Cornell Study Examines Emerging Trends in Hotel Revenue Management
Revenue management professionals suggest that total hotel RM is the wave of the future and that, going forward, technology and data analytics will help enhance RM decisions in the hospitality industry. These are among the findings in a new study from the Cornell Center for Hospitality Research (CHR) based on surveys designed to determine how hotel RM practices have evolved over the past six years and where they are headed.
Survey participants noted that the application of hotel RM has become more strategic, and more centralized, but that change in these areas has been slower than expected. Likewise, the use of mobile technology and social media as distribution channels for the industry remains a work in progress, poll respondents said.
Some 400 hotel RM officers participated in the research, which represents an update of a similar report on emerging trends in RM conducted by the author in 2010. A full description of the study, "The Future of Hotel Revenue Management," by Sheryl E. Kimes, is available from the CHR. Kimes is a professor of operations management in the Cornell School of Hotel Administration.
Survey respondents indicated that it is now more common for RM to be a stand-alone department than it was in 2010, integrated with marketing efforts. "This has been a big change in the last five years," one participant said. "In some organizations, RM is increasingly a sub-department under a larger umbrella called 'commercial department' which houses sales, brand, marketing, e-commerce, and revenue as it is recognized that all of these sub-departments don't work in silos."
Other projections include a belief that pricing will be affected by advances in data analytics and that gross operating profit, or a similar profit-centric measure, will replace RevPAR as the performance metric of the future. In addition, a significant percentage of survey respondents think that performance will be measured per available square foot, rather than per available room.
When asked to evaluate which non-rooms areas RM would be applied to in the next five years, respondents identified function space as the most likely, followed by restaurants and spas.
About the Center for Hospitality Research
The purpose of the Center for Hospitality Research is to enable and conduct research of significance to the global hospitality and related service industries. CHR also works to improve the connections between academe and industry, continuing the School of Hotel Administration's long-standing tradition of service to the hospitality industry. Founded in 1992, CHR remains the industry's foremost creator and distributor of timely research, all of which is posted at no charge for all to use. In addition to its industry advisory board, CHR convenes several industry roundtables each year for the purpose of identifying new issues affecting the hospitality industry.
Center Members: Accenture • Access Point Financial, Inc. • Barclaycard US • Cvent • Davis & Gilbert LLP • Deloitte & Touche USA LLP • DerbySoft • Four Seasons Hotels and Resorts • Fox Rothschild LLP • Hilton Worldwide • Host Hotels & Resorts • Hyatt Hotels Corporation • IDeaS Revenue Solutions • InterContinental Hotels Group • Jumeirah Group • Marriott International • NTT DATA • Preferred Hotels & Resorts • priceline.com • PwC • The Rainmaker Group • RateGain • ReviewPro • Revinate • Sabre Hospitality Solutions • STR • Taj Hotels Resorts and Palaces • Tata Consultancy Services • Wipro EcoEnergy • Wyndham Hotel Group
