We’re out of the rut. Now what?
— 11 experts shared their view
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?
Principal Travel & Hospitality, ZS
Sherri Kimes and I said back in December in Dubai that revenue management was in a rut, doing a lot of talks, but not taking a lot of action. The pandemic has forced action. Due to the necessity of surviving the pandemic and doing more with less, many non-value-add activities have been eliminated. There is increased communication with owners and asset managers, closer collaboration among departments, and creative thinking around driving revenue from the entire asset. If these activities become habits, revenue management could emerge from this pandemic with new momentum.
On the other hand, many revenue leaders are concerned that with the short-term, tactical focus required to survive the current uncertainty, they are not able to pay attention to longer-term, more strategic activities. Investment in revenue management systems has continued, and interest in automation has increased. While the pandemic was the perfect example of why a human/machine pairing is necessary, if revenue management fails to demonstrate continued strategic value, it will be easy for companies to reduce their investment in people in favor of more automation. Revenue management must continue to push their strategic value to the organization, moving beyond being tactical rate managers into being strategic revenue drivers, or risk becoming obsolete in the “new normal”.