Hotels that take a strategic approach to revenue management (RM) will sell more room nights at the right price, and are better placed to thrive in a challenging environment.
Marta Varela, Director of Revenue Strategy at Barceló Hotels & Resorts, who will be speaking at the upcoming Revenue Optimisation & Growth Summit, Amsterdam, Nov 26-27, understands this. "Hotels have limited inventory which cannot be increased as desired or when demand rises. So it is important for hoteliers to accurately anticipate future demand with the objective of maximising revenues from the rooms that are available," she says. According to Varela the most important thing is for hoteliers is to prepare the most accurate forecast and from there invest time in managing exceptions.
Also taking RM seriously is Laura Lo Mascolo, the CEO and founder of Interlude Hotels & Resorts, a collection of small boutique hotels and accommodations. With a focus on operation management, revenue and sales, Interlude's goal is to deliver a tailor-made product with a strong experiential focus. Mascolo, who will also be sharing her insights in Amsterdam, is keen to "debunk some false myth that very small boutique hotels cannot benefit from revenue strategies".
As Daniela Hupfield, Commercial Director, Thomas Cook Hotels & Resorts, stresses: "Increasingly revenue managers have to become control freaks. They need to know their markets and clients really well in order to manage internal expectations and avoid short-sighted decisions."
While Interlude, Barceló and Thomas Cook are all taking a more strategic approach to revenue management, there are many small to medium and independent hotels that are missing a trick. Klaus Kohlmayr, the chief evangelist at technology firm IDeaS Revenue Solutions, estimates that there are probably around 80,000 hotels as a primary target for RM technology, and of those only 20,000 are already working with a firm like IDeaS. While IDeaS is one of the larger players, it is certainly not the only one. Rategain, Capterra and Travel Tripper, which recently merged with Pegagus, are among the others that have spotted the opportunity.
3 Dos and Don'ts At the upcoming Amsterdam show, expect to hear top tips from a range of hotel companies that are making headway with RM. Among these:
- Invest in a good central reservation (CRS) with a two-way interface and a sound revenue management system (RMS) that is linked to the property management system (PMS).
- Have a rate shopper, benchmark tool, online reputation service as well as a channel manager. Most of this software can also be connected to the RMS, which will ensure that any decisions also take into consideration external inputs obtained by these systems.
- Put procedures in place to constantly check where your inventory and rates are appearing, and read contracts carefully. Limit the number of contracts you have and ensure you have strict performance criteria.
- Rely solely on online travel agents like Expedia and Booking.com, or wholesalers, for your distribution strategy. It is crucial to understand and control your distribution pipeline.
- Hand out rates willy-nilly.
- Ignore other issues that touch on RM like ensuring regulatory compliance with the new payment services directive PDS2.
To hear more RM insight and top tips from accommodation providers like Thomas Cook, Interlude, Barceló, Yotel, Louvre Hotels, Kempinski, among others, join us for the first ever EyeforTravel Revenue Optimisation & Growth Summit, Amsterdam, Nov 27-27.