The Future of Revenue Management
Let's see how revenue can be managed with the help of modern technology and how big chains are using it today
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In the hotel and hospitality industry, it is believed that the ideal revenue management is to sell the right room to the right client at the right moment at the right price on the right distribution channel with the best commission efficiency.
Before the internet came , room prices and forecasts were done through sheer managerial and ownership experience. With the internet and the power to crunch large data sets, revenue management has become a whole different ball game today.
Today, every bit of data about your room occupancy a couple of years ago can be scrutinized against the specific date and season to determine why you sold your room at that price. And compare it with today's trend and determine the actual cost of the room you should be selling at.
Big hotel chains like Marriot were the first ones to understand value and implement the concept of revenue management decades ago. Today, especially in Asia, the developing economies are at a cusp of a technological revolution.
Where cutting edge tech startups and companies in the hospitality industry have tremendous cloud computing power and have built world beating revenue management systems.
These systems don't just crunch numbers and generate reports, but they are built on technologies such as AI and Machine Learning to give you, the hotel owner the best possible set of data analysis, to help you make the right decisions.
Democracy of the Internet and the Power of Consumer Reviews
In the current era of the internet and powerful smartphones in every consumer's hands, achieving higher revenue year-on-year has become challenging. One bad review about a particular service in your room can spread like wildfire on the social networks, and it becomes incredibly difficult to earn the reputation back.
What this means is that hotel revenue management cannot be just tied to achieving optimal room pricing, revenue management should encompass every digital touch point your consumer experiences from exploring prices online till they check into a hotel room and write reviews about it post check-out.
The Need for Better Demand Forecasting
With cheap air tickets (domestic and international), travelling is more accessible to millennials and the Generation Xers. This means there's more demand for hotel accommodation and innovation in this field. That's why we will see innovative ideas like Couchsurfing and Airbnb come along and disrupt the hospitality industry. However, for hotels, more demand should automatically lead to better forecasts and better pricing. Today's revenue management applications are adept at not only reviewing your hotels past sales, but also analyze competition to set dynamic pricing for your rooms.
The Future Dissects New Data Categories
Today we already have the technology to help hotel owners carefully analyze in-house data such as past occupancy rates, general sales, customer segmentation, market share information, and customer satisfaction to name a few. However, external influences such as past weather conditions, holiday seasons, nearby competitors and their prices to name a few are also being analyzed for better price determination.
The more data we get to analyze, the closer we get to see a clearer picture. Though the future of revenue management is driven by affordable technologies made available to small, medium, and large hotel chains alike, but, at the end of the day, it is up to the manager to interpret the crunched data reports and make the right decisions to influence the revenue bottom line positively.