'Revenue management' is the latest catchphrase in the hospitality industry. Simply put, it is the systematic procedure of boosting revenue by analyzing three aspects, namely: the customer's demand, hotel reservation plan and scheduling, as well as variable pricing. Such strategic micro-management and its timely implementation can increase hotel revenues by millions of dollars. Before diving deep, let's understand some essential concepts about how product prices are accurately aligned and made available to target the customer segments.
Hotel room is a perishable product inventory
Apparently, a hotel room is a consumable product, because the number of rooms in a hotel are limited. So, customer satisfaction and pricing become dynamic variables, as far as vending the inventory is concerned. This leads to a direct impact on the revenues; hence, it is critical to balance the demand and capacity by making price forecasts. Only then the effectiveness of a hotels' resource can be maximized.
Organized data analysis boosts business bottom lines
Several aspects are taken into consideration before applying revenue management software solutions in place. Careful analysis and evaluation of big data sets need to be made, pertaining to a hotel's property and associated business environments. The following are some basic areas which need to be considered by a hotelier:
<!--[if !supportLists]-->· <!--[endif]-->occupancy rates over the past
<!--[if !supportLists]-->· <!--[endif]-->general sales figures
<!--[if !supportLists]-->· <!--[endif]-->specific target groups
<!--[if !supportLists]-->· <!--[endif]-->prospective customer segments
<!--[if !supportLists]-->· <!--[endif]-->data on market share
<!--[if !supportLists]-->· <!--[endif]-->customer satisfaction
Considering external influences is equally important; these have been listed below.
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<!--[if !supportLists]-->· <!--[endif]-->basic holiday and event information
<!--[if !supportLists]-->· <!--[endif]-->hotels that have closed down recently
<!--[if !supportLists]-->· <!--[endif]-->price information about competitor
<!--[if !supportLists]-->· <!--[endif]-->other possible circumstances that might affect the business climate.
Believe it or not, in the mid to late 1900s, such truck-loads of data were painstakingly evaluated by humans! Hotels had to hire dedicated teams to do the job. Thanks to digitization, elaborate revenue associated information management software systems have been developed to cater to data analysis and facilitation.
However, there has been a fundamental change in the way hotel revenue management works, over the past few years, reason being demand patterns have undergone a massive transformation. These are highly dependent on user generated content online, in the form of feedbacks and reviews posted on online travel agencies and global distribution systems. In order to keep the hotel's repute untarnished, cloud-based reputation management systems have been put in place to assist a revenue management tool's function. Other linked tools include price analysis and rate intelligence systems. They are a whole different story altogether, which will be discussed in a subsequent article.
Thus, along with allied tools and application programming interfaces, innovative and superior revenue management systems are catering to the growing needs of the ever-growing hospitality industry. The ultimate goal is to render optimized products and prices to attain maximum increase in hotel revenues.
Source : articlesbase.com
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