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The Rainmaker Group
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Winning the Numbers Game:
A Guide to Hotel Revenue Management
by Kristi White, Vice President, Deployment
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What is Hotel Revenue Management?
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.
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Winning the Numbers Game: A Guide to Hotel Revenue Management
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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.
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Kristi White, Vice President, DeploymentThe 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.

Business Intelligence (BI)
BI is the process of collecting as much data as possible to create decision points that transform disparate data into actionable intelligence. BI is not a new concept, but the sheer volume of data, its reliability, and its real-time nature is new. Big data, high-powered analytics capabilities, inspired data visualization, and fast-and-secure connectivity to the cloud have made it possible to delve deeply into large datasets to mine for essential nuggets of insight in just a few keystrokes. By analyzing this information, revenue managers can respond to consumer demand and market trends faster and more effectively than ever before.

Rapid Evolution in Hotel Distribution Channels
While a property’s own website remains its most profitable distribution channel, new channels consumers can use are being introduced with frightening speed. Monitoring and leveraging online travel agencies (OTAs) such as Expedia and Booking.com, is vital. These companies offer user-friendly, readily accessible online platforms consumers can use to book room stays. OTAs also make it easier for consumers to price-shop, amenity-shop, and any other kind of ‘x-shop’ imagined. They are also masters of online marketing, with penetrating marketing budgets. In addition to providing great value to travelers, OTAs offer additional exposure for properties, enabling customers to find those that they may not have heard of otherwise.

The Impact of Alternative Accommodations
Airbnb and VRBO.com have changed the mindset of many travelers in terms of types of accommodations possible. These platforms are making revenue management more complex. For example, “share” properties are relieving some of the pressure in high-demand periods, potentially affecting the prices that are charged in specific markets during compression dates. In order to compete, properties must focus on value. Complimentary meals, free Wi-Fi, room upgrades, mobile check-in, and personalized service are some of the ways hotels add value to a stay that Alternative Accommodations cannot. A strong revenue management strategy, focused on all of the ways consumers can transact, is essential for properties to succeed in today’s rapidly evolving online marketplace.
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Winning the Numbers Game: A Guide to Hotel Revenue Management
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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.

Coming Soon
In upcoming weeks, we will delve deeper into the four topics of segmentation, forecasting, pricing, and distribution for traditional hotels seeking to take their revenue management to the next level.

Want to learn more now? Download the Full Rainmaker Guide to Revenue Management:
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Want to learn more now? Download the Full Rainmaker Guide to Revenue Management
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About Rainmaker
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.

Contact:
Melissa Andrews
Vice President Business Development
The Rainmaker Group
407-342-7829

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Publishing Dates: 09/26/17 – 11/26/17
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