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In the highly competitive hospitality industry, it is critical to assemble as much information as possible to make educated decisions: enter revenue management. Using the basic principles of supply and demand economics, hoteliers can optimize revenue by strategically managing a property’s room inventory, pricing and distribution. Based on market trends and forecasts about consumer demand, revenue managers are able to maximize revenue during high-demand periods and stimulate demand during periods of lower activity. Put simply, hotel revenue management is selling the right room to the right customer at the right moment at the right price through the right channel.
Leveraging Every Metric
While revenue management relies on market data and past and current trends, data alone is not enough. A revenue manager must take into consideration many factors, such as changes in consumer behavior, the roles of various distribution channels, and the behavior of the competitive set. The revenue manager also needs to know how to use segmentation, create forecasts, and implement pricing models. Having an overall understanding of the property, the market, and where the property fits in the market allows a Revenue Manager to be proactive rather than reactive.
The Role of Technology
As a result of technological advances, revenue management strategies have evolved rapidly over the last decade. Consumer shopping channels have changed dramatically and influence the ways consumers conduct research and purchase travel. Technology also offers new insights into consumer behavior and sentiment. A revenue manager’s job now is to analyze all available data to determine the tactics that will yield the greatest revenue and optimize room inventory.
Evolution in Hotel Distribution Channels
Impact of Alternative Accommodations
Revenue is Everything
Merely reviewing reports at year-end and setting once-a-year revenue management benchmarks will position a hotel for failure. Revenue management, as a core skill and discipline, is vital to the success of any hotel property. A successful approach requires a comprehensive understanding of the market, incorporating the latest intuitive technology and predictive analytics customized for the property, as well as consumer sentiment insights generated from social media and online review sites. All of this information must be synthesized before revenue managers can forecast demand, develop dynamic pricing strategies, and successfully navigate the complex landscape of online distribution channels.
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Rainmaker is the hotel revenue and profit optimization cloud. The company partners with hotels, resorts and casinos to help them outperform their revenue and profit objectives. Rainmaker’s cloud-based solutions for transient and group pricing optimization, forecasting and revenue-centric business intelligence are designed to help hoteliers streamline operations, enhance revenue optimization processes, improve lead performance and drive guest bookings. Recognized as one of the top privately held companies in the United States, Rainmaker has been named to Inc. 5000’s ‘Fastest Growing Privately Held Companies’ for the last seven years and was named to the Atlanta Business Chronicle’s list of ‘100 Fastest Growing Companies in Atlanta’. Rainmaker serves hospitality customers throughout the world from its corporate headquarters in Alpharetta, Ga. and from offices in Las Vegas, Portland, Ore. and Singapore. To learn more about Rainmaker and its suite of hotel revenue and profit optimization solutions, please visit www.LetItRain.com, and follow Rainmaker on Facebook, LinkedIn and Twitter.