Revenue management isn’t a new phrase, but the role it plays in hotels has changed considerably. In order to predict guest demand, optimise the booking process and ensure you fill your bedrooms profitably, you need to get as good as possible at revenue management.
Here’s six tips to get you started.
1. Make revenue management a culture in your hotel
We’re far beyond the days where revenue management was something that was only undertaken by the owner or (if you were lucky enough to have one) the revenue manager.
Now, it’s something everyone within your organisation should be aware of, and help influence. So, make discussions about rate strategies a regular fixture in your team meetings and ensure people know why it matters so much to the business.
2. Use – but don’t be governed by – the latest technology
If you have hospitality software that includes revenue management functionality (or which has an interface to software that does), make sure you’re up-to-speed with how it works. However, just make sure you’re not influenced too much by software that helps you create rates. This is still a task that is best left to the human brain, intuition and experience.
If you think a rate should be set at a certain price – sometimes it’s best to go with your gut.
3. Keep records – and refer to them
Data should sit at the heart of every modern revenue management strategy.
If you know how the hotel performed this time last year, you’ll have a far better grasp on where your rates should be today.
Peaks and troughs in past revenue data might hold the key to your future strategy, so make sure you keep relevant records and refer to PMS reports when devising your latest rates.
4. Try and encourage direct bookings
Online travel agencies (OTAs) play an important role, but by encouraging more direct bookings, you can increase guest loyalty and turn one-time bookings into something far more valuable for the future. A central reservation system can simplify this process and will make it easier for you to track where your bookings are coming from.
When working on your rate strategy, keep in mind rate parity rules, but think about how you can get more direct bookings by increasing the value of room rates when people book via your website. For instance, a freebie thrown into the room rate on your website might just encourage a direct booking and result in a healthy impact on your revenue and profit.
5. Keep in mind changing guest habits
The modern guest journey is complex and ever-changing, but it should also inform your revenue management strategy. Keep an eye on how your customer base changes over time and the methods by which they book rooms. Compare this with historical data (see tip 3) and you’ll start to identify trends that will inform the way you approach your rates and packages.
Think about yourself, too; how do you research hotels and book rooms as a guest?
6. Anticipate demand
A cornerstone of successful revenue management is the ability to anticipate and map demand across the calendar year. Historical data once again plays an important role here, but so too should the upcoming events and competitor activity in your area.
The same goes for your guest data. What do you know about your guests that might enable you to tempt them back at specific times of the year? Their birthday, past rate choices and booking history could help you encourage them to re-book and therefore inform your revenue management for the rest of the year.
Wrapping up
We’ve only brushed the surface in this blog when it comes to revenue management, so stay tuned for further advice in this area!
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CMS Hospitality holds over 30 years of experience in delivering hospitality software solutions. GuestCentrix offers the most complete solution in hotel property management software, whether you’re running a hotel, a resort or a hostel. Our highly experienced support and installations team holds a unique understanding of the hospitality industry and will aim to provide software that suits your property’s needs.
Call us today at (+61) 2 9440 9711, or email us at sales@cmshospitality.com. We will be happy to guide you to the GuestCentrix solution that’s right for you.