By the end of 2019, many of the thought leaders in revenue management had begun echoing a common theme, basically that the Revenue Management discipline was stuck in a rut. Industry-wide, Total Hotel Revenue Management was starting the become a joke. There was the longstanding complaint about the OTAs, but little being done about it. And the more recent debate about whether AI was on track to replace the Revenue Manager, despite only 15% of all hotels globally even having a revenue management system. Some openly warned that without evolving, the discipline risked losing relevance, and the influence and opportunities that go along it.

Then COVID-19 came out of nowhere to occupy the top of everyone's mind… overnight. Short term crisis management became the only job requirement. But these concerns did not go away, and if anything, the opportunity (and responsibility) that organizations possess to challenge every existing norm as they rebuild has only shortened the timeline.

The question to the Revenue Management community is: As we move out of the crisis management phase and towards the "next normal", how have your organization and responsibilities changed? What tools, technology, and processes have earned a permanent place in your routine going forward?

Klaus  Kohlmayr
Klaus Kohlmayr
Chief Evangelist and Development Officer, IDeaS

When this question was previously asked in February 2020 (which now seems like a decade ago), the majority of respondents disagreed that revenue management is stuck in a rut. Respondents agreed that progress had been slower than anticipated, however, there was progress, nevertheless.

With the hospitality industry coming to an emergency stop throughout Q2, hotels around the world are now shifting back into 1st or 2nd gear and preparing for a long multi-year path to recovery.

What do Hotels need as they start from zero, in a market environment that is highly unpredictable and with fewer people having to do more?

1. Clean and reliable data from multiple sources to guide decision making for recovery. An RMS (especially decision-making systems) needs accurate and reliable data from a myriad of sources, often representing the best version of the truth. To obtain this truth, RMS providers are spending a huge amount of time and effort to ensure the data received from the various systems is accurate and timely in order to allow the systems to make the right decision. To do so, we must continually add new data sources to our feeds.

2. Capabilities to use this data for fast and iterative operational, total revenue forecasting and planning, with the ability to provide forecast visibility to a wider audience than before.

3. Dynamic and accurate pricing to deal with shortened lead times and changed market segmentation. Together with the need for rapid forecasting, the brisk changes in demand require accurate and automated pricing to be able to optimize a hotel's revenues (even if they are currently or often limited to 20 or 40 percent.)

4. Rapid forecasting is now a must. Automation to relieve overworked revenue leaders of manual processes, so they can focus on strategic decisions. Obviously, forecasting has become more dynamic, forcing companies to perform rolling 30-day or 60-day forecasts because the future beyond that is so unclear. Over the next 18 months, the industry will be in a state of rapid, iterative forecasting.

5. Insights into areas of opportunity for commercial leaders to take full advantage of the many stages of recovery and optimize business performance even in the current difficult market environment. You must have the right data in the right place, as well as the right business intelligence and revenue management tool to organize and interpret this data. These tools can help you understand your cost of distribution, cost by channel, sensitivity by channel, and more—much better than an Excel spreadsheet can.

If your revenue management capabilities do not encompass these critical areas, you and your hotel will risk being in a world of hurt over the coming months.

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