This week our colleagues Neville Isaac and Angie Flaquer attended the IHTF2019 Forum in Zagreb, and participated in a panel discussion about technology solutions for Revenue Management. It was a lively discussion, along with Joanna Schröder, VP of Revenue Management for Deutsche Hospitality, with some great questions and participation from the audience.
Below are some of the key points that came up in the discussion:
With the PMS market being so highly fragmented is there an opportunity for hotels to simply integrate via CRS systems?
One of the key challenges for hotels to benefit from proper RMS software is the need to provide their transactional data to the RMS provider. This is habitually done by integrating the hotel PMS with the vendor RMS and providing the reservations data on a daily basis (the frequency can be more depending on the type of hotel). Since the PMS market is highly fragmented and localized often the smaller PMS systems will not have an integration with the RMS and it can be costly and time consuming to develop this. One of the suggested ways around this is for smaller hotels to connect with an external CRS which already has connectivity to the major RMS solutions.
We also believe that, at some point in the future, we will be able to get rid of integrations, by creating more versatile solutions that unite all the functionality of the PMS, CM and RMS in one single software, served as an easy-to-use web service application, and putting the Revenue Management in the center of the Hotel Management software structures. (We are already seeing some convergence of PMS and CRS systems happening).
Why is no one offering solutions on Total Revenue Management such as Golf MICE,etc?
Most RMS primarily focus on optimizing rooms business, with some also offering different options for meeting space. However, there are many other revenue streams to be considered in hotels, and this is an area where some development is needed in order to cover these needs. Technically it would not be an issue for RMS suppliers to provide recommendations on strategy for these elements ( after all the concept is the same – it is perishable inventory), however for algorithms to work they need to be fed with data – and this needs to come from the hotels PMS, Sales and Catering software or any other management software they may use for spa bookings, golf tee times etc. There is a still a great deal of work to be done in this area to improve the quality and quantity of data available – and it would also require more integrations in order to work effectively.
Airlines vs. hotels revenue management why hospitality is moving slower?
Actually, We would dispute this statement. It used to be the case that airlines were way ahead in Revenue Management but this is no longer always true. We have to bear in mind that hotels operate in a very complex space, with a higher number of competitors in the market place, a more varied product offering (rooms, meeting rooms, F&B etc.), many market segments etc. Airlines have less complexity and this has led to a more centralized function for RM and more widespread use of technology. Hotels need to catch up in terms of the uptake of RM technology, but especially amongst hotel chains the level of sophistication is equal or more.
Is training on RM important to other areas?
Revenue Management is not a task of a single Revenue Manager or a particular department in the company, but a business philosophy. Every person within the company should be involved, and all business strategies should be aligned to the Revenue Management objectives and policies.
This helps to align goals and to better understand the decisions taken, which eventually has a positive impact on the bottom line. If the hotels do not have the resources to do this training in-house, there are technology suppliers who can help and support
Sales and RM departments. Separate areas or joined?
Historically RM often fell under the control of the sales department, however this is changing. The ideal situation is for these departments to be separate, and equal. Most important of all is that objectives are aligned to achieve the same goals – this does not need to be an adversarial relationship.
Here at Beonprice we believe that all hotels can improve their profitability with an RMS solution with decisions based on artificial intelligence. In order to do this it is important to create a Revenue Management culture at all levels of the organization, and free up the teams to concentrate on strategic decison making with an impact on the long-term health of the business. We provide the technology to do this, as well as the expertise, support and training necessary to be succesful.