Hotel operators have learned the secret to combatting dynamic market conditions: invest in tech that will have a direct impact on revenue management performance by predicting demand and implementing new pricing strategies.
Leading hotel operators have found the secret to combatting dynamic market conditions: investing in technology that can accurately predict demand while implementing pricing strategies that maximize revenue and fulfill probability objectives.
While revenue management solutions have been available for over twenty-five years, the category hasn’t enjoyed mass-market appeal, with less than 15% of the global hotel market using revenue management technology.
Many hotels, particularly independent hotels, rely solely upon property management systems (PMS) and central reservations systems (CRS) to set business rules, yet these tech platforms fail to leverage a growing number of data sources required to manage increasingly volatile demand in most hotel markets.
What type of technology and data analytics are then required for hotels looking to improve their revenue management performance? Here is a handy checklist to assist:
Market-wide Demand Forecast
Hotels usually select about 5 to 10 local competitors and ignore the remaining hotels in the market. This cluster of hotels is referred to as a comp-set (competitor set of hotels). In some cases, a hotel might have a one comp-set for conferences and another for groups depending on which nearby hotels have what facilities available. In both cases, the hotel is monitoring a subset of the hotel market, but missing out on valuable demand data for the overall destination. This is where market-wide demand forecasting analytics come into play, allowing for a full view of the surrounding micro and macro-markets.
Alternate Accommodation Demand
Airbnb is a leading supplier in the fast-growing alternate accommodation category, which includes short-stay apartments, villas and vacation rentals. Leading online travel sites are commingling hotel and vacation rental products within the same platform; making it easier for consumers to compare pricing and value of a hotel stay versus an alternate accommodation product. Market-wide hotel demand provides a more holistic view of prevailing demand. Having the appropriate technology to monitor this growing sector will put a hotel ahead of the competition.
Integrated Business Intelligence
One of the main benefits of implementing an automated revenue management solution is the amount of time saved by eliminating the manual process of data collection, data cleansing and price optimization calculations. By having detailed historical and forward-looking guest reservation data integrated with your revenue management system, hoteliers can analyze business performance and market segmentation trends more quickly, which leads to better strategies for success. Many hotel solutions are great at producing a report on a single piece of data. Yet the ability to drill-down into market segmentation data, or merge multiple pieces of data – such as the hotel forecast and price recommendations within a single integrated view – will provide greater insights and business decision support.
Mobile Business Support
Real-time analysis of hotel booking pace and pickup usually requires a revenue manager to be logged into their PMS or another desktop application. Today’s hotel consumer has the ability to compare multiple hotels and book from their mobile device. Hoteliers should have a revenue management system that is available on-the-go via a mobile device. This goes beyond a simple mobile reporting system; mobile revenue management should have the capability to see the latest hotel forecast and price recommendations, allowing for real-time decision making – anytime, anywhere.
With an increasingly volatile and saturated market, savvy hoteliers can get ahead of the curve by capitalizing on advanced technology that instantly processes the most relevant industry data and liberates hoteliers to make key revenue decisions in tandem with rapidly fluctuating market conditions. In short, it’s time to consider the bigger picture.
This content is created collaboratively in partnership with our sponsor LodgIQ
Tags: hotel, revenue management