It is no longer news that the hotel industry has suffered the worst decline in history. The resulting business failures are starting to make the news and most industry experts agree that it will be several years until the industry returns to anywhere near the health it had in 2019. While the global picture is still very gloomy, we are starting to see isolated upticks in reservations. However, whether it is traveler's slowly adjusting to the "new normal", or just pent up leisure demand, the booking patterns are different than ever before. And just like the periods following previous disruptions, the most aggressive and innovative hotels will gobble up all of this trickle of new travelers, leaving most hotels still staring at the horizon, looking for signs of life. Although there will be few winners and mostly losers during the early stages of the recovery, most hoteliers are still working with the exact same set of tools they had, pre-pandemic, including over half of the industry that uses no dedicated revenue optimization technology whatsoever.

So, we ask our panel experts: 1) For a hotel just getting started implementing a revenue optimization process, what technology and services are most essential, and how should they be selected? or 2) For a hotel with an established revenue optimization culture, what new tools have emerged that could be game-changers?

Max Starkov
Max Starkov
Hospitality & Online Travel Tech Consultant

Let's remind everyone what the primary goal of revenue management (RM) is: to ensure that the property sells the right product to the right customer at the right time for the right price on the right channel. Typically revenue management systems (RMS) and revenue managers use historical, comp set pricing and market data and combine this with forward-looking demand signals like pacing to recommend the optimum rates.

Now that historic data has become completely irrelevant, I believe comp set pricing data has also diminished in value - how sure are you that your competitors are smart in their revenue management (RM) practices and use the right RM tools and not just plagiarizing each other's rates in a suicidal downward spiral?

In the current environment, I believe the role of forward-looking demand and BI on future demand has been elevated to unprecedented importance. This is why I am excited by TripAdvisor's new Spotlight BI product, and especially its Market Spotlight feature, which allows hoteliers to anticipate future demand by utilizing the scale of Tripadvisor, combined with other important travel data such as flights, alternative accommodation, and others and maximize RevPAR by taking precise action based on expected demand for future stay dates.

Due to its colossal website traffic, TripAdvisor has mountains of intent data and is one of the very few digital entities out there that can not only predict but also generate travel demand.

For hotels new to RM practices, I recommend a) Implement a cloud RMS with strong forward-looking demand capabilities, typically priced on a per-room/per month (PRPM) basis and low or no upfront costs, b) Subscribe for a forward-looking demand BI like TripAdvisor's Spotlight BI, and c) Consider contracting with an RM consultancy to kickstart your RM practice.

For hotels with established RM practices, I recommend that a) Do not fire your revenue manager - now you need him/her more than ever; b) Evaluate your existing RMS and its forward-looking demand data feeds and capabilities, as well as any irrelevant pre-COVID business rules, and c) Review your revenue management BI subscriptions and give priority to the future demand BI one

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