Maximize Revenue with a Strong Revenue Management Strategy
Competitiveness and oversupply force hotels to offer personalized guest experiences.
Many people believe that technology clashes with the human aspect of a hotel, however, that’s not necessarily true. Technology hasn’t come to “robotize” us, but rather help facilitate many processes and enhance the hotel guest experience. Of course, it’s true that hotels must find the right balance between hotel technology and the human touch and always keep their hotel’s business goals and guest requests in mind..
A hotel’s distribution is shared among OTAs, metasearch engines and hotel reservation centers, among others. The market is rapidly evolving, and if hotels want to stay competitive it’s vital for hoteliers to use technology for hotel room pricing, online reputation or profit margins on different channels.
Internal management tools need to be adapted to the user and to market needs. In most cases, the revenue manager will be responsible for using the solution to meet objectives and increase profits.
Often, in trying to achieve these objectives, revenue managers may face the following challenges:
Pricing complexity. Increased hotel price transparency encourages the proliferation of rate comparisons in real time. The client is, thus, permanently informed and your competitors have information about your product’s price, product type and availability. Price is the main focus point so there is often little room for price flexibility, especially if travelers are sensitive to pricing.
Declining brand loyalty. The hotel distribution landscape has become highly complex, especially with the emergence of new channels and brands in different market segments. New players in the game such as Airbnb make it difficult for hotels to build loyalty with guests, especially in an ever-changing market. Travelers seek more personalized services and special offers. Guest segments like millennials seek instant gratification and have no problem changing their brand loyalties if brand promises aren’t fulfilled, making it difficult for businesses to generate brand prescribers.
Disparate data systems. Even though we live in a time characterized by technological progress, many hotels don’t keep their guest data in the same system. It’s important for hotels to target each touchpoint with their guests. The more information hotels know about their guests, the better hoteliers will be at making more strategic decisions.
Investment priorities. Decisions made at a hotel on a day-to-day basis must align with short and long term actions. Any changes made, no matter how small, can directly impact the traveler. Whether these changes involve responding to online guest reviews found on Tripadvisor or implementing new hotel technology to make hotel management easier, it’s important to evaluate the impact potential changes can have and always keep your hotel’s business goals in mind.
The challenge- generating value and revenue simultaneously.
CMOs and revenue managers alike can use the following tactics to help them meet these challenges and maximize hotel revenue by delivering valuable customer experiences:
Automate data collection. By automating data collection, hotels can further analyze information and enhance decision-making. Alert systems or pop-up screens are very useful for improving staff interactions with guests at every touch point and collecting valuable traveler information. For example, based on previous transaction history, a room service employee might recommend Thai soup to a guest when ordering. Companies may also consider designing systems that alert employees during guest interactions, with specific recommendations to help add value.
Offer incentives to loyal members. Hotels can offer value-added services to members of hotel loyalty programs to increase brand loyalty and direct bookings. For example, a hotel can offer a room upgrade to loyalty club members when they book directly on a hotel’s website.
Strengthen IT in hotel management. In certain market segments technology can add great value to the guest experience. Leading hotel chains have already implemented hotel technology to help facilitate many hotel operations and attract and retain hotel guests. Technology allows hotels to deliver what segments like millennials want and helps hotels make a competitive difference.
Collaboration between departments such as marketing and revenue management helps enhance guest experience. The more knowledge hoteliers gather about their guests and market, the better equipped they’ll be at offering personalized experiences that can help build brand loyalty and increase hotel profitability.