Revenue management is a vital skill for hoteliers to get to grips with, but mastering even the basics can be daunting. Thankfully, plenty of help is available out there. A good starting point is to nail down exactly what revenue management actually is. A widely-accepted definition of the term is simply providing the right client with the right room at the right time and price, through the correct distribution channel and with the most efficient level of commission. This model was originally adopted by the airline industry and began to be seen in the hotel and hospitality trade in the 1990s.
A successful revenue management strategy requires hoteliers to have a deep understanding of their own business. This means business owners and marketers should be fully aware of aspects such as sales, historical occupancy rates, nearby establishments and competitors, customer satisfaction, ideal target audience and past weather conditions.Having a tight grip on all of the above should be the first step in any revenue management initiative.Creating a dynamic pricing plan is a further building block of such a campaign. This means that hotel owners should adapt their room rates in accordance with supply and demand.That way, the accommodation can maintain a steady level of business throughout the year.
Hotel booking engine is also integral to the success of a hotel. This term refers to monitoring when rooms are reserved and for which dates. This allows a manager to see how far in advance their accommodation is being booked. Armed with these details, they will then be able to clearly see in following years whether demand is stronger or weaker than in the past.Possessing a good knowledge of such information will allow hoteliers to budget and forecast with confidence for the coming weeks, months and years. This will then have a knock-on effect on their knowledge regarding required staffing levels, ideal room rates, any accommodation offers and discounts that they may need to roll out, as well as a host of other vital details. Increasing direct bookings may be the primary reason for a hotelier to work on a revenue management strategy.
However, once again, there are several key steps needed in order for this to happen.It is vital that any scheme is launched with a clear end goal in mind. Failing to do so could result in a confused strategy that falls short of delivering the required levels of success.Once the end targets are in place, the hotelier should become immersed in information about their consumer base. Any details held on file on past visitors should be used to inform future plans. This may involve examining any links between previous guests, the times of year they visit, their home location and how they booked their stay.
From here, a detailed strategic plan should be put in place. This should be built on facts that the hotelier has amassed through the previous steps. They should not base this process on instinct or guesswork – the raw data must be given preference. These steps may ultimately result in increased profitability for the business. This could occur thanks to the business determining the true cost and value of each of the hotel’s marketing channels.This may entail examining website traffic per location, source and device and then checking how the booking conversion rate stacks up against these figures.
However, it is not just online channels that should be given the once over, it is vital that phone and face-to-face bookings are also studied. This will allow the hotelier and marketing team to gain an understanding of the full picture, allowing any potential weaknesses and areas for improvement to be pinpointed.
