Four areas for revenue professionals to focus on for the year ahead, according to the HSMAI APAC Revenue Advisory Board.
The distribution landscape is always evolving and 2015 has started with a bang, or two! With the consolidation of the big brand OTA’s along with the emerging new channels, there is a lot for the revenue manager to think about. Things are developing so quickly that it is difficult to see how to adapt and select the right opportunities. The most successful hoteliers are adapting their distribution strategy in order to optimise revenue and profit from the different channels. If you’re not changing your distribution strategy this year, you might be falling behind; don’t expect the same results from a vastly different landscape.
When partnering with intermediaries, identify which are most valuable, who to align with, and what unique offers to provide through those channels. Know the cost per channel and optimise your channel contribution. Measure, test, and measure again.
Revenue Management Culture
Silos still exist in many organisations between sales, marketing and revenue management. All organisations can benefit from optimising revenue and profits (and operating efficiencies) when these disciplines converge.
Ensuring success means building a culture across your company that understands and embraces revenue management practices and respects and understands the role of revenue management and its ability to improve profitability for hotels of any size. More revenue management tools are available to hoteliers to assist decision-making but revenue managers should also use their own experience to adapt and adopt dynamic pricing tactics.
Total Revenue Management is key, not just rooms revenue. Take into account how different guest types drive non-room revenue through Restaurants, Function space, Spa, Touring and other ancillary revenue.
RM culture will be a hot topic at our upcoming Revenue Optimisation Conference in Singapore April 22nd, 2015.
No hospitality trends piece would be complete without a reference to digital and the changes coming via the mobile wave. You will need to understand the net impact of technology in the travel space – especially adoption by upcoming generations. Firstly, consider how technology is changing your guests’ experience, not just during the shopping and booking process, but also when they are in-house. Begin by trying to figure out how to improve your customer experience before you start trying to calculate the impact on revenue. What are your competitors planning or doing? Will improved digital technology be able to steal customer share? For independents and smaller chains, can you compete with big brands who have deep pockets when it comes to technology development?
What’s really going to make the difference in big data is what data we work with as sales people, marketers and revenue managers and what we do with that data once it is collected.
Data today comes in all types of formats and the volume of data can feel a bit overwhelming. Try to cut through the volume of data and focus on the most valuable data for your task. Determine which data you already collect, and which data you need to start collecting. Work with the marketing team to streamline how to test and measure the data, then evaluate whether what’s being collected is actually being used. Is it improving profitability? Technology can assist and we are seeing enhancements to revenue management software to not only display and report on the massive amounts of data, but incorporate it into their demand forecasting and algorithms in a way that enhances the forecasting performance.
To continue to compete effectively in 2015, marketing, sales and revenue management will have to mine for opportunities where they can market to current and potential guests effectively, and where they can truly meet the needs of their guests. All while monitoring a constantly shifting landscape of consumer behaviour and booking channel preferences.