It is becoming increasingly common for hotel owners and others in the hospitality industry to acquire revenue management consulting services, in order to optimise prices, distribution and occupancy rates, and maximise financial results. In many cases, these services will be acquired from a revenue management consulting firm and in this article, you will learn about the benefits of enlisting a revenue management consultant for your hotel.
What is a Consultant?
Put simply, a consultant is a third-party expert, who comes into a business offering a fresh pair of eyes and specialised assistance. Consultants will typically work to gain an understanding of how your organisation currently functions and then provide advice on steps you could take to improve performance or optimise results.
A revenue management consulting professional will typically come into a hotel and offer these same basic services. They may evaluate your inventory, your current pricing strategy, your chosen distribution channels and historic information about levels of customer demand, and then offer advice on how to maximise revenue.
What Are the Benefits of Hiring a Revenue Management Consulting Firm?
Below you find 3 advantages to acquire a revenue management consulting firm.
Benefit From Expertise
One of the biggest reasons why hotel owners enlist a revenue management consultant is the ability to benefit from their specific expertise. After all, a consultant will have in-depth knowledge of revenue management techniques, strategies and metrics, making them better equipped than one of your own employees.
Furthermore, if you turn to a revenue management consultant with previous experience in the hospitality industry, they will also have first-hand knowledge of which techniques are most appropriate within hotels. As a result, they can rely on first-hand experience to help you with your pricing strategy, or your distribution methods.
Gain Outside Perspective
Another major benefit of getting a revenue management consultant to help your business is the ability to obtain an impartial, outside perspective. This can be extremely valuable in many cases, because those working internally are sometimes too connected to problems or influenced by their own biases to see things objectively.
For example, a fresh pair of eyes may find it easier to spot issues with your room rates, or with your distribution strategy. They may also be able to bring in-depth knowledge to the table about what has worked for other hotels of a similar size, or in a similar location, helping your hotel to improve revenue generation and occupancy rates.
Reduce Staffing Costs
Lastly, a major plus point of outsourcing revenue management to a consultant is the ability to save money. While a consultant will charge a fee for the work they do with your business, this is likely to be substantially less than paying a full-time employee to do the same role, even just in terms of wages.
Once you add on other costs associated with an employee, such as benefits and investments in the technology they need, it can become significantly more cost-effective to outsource responsibility. In addition, a consultant will already have the relevant knowledge and your hotel will not be responsible for training them.
Which Services Does a Revenue Management Consulting Firm Offer?
A revenue management consulting firm can offer a range of different services, which can all help to optimise financial results. You will find more detail about some of these services below:
Strategies for Growth
One of the most common reasons why hotel owners turn towards revenue management consulting experts is to facilitate growth. In many cases, hotel management teams have clear objectives, but may require external expertise to actually come up with the strategies that deliver on these goals.
As an example, consultants may be able to help hotels with the implementation of new or innovative services, such as the use of smart hotel technology, or the adoption of a hotel app. It is often the case that external voices are able to think outside the box more easily, as they are not blinded by the way things are already done.
Another area where revenue management consulting firms can be invaluable is with regards to pre-opening or preparation services. Before a hotel is opened, or re-opened after an extended closure, there are a number of things that need to be taken care of, all of which can impact upon long-term financial results.
For instance, a revenue management consultant will be able to assist with budget creation and pre-opening marketing and positioning activities. Their expertise can be invaluable in ensuring your hotel meets all of the required standards, while they may also be able to assist with recruitment activities as well.
In order to maximise revenue and profit, hotels need to use the right strategies in relation to processes and operations. A crucial part of this, which a revenue management consulting firm will be able to assist with, is streamlining these operations, reducing the amount of wasted time and/or expense along the way.
For example, it might be that your hotel has some unnecessary stages within its booking or distribution processes, which are costing you more than they are generating. Consultants will be able to use their expertise to identify these areas and then help you to make more effective use of your resources.
Offering Short-Term Cover
At various points in time, it may be necessary to obtain short-term cover for roles that are crucial to the day-to-day running of your hotel. After all, when it comes to optimising revenue, achieving consistency and ensuring things continue to run smoothly is imperative, regardless of what else is happening in your hotel.
There are many situations where this may be necessary, such as in the early stages, when staff skills are still being developed, or at times when entire teams require training to understand new technology or operations. Fortunately, many revenue management consulting teams will be able to provide precisely the kind of cover you need.
Expertise and Support
Hotel owners can also seek more specialist support from revenue management consulting firms, which can allow for expert assistance to be obtained when it is most needed. The kind of support that can be provided is varied, but includes full-scale reviews of hotel strategy, as well as in-depth analysis of current financial performance.
One of the major advantages of enlisting the help of revenue management consulting experts is the fact that they can get straight on with the job, without needing to be trained up first. Unlike most hotels, a high-quality revenue management consulting firm will also have access to the latest techniques, technology and wider industry data.
Arguably the single biggest benefits of seeking assistance from a revenue management consulting firm is the ability to involve them within employee training and development efforts. Indeed, consultants are often able to provide specialised training, based on the latest insights, software applications and technology.
This can actually also be extremely valuable for teaching existing staff members some of the skills and techniques used by revenue management consultants, so that the in-house revenue management team is equipped for the role.
Finally, a revenue management consulting firm can also help with repositioning or re-branding strategies, helping hotel owners to change the way a property is marketed. This can be essential if a hotel changes ownership, moves from being independent to part of a chain, or vice versa.
A revenue management consultant can assist with this in a number of ways, such as by assessing various revenue streams, ensuring that marketing efforts highlight any new services that have been introduced, and by helping to design distribution and pricing strategies that are in-keeping with brand values and core objectives.