A significant part of getting the most out of a hotel revenue management strategy involves keeping up with the very latest revenue management trends and then implementing associated strategies, while investing in relevant technology. In this article, you can learn all about the latest developments in this area, so that you can stay ahead of the game.
- Understanding the Basics of Revenue Management
- Keep Up to Date With the Latest Revenue Management Trends
- 6 Revenue Management Trends to Stay Ahead of the Game
- More Revenue Management Strategies
- More Revenue Management Tips
- Hotel Marketing Trends
- The Most Important Hotel Software Solutions
Understanding the Basics of Revenue Management
Before getting into some of the specific revenue management trends that you should be aware of, it is important to understand what revenue management actually is. Essentially, it is the practice of selling the best product, to the best person, at the best time, for the best price, using the best channel, in order to maximise financial results.
Check out the “Revenue Management; clearly explained!” article for a much more comprehensive explanation of revenue management, the history of revenue management, why it is so valuable, how it differs from the similar concept of yield management, and the main key performance indicators (KPIs) that are used to track performance.
Keep Up to Date With the Latest Revenue Management Trends
Revenue management is a vital discipline for those in the hotel industry who are hoping to maximise financial results. It is a process that uses data and other information to anticipate demand so that pricing, distribution and marketing can be optimised. However, it is crucial to keep up with the latest revenue management trends too.
After all, consumer behaviour is changing all the time, and new technology emerges and becomes more important. Moreover, the distribution landscape is constantly in development and new strategies are always being put to the test. By keeping up to date, you can get the most out of your business and stay ahead of your rivals.
6 Revenue Management Trends to Stay Ahead of the Game
In this section, you can find out much more about six of the main revenue management trends that you need to be aware of. As a revenue manager or business leader in the travel and tourism industry, understanding these trends and adopting the associated strategies can help to give you a competitive edge.
1. Total Revenue Management
Among the most significant revenue management trends to be aware of is the concept of total revenue management. Within hotels, revenue management is usually focused on pricing, distribution and marketing of hotel rooms. Yet, with total revenue management, the focus turns to generate as much money as possible from all revenue streams.
In truth, the concept of total revenue management is nothing new, but a combination of factors, including technological limitations and a lack of understanding within the industry, meant that the focus was often more narrow in the past. By adopting a total revenue management approach, however, hotels can greatly boost their results.
2. Hotel Technology
New and emerging technology is always going to be one of the most critical revenue management trends to keep pace with. At present, some of the biggest technology trends include the use of hotel management software, the rise of specialist revenue management software, as well as other tools, like upselling software.
Meanwhile, business intelligence software is increasingly being used to facilitate and support data-based business decision making. Of course, the very nature of hotel technology is that it constantly evolves, so it is absolutely essential to always remain aware of new developments and have a willingness to adopt new approaches.
3. Cross-Departmental Collaboration
Another key revenue management trend to be aware of is the heightened need for cross-departmental collaboration. This has always been a major part of effective revenue management, because different departments need to work together to share relevant data and ensure their strategies align with broader business objectives.
However, in light of the rise of total revenue management, collaboration has become even more critical. For instance, not only should a hotel be looking to upsell and cross-sell on a broad level, such as including restaurant bookings within sales, but each department should also upsell and cross-sell, such as selling larger meals or extras, like wine, dessert, etc. Revenue management forecasts can also assist housekeeping, restaurant and kitchen staff with planning.
4. Data, Data and More Data
Data is at the very heart of any good revenue management strategy and the array of data that is available to hotels is vast, including historical data, current trends, competition data, wider market data, online reviews, data that is in the books, and more. All of this requires careful use of data analytics to achieve the best outcomes.
Analysis of the data needs to be carried out in a structured way and the data needs to be interpreted, so that it can be used to inform decisions. From there, strategies can be adjusted, based on what data tells you about the present market situation, future demand and other needs, leading to better decisions and better business outcomes.
5. Forward-Looking Market Demand
Historically, revenue management has been hugely reliant on past data to anticipate future demand. However, one of the major revenue management trends you need to know about is the rise of forward-looking market demand data. Essentially, this refers to clear data regarding future levels of demand, typically from competitors.
Those involved with hotel management can access data that is on the books for rival hotels, as well as other forms of data that can be used to gain a much clearer sense of what demand is going to look like in the future. Using that information, it then becomes much easier to make firm plans for how to strategically respond.
6. Data Visualisation
To reach peak performance, it is essential that you continuously monitor and understand business performance. What are your main revenue streams? What is the revenue per distribution channel? What costs are associated with each distribution channel? What is the current, on the book’s performance per hotel, room type, segment, restaurant and bar?
With so much information to monitor, and with some of this information changing constantly, visualisation can be a crucial tool for understanding your entire business. It can assist with identifying important changes, noticing revenue management trends and giving yourself the best possible chance of reacting quickly to opportunities and risks.
As a bonus, visualisation can also help you to present information to different departments, making collaboration easier.
More Revenue Management Strategies
Aside from keeping up with the latest revenue management trends in a general sense, it is also crucial that you adopt the most up-to-date revenue management strategies. From segmentation and price optimisation, to embracing SEO and offering incentives for direct bookings, these strategies should be intended to maximise revenue and profit.
Check out “9 Revenue Management Strategies to Grow Your Hotel Business” to find a complete breakdown of some of the most important strategies to adopt in this area, along with explanations of how they can assist with growth.
More Revenue Management Tips
Along with these general and strategic revenue management trends, it can also be valuable for a revenue manager to have access to broader revenue management tips. For instance, has your business adopted a revenue management culture? Is your record keeping consistent? Are you using automation and are you focusing it in the right areas?
Read the “8 Revenue Management Tips for Hotels” article if you are interested in learning more about best practices for revenue management within hotels, and why those practices are so beneficial.
Hotel Marketing Trends
It is also important to stress that revenue management trends are not the only trends hotel business leaders need to be aware of. Keeping up with the latest hotel marketing trends is also essential and helps to maximise reach and reputation, while also ensuring that other hotels do not gain an advantage in terms of exposure.
Read “Hotel Marketing; The Latest Trends in the Hotel Industry” for information on customer experience marketing, artificial intelligence, influencer marketing, user-generated content and other hotel marketing trends.
The Most Important Hotel Software Solutions
Finally, alongside adopting the most up-to-date revenue management trends, it is essential to constantly keep in touch with useful hotel software solutions. Examples of these solutions include property management systems, revenue management systems, reputation management software and rate shopper software.
Take a look at “Hotel Software: The Most Important Software Solutions for Hotels” for a breakdown of the main software applications that can assist a hotel revenue manager, marketing manager, or general manager.
Keeping pace with emerging technology and adopting strategies based on the most up-to-date revenue management trends is a major part of optimising financial results and avoiding giving rivals a competitive advantage. The trends mentioned are among the most important now, but it is important to continually monitor developments as well.
Want to Learn More About Trends in Related Industries?
It is essential to be aware of all the upcoming trends in the hospitality & tourism-related industries. While some trends can affect multiple industries, some are specific to the industry. You can learn more about trends within different industries in the following articles.
- Hotel Trends: Discover The Latest Developments in The Hotel Industry!
- Hospitality Trends: The Latest Trends in The Hospitality Industry
- Travel Trends: 17 Opportunities for the Travel Industry
- Tourism Trends: The Latest Opportunities for The Tourism Industry