Finance

Here are the three main action steps in revenue management in the post-crisis period: 1. Break down the silos! The post-crisis requires a completely new approach to revenue management (RM), not going back to the old ways of doing RM.

While none of us have any idea when the virus outbreak will be contained and when currently closed hotels will be allowed to open again, we can and should get ready for the day which will eventually come. At the same time, we can't plan too early without proper data and information.Action A: Resist the temptation to hand over your inventory, promotions and rate strategy to the OTAs.

It's true that the hotel industry has been through many storms. However, it has never seen a black swan event like this one. As the leading brands expect revenues to decline by an unprecedented 70% or more, millions of people are out of work and we are still 3-6 weeks away from the peak of the crisis.

It is very important for hotels to maintain a detailed forecast for both the short term (more frequent) and longer-term (outside 3 months). If your property has an automated system that provides demand information, it will likely only be reliable for the short term.

Without a forecast it is difficult to understand all of the revenue opportunities for a hotel and how to weave them into a single, successful revenue strategy. Creation of this strategy has two components. The continual, repetitive forecast update process that is needed to adjust tactics to make the strategy come true is clearly better accomplished by automation.

In my opinion, day by day forecasting is even more important now than ever. At Crescent Hotels and Resorts, we believe this is an integral part of our strategy, as it conveys to our stakeholders our strategic intent by day by market segment.

Hoteliers who are unwilling to invest in the latest revenue management technologies are the ones “stuck in the rut.” Less than 5% of independent hoteliers have a revenue management system (RMS) in place, many branded hoteliers are stuck with their hotel chain's less than adequate RMS technology.

Is revenue management not keeping pace with today's world? How condescending to assume that a lack of reinvention every decade is a sign of incapacity. Think back to the promise that revenue management systems made: a property could see its revenue increase by a minimum of five percent by opting into an electronic revenue management system.

While having a revenue management system was a competitive advantage in the past, it's now commonplace. We are close to what the airlines are struggling with for years, they all use the same algorithms and they all end up with the same pricing.