The rise of the internet restructured the very foundation of hospitality, transforming the way businesses operate and catapulting independent properties to the global stage. Today, the World Wide Web has become a battlefield, devoid of any harmony that may have once existed between suppliers and distributors. Indeed, the relationship between OTAs and hotel owners has been growing increasingly fractious – especially over the last decade. Data released by the HAMA Study & Kalibri Labs has shown that commissions charged to hoteliers have been growing twice as fast as industry-wide revenue, and hoteliers are growing increasingly weary of parting with their profits.
It’s no surprise that revenue management strategies have become the primary weapons of choice as hotel owners look to hit back at the OTAs. However, hospitality is influenced by a variety of variables that are subject to sudden change – political developments, economic situations, global weather, inflation, disposable income and a number of other factors contribute to the behavior of guests today. This is further complicated by the gradual rise of millennials, a new generation of travelers whose expectations are radically different from their predecessors.
That’s why revenue management strategies need to be constantly updated and modified to account for changes in the industry.
Having said that, certain facets of the current strategy may be more resistant to dilution and can be carried over to the new design. With 2017 fast approaching, let’s take a look at some of the popular revenue management practices that continue to be effective:
Hotel website optimization
With internet bookings growing in popularity every year, there’s no question that this particular trend isn’t going to fade any time soon. Optimizing your hotel’s website for traffic as well as conversion is critical to letting your commission-free booking channels thrive. A number of hotels are investing in SEO, SEM, site design and reliable booking engines, while features like mobile-compatibility have become basic pre-requisites that nobody even mentions anymore.
Segmenting your hotel’s data is a great way to group relevant data, and enables you to better target your campaigns for specific sectors of the audience. Based on guest preferences saved in your property management system, you can personalize offers for their needs and improve conversions. Moreover, segmentation enables your revenue manager to observe trends and uncover patterns that can help further optimize your revenue management strategy.
Adoption of open pricing
BAR pricing had been the norm for a long time for hoteliers. However, hoteliers have gradually come to realize that locking rates for all booking platforms isn’t very profitable during the peak season, especially when discounts represented by a percentage tend to increase proportionally with higher room rates. Instead of missing out on that channel’s exposure altogether by delisting, open pricing enables hotels to continue to list their rooms on all channels, with independent rates.
While implementing a revenue management strategy, it’s important to exercise patience and not expect results in the first few weeks or even months – it can take up to a year for the benefits of a robust management strategy to become apparent. Remember that you’re not in this for short term pickings, but the long-term sustainability of a thriving hotel business!
"Popular revenue management practices your hotel needs to adopt by 2017",