FOUR REVENUE MANAGEMENT OPPORTUNITIES FOR HOTEL OWNERS
Technology has become an influential player in the development and refinement of hotel business strategies. And while the practice of revenue management may sometimes find itself branded as “micro-level” from an owner’s perspective, it provides many opportunities to increase asset performance and value. Below are four opportunities that revenue management brings to the table for today’s hotel owners: GOING BEYOND THE GUESTROOM
Over the past few years, the practice of revenue management has evolved beyond simple and tactical approaches for managing guestrooms and pricing alone. As revenue management and its technology has continued this evolutionary blaze, the opportunity for a holistic revenue management approach has emerged from yesterday’s ashes. The effects of a robust revenue management culture are found permeating into different hotel departments, from marketing to sales to operational teams.
Today’s revenue managers are beginning to evaluate total revenue contributions. This includes the management and pricing of meeting and event spaces, group business and ancillary revenues. Revenue managers are also evaluating costs to help the hotel focus clearly on profits – not just revenue. While hotel owners don’t need to be heavily involved in these types of day-to-day operations, there is a huge opportunity for them to communicate overall hotel revenue goals to senior management. This kind of open communication can directly influence the strategic role of the revenue manager. Consider this scenario: The hotel in question is a new asset and the owner is interested in making a quick return on the investment – intent on selling the hotel after a couple of successful years.
Communicating this plan allows the hotel team to focus their strategy around achieving that objective.
THE OPERATIONAL OPPORTUNITY
Hotel owners have a huge operational opportunity to understand how accurate revenue management forecasts can not only positively influence their property’s profits but also help in the planning of staffing levels and inventory. Accurately anticipating demand allows the hotel to allocate staff across departments in response to low and high periods of demand. This helps optimize wage costs and increases guest satisfaction since departments are staffed to handle the flow of guest traffic. Detailed forecasts also help anticipate expected demand in restaurants and spas – so the levels of perishable inventory (such as fresh food) can be accurately ordered, with waste minimized.