Visioning The Post-COVID Era In Revenue Management
Advertorial by Chinmai Sharma, President – Americas, RateGain
Visioning a Post-COVID Era in Revenue Management — Special Series
I have heard about the need for Revenue Management in the industry circles during this pandemic. The logic is if we are running 20% occupancy, then do we even need a Revenue Manager? This old school approach forgets the critical commercial role that today's Revenue Managers play. Maximizing visibility across channels, ensuring competitive pricing across rooms and packages, tracking parity across channels/affiliates, monitoring rate changes for competitive set across different booking horizons including intra-day, evaluating meta channels and related ROI, pushing the sales teams to the right segments is a lot of work which only a skilled Revenue Manager can manage - all while taking out the local OTA Market Managers for lunch! The role of Revenue Managers in creating demand and impacting the top of funnel marketing is often misunderstood.
- Reset the counter on historical trends (LOS, Booking windows, rate efficiencies), market segmentation, competitive set definitions, and pricing guidelines. Revenue Management executives will need to relearn their property and the local market.
- Leisure and drive markets are critical (corporate and groups not so much) during the current times. Focusing on leisure packages and social media marketing will be pivotal. Just opening the hotel is not a strategy.
- Playing more heavily on metasearch - more and more channels are enabling direct relationships with not so complex CPA / CPC models. Gone are the days when only the OTAs were displaying hotels on meta. Today's Revenue Manager needs to understand the true meta potential and manage the share of voice through acute ROI management.
- Booking windows and length of stay (LOS) have shrunk dramatically, making forecasting a lot harder. Also, some leisure and airport markets are seeing more frequent intra-day rate changes. Imperative to use the right data and pricing intelligence tools
- New business models are emerging that can cancel or rebook hotels if rates drop and also split two reservations back to back from different channels to give more value to the customer. It puts more pressure on a logical pricing and availability strategy. There is a real need in some locations to offer pricing and availability for day use or slots for fixed hours that needs the team to reimagine inventory management.
- There is a need to understand which channels are bringing in how much business in your catchment area - partner with providers who can give you 'Smart Distribution' for better intelligence and faster pain-free onboarding.
- Focus on out of the box ideas for capacity utilization. Revenue Managers will have to think about things like flat day use rates, monthly subscriptions for leisure guests to stay across a portfolio of hotels, capping the number of guests at a hotel for social distancing (and promoting it as limited availability), loyalty partnerships, and utilizing niche last minutes deal sites like Hotwire and HotelTonight.
- Leveraging CRM and Loyalty tools - Revenue Managers will need to take the lead in leveraging existing relationships with the loyal customer base to develop meaningful packages focusing on health and safety. Luxury operators will do well in providing end-to-end packages including safe transfers, private jets, and secluded accommodation packages.
- Focus on Content - It is surprising to see how many hotels on brand websites, OTAs, and metasearches do not have any information on health and safety measures (especially when they might be taking the necessary precautions). Revenue Managers need to step up and ensure all necessary content attributes are visible for their hotels across all the necessary channels. It will always help to work with a content partner who understands the need of the hour and impact on conversion for the right content.
In general, Revenue Management post-COIVD needs to play a larger role in the broader commercial strategy including asset management. The current scenario has added significant cost pressures and a good Revenue Manager will be able to step up and play a strategic role in these areas as they are analytical, objective and have the right experience and skill set in retail demand management, e-commerce, capacity utilization, segmentation yield/profitability, and general market trends.
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RateGain is a global provider of SaaS solutions for the hospitality and travel industry, offering travel and hospitality solutions that unlock new revenue every day. We are one of the largest aggregators of data points globally for the hospitality and travel industry (Source: Phocuswright Report). For more information, visit www.rategain.com.