I have recently noticed that revenue management is no longer a profession and a science, it is the new social conversation “talking about the weather” for people in the hospitality industry. Everybody has suggestions to offer on how we need to run the hotel, but nobody would speak up in meeting when opinions and ideas are asked.
You get your coffee in the canteen and the HR Director is talking about increasing rates because the hotel next door is selling higher – she knows it for a fact. (Yes, but it is a 5 star deluxe and we are not!) You have your lunch and the security guy is telling the porter that we definitely need to pay more attention to our promotions, we do not have enough, because the beautiful hotel down the road has at least ten and they are always full! (not really, they have tons of promotions because they are always empty and the rates are really low!)And again the restaurant manager thinks that our menus are too cheap, because we get very cheap clients who do not leave any tips for the staff, we need to increase the prices to get more reach people, who spent and leave tips like the restaurant around the corner. (yes, they are a 1 star Michelin!). The Financial controller wants to increase rates because we get more money. I have never paid too much attention, when I get my lunch or coffee, I usually take these few minutes to relax, but one day it really hit me…colleagues of any department are just talking about the weather, they do not know what to say and the subject in fashion right now is revenue management.
I would love to tell them that “Rome wasn’t built in a day” and that revenue management wasn’t either… not created last year and not even the year before, that there is more to that, than to be the most expensive hotel or restaurant to get more money or “better” clients!
Remko West from Xotels answered to three simple questions on very valid points, what is the past and the future of revenue management:
First question – past vs future/present […]”What are the most important developments & strategies that have led to where we are now with revenue management?”[…]
- The availability of information – analytic, benchmarking, reviews, no available 5-10 years ago
- Technological developments – less manual work load and definitely more accurate
- SoLoMo (Social-Local-Mobile) – more channels to launch promotions, to be visible in the market
- Maintaining a healthy channel mix
- Lowest Price Guarantees
- Metasearch – not yet very clear to many hotels
Second question […]”What are the top changes that you expect to happen in the next 3 to 5 years in hotel revenue management?”[…]
- Rate Parity will soon no longer exist. On contract – no legal issue? Only a marketing strategy? But the price war is not over
- Sharing economy
- Metasearch channels
- Availability of data
Third question […]”Will these changes be different for chain versus independent hotels?”[…]
Not really the answer that I expected and then I give you my opinion. My answer is yes, it will be very different for independent hotels.
- They will not have all information at their disposal, because they do not have the budget to implement their technology with all the latest software to improve data analysis.
- They do not have a dedicated person to manage social media at the right standard.
- They cannot compete with OTAs marketing strategies
- Metasearch is still a word for many of them
I will be happy to hear your thoughts to achieve better results and to play fairly and at the same time to make sure that we all understand the meaning and the importance that this new “fashion” can help us all to strategise for the future of our properties!