The hotel revenue management It is today one of the most important workhorses in the hospitality sector. Improving income and profitability often involves rethinking the strategies and technologies that are being used, as well as taking actions that can be in this line.
In this article we explain what it is, how it has changed in recent years and what techniques are used most frequently. We also introduce some technological trends that can help improve revenue management. Keep reading!
What is revenue management in hotels?
Revenue Management seeks to sell products to the right customer, always setting competitive prices and offering the maximum benefit.
The objective of hotel revenue management is that hotels can go one step beyond a model based on room reservations, capitalizing on new services and improving direct sales during guest stays. Knowing what value should be set for sales and forecasting demand and improving resource management is key to obtaining maximum profitability.
The high occupancy of a hotel is not always synonymous with profitability. In such a competitive environment, it is important to activate strategies that help increase direct sales while increasing average prices. To be really competitive
How has hotel revenue management changed?
The hotel sector has gone through a few years of important transformations marked, on the one hand, by the digitization of processes and, on the other, by the disruption generated by the Coronavirus crisis.
In this context, hotel revenue management and the figure of the revenue manager have become key and strategic piecess for the industry. Although this role has been evolving since the 90s, it is at this specific moment that it has taken on special relevance.
Some of the new papers that have had to be managed from the hotel revenue management include, among others:
- Management and development of technological services offered by a hotel.
- Administration of the digital presence of the business (social networks, digital marketing…).
- Identification of new business opportunities focused on improving direct sells.
It may interest you: Hotel profitability: keys to cost control in hotels
Some examples of revenue management strategies in hotels
1. Invest in improving knowledge of your market and segmenting your audiences and products
To successfully implement a revenue management strategy, it is imperative that you have a good understanding of your market, where demand is coming from, and the various local factors that can affect seasonal demand. You should also invest in technologies that help you understand your audience and their needs, wants, and expectations. Knowledge should help you segment those audiences and offer the best products for them.
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2. Segmentation and price optimization
By getting to know your audience better, you can improve your pricing strategy and your actions to increase sales. All of this, in turn, will help you minimize price changes. This, in turn, can help you build loyalty with customers who appreciate the consistent pricing you offer.
3. Improve information between departments
Integrating between management systems and investing in improving collaboration between departments, such as sales or marketing, will help you align your revenue management strategies and your individual departmental strategies with each other. Only then can challenges be addressed collectively.
4. Forecast strategies
One of the most important aspects of revenue management is forecasting, which allows you to anticipate future demand and revenue, allowing you to make any necessary adjustments. In the hospitality industry, high-quality forecasting depends on accurate records such as occupancy, room prices, and revenue.
Most forecasting strategies rely heavily on using historical data to spot trends. Having technological solutions that help you integrate and monitor data is the best way to improve your forecasts.
What are the trends in hotel revenue management in hotels?
Technological investment has led the main actions and innovations that hotels have focused on in recent years within the framework of revenue management.
Thus, digital is understood as a way to ensure the continuity and optimization of resources in the future.
Furthermore, according to a duet report, hotel revenue management software, 78% of hotel operators are going to increase their investment in technology in the next three years.
Following the same study, it has been found that the following are the technological areas in which hotels intend to invest more:
- Integrated systems (58.6%)
- Automation (54.8%)
- TRevPAR (36.7%)
- Digital guest journey (31.4%)
- Supplemental income (29%
Specifically, the following are some of the most important technologies in which it is possible to invest to optimize revenue management in hotels:
1. Incorporate revenue management software
Hotel revenue management systems are focused on enabling hotel revenue management holistically.
Thus, it unifies the information in this area on a single platform and allows data-based and predictive decision-making, as well as automating tasks.
2. Promotion of direct sales channels
Due to its simplicity and its low distribution costs, the achievement of direct sales is understood as a source of income to be promoted and therefore a key area in the hotel revenue management panorama that is to come.
Thus, it seeks to use technology that allows companies direct sales through their website or achieve improvements in the Loyalty of clients, among others.
Keep learning: Basic guide to improve direct sales in hotels
3. Integration and automation
At this point, and in relation to hotel revenue management, the aim is once again to eliminate inefficiencies.
On the one hand, the integration allows to annex all the technological systems that work in the ecosystem of a hotel (software, applications…). Only in this way is it guaranteed that they work cohesively and without generating friction.
Automation through digital systems also allows the human team to optimize their time, avoiding repetitive tasks and being able to spend their time and efforts on tasks of greater value.
4. Technological solutions focused on improving the customer experience
In recent years, the customer experience has become a cornerstone of revenue management strategies. Maintaining a close relationship with the client not only provides useful information to the hotelier, but also encourages spending and loyalty, which ends up becoming an increase in fixed income and greater recurrence in the long term.
Keep learning: Guest journey: technological trends focused on improving the guest experience
5. Strategies and technologies focused on personalization
The current context in hospitality and hotel revenue management involves understanding the importance of the client and meeting their needs in a personalized way.
To do this, hotels are relying on technological solutions that allow, on the one hand, segment customers and better understand their needs and, on the other hand, provide personalized treatment.
In this context, possibilities such as the personalized offers based on the specific tastes of the different customer profiles or the support of the loyalty processes also following these profiles.
6. Develop a holistic approach to revenue beyond the room reservation
The incorporation of technology is not enough to meet the changing needs of the hotel sector today: deeper changes at a strategic level are also essential.
Thus, companies are focusing on incorporating transformations that encompass the revenue system beyond room reservations.
It is about building a model that, through the appropriate technological applications, allows companies to understand customer needs in a personalized way and, in addition, comply with them in the most efficient way possible.
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En Cerium We deal with the design, implementation, management and maintenance of WiFi networks AND GPON specialized for the needs of the hotel sector.
With extensive experience in the hotel sector, we focus on offering useful solutions to the hospitality sector for digitization of services, The best of the communication, data management and processing and ciberseguridad.
Thus, we help companies to improve their hotel revenue management through the technological integration and the incorporation of new digital services
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