Revenue Strategy for Resorts and All-Inclusives: Exploring the Challenges and Opportunities

Wouldn’t it be nice if effective revenue management for resorts and all-inclusive properties were as relaxing as the guest experiences they offer? While commercial success at these complex properties will likely never be akin to sipping mojitos poolside (one can dream, though), today’s advanced revenue management technology can simplify and streamline the elements needed to make it happen.

Key Challenges for Resort Revenue Management

Before getting into the weeds of how this is accomplished, it can help to first take a step back, survey the landscape and better understand the unique challenges and opportunities resorts face on the path to optimal revenue results.

Resorts have mastered pulling off the complex while making it look easy—and that can apply to revenue management as well. Here are some of the complicating factors that set resort revenue management apart from urban hotels and require a tailored approach to overcome.

• Seasonality: Resorts primarily serve leisure travelers, making demand highly seasonal and often dependent on weather, accessibility and special events.
• Rigid pricing models: Simplified rate structures often miss opportunities to leverage the benefits of dynamic demand-based pricing.
• Diverse revenue streams: Significant income is generated from food and beverage (F&B), spa services, activities, and retail, in addition to room revenue.
• Dependence on wholesalers: A substantial portion of bookings come through wholesalers and tour operators, with contract terms negotiated far in advance.
• Longer lead times: Booking windows are typically much longer, with some group and wedding bookings secured years ahead. This makes filling last-minute vacant rooms difficult.
• Diverse competition: Varying pricing models and offerings among resorts make it difficult to benchmark pricing and performance.

Where There’s Often Room for Growth in Resort Revenue Strategy

Despite the challenges, many resorts also have distinct opportunities to capitalize upon as they seek to enhance revenue performance:

• Improved forecasting: Access to more granular data and advanced tools enables resorts to create detailed, accurate forecasts that guide smarter commercial and operational strategies.
• Targeted marketing: Analyzing the cost of acquisition as well as booking and spending patterns by market segment and source market can help identify and attract the most profitable business mix.
• Dynamic pricing distribution: Advances in technology empower resorts to move beyond static contracts with wholesalers and adopt more flexible pricing models.
• Maximizing on-property spend: Guests are often willing to include meal plans and activities in their room bookings, as well as pay for premium services and amenities.
• Precise discounting:Innovations in demand analytics and pricing practices mean that hotels can reduce unnecessary discounting and free upgrades by flexing their discounts and offerings—for example, instead of a flat 10% discount for loyalty club members, the percentage can be a range that flexes based upon demand.
• Total revenue optimization: Applying revenue management principles across all revenue streams, not just rooms, can significantly boost overall profitability.
• Intelligent automation: Advanced RMS tools automate forecasting, pricing, and availability controls, allowing revenue teams to focus on strategy and innovation.

As resort operators look ahead and question which levers to pull to maintain sustainable growth, for many there’s clear value to be found by looking inward and assessing if there are technical barriers limiting their potential.

Advancements in data connectivity and revenue management technology have unlocked new avenues for many resorts and all-inclusive properties to take a smarter, more holistic approach to their revenue strategies. The question is: Do you have the pieces in place to make it happen?

How to Get Started Building a Better Approach to Resort Revenue Management

Resort operations require a nuanced approach to revenue management, blending foundational practices with innovative techniques. IDeaS latest free Lessons in Revenue guide, “Revenue Optimization for Resorts and All-Inclusives: Innovative Strategies for Maximizing Revenue” provides a deep dive into how forecasting, pricing strategy, availability controls, segmentation, distribution, and more converge with technology for exceptional results.

Unlocking the full revenue potential of resorts requires embracing innovation, data-driven insights, and strategic adaptability. Use the tips and tools shared to transform challenges into opportunities and take your resort’s revenue strategy to the next level.

Free Ebook: Revenue Optimization for Resorts & All-Inclusives