-in customers? What should be the floor and ceiling for our rate range?
Other common questions include: Are the changes in demand and bookings likely to represent a short-term or long-term pattern – and, if the latter, what actions should we take response? To what extent should we discount negotiated rates? What should be our rack rates for the coming year? What discounts and promotions, and to what target customer segments, are likely to perform well right now and in the near-future? What discounts would likely dilute profits and should we therefore avoid? To what extent should we mark up our premium rooms, based the current and near-term demand patterns? What, if any, competitors’ price moves would likely affect these demand patterns and how should we respond should those possible moves become reality?
Importantly, not all pricing queries can be anticipated in advance. Some pricing questions may need to be queried on an ad hoc basis. Hence the importance of flexibility in analysis and reporting. Out-of-the-box functionality may be insufficient to satisfy the needs of some of the more sophisticated revenue managers. Also, flexibility is important when it comes to setting pricing rules, flagging special events, changing customer segmentation schemes, etc.
In all cases, the interface of a Hospitality Revenue Management solution should be flexible enough that users can define dashboards to meet their needs and suit their style. While notifications should drive the workflow, users should also be able to look under the hood. They should be able to dive into price sensitivity data, for example, and quickly see what inputs are behind the pricing recommendations at a detailed level. They should not have to wait until the price sensitivity of demand effects appear in actual booking statements to understand the impact of their overrides and determine whether they made the right “re-optimization” decisions. It should be easy to optimally manage pricing and available controls.
Revenue managers and other users should not be spending most of their time extracting and manipulating data, as is often the case today, but, rather, making strategic decisions that drive revenue growth.
To download a complimentary copy of The 2015 Smart Decision Guide to Hospitality Revenue Management, please click here. Or to download The 2015 Smart Decision Guide to Hotel Property Management Systems, please click here.
About Smart Decision Guides
Smart Decision Guides from Starfleet Media serve as definitive resources and required reading for decision makers researching selected niche markets with the intention of making a purchase decision. The content is independently produced, without editorial involvement from company underwriters, providing for unbiased, fact-based information and buying recommendations.