In late 2010 Cornell’s Center of Hospitality Research released a study by Sheryl E. Kimes, Ph.D. titled “The Future of Hotel Revenue Management”. The report was on a survey of 500 Revenue Management practitioners along with online and in person interviews. For those of us that have been in the revenue management arena the results were not surprising with the following future trends being identified:
1. Revenue Management moving from tactical to a more strategic role.
2. Greater focus on total hotel revenue; moving beyond rooms.
3. Analytics and supporting technology will play a more important part of business decisions.
Here’s the thing; since the inception of revenue management in hotels from the functional areas of reservations and front office there has been discussion about how revenue management should evolve. There is never debate about the value of the function yet in general as an industry we continue to focus on the same things rather than doing what is necessary to elevate this part of our business to new heights.
Here is my challenge to you as Revenue Management professionals or Hospitality Leaders; make 2012 the year of realizing the potential of revenue management in your organization. Transforming for Revenue Management to Revenue Optimization across your business.
This will require some investment, both in time and resources; it will all deliver a good short and long term ROI. It all starts with having a game plan; the next several posts will deliver more detail on a plan to work from based on the following approach.
In order to achieve optimal revenues on an ongoing basis and move beyond the focus on rooms to other revenue streams there has to be a solid foundation in place. A solid foundation is made up of four components:
1. Talent: having the right people on your team is equally as important in the realm of revenue as it is in all other areas of the hotel. If you are a revenue management professional continuosly upgrade your knowledge and experience. If you are an owner or hotel manager relentlessly pursue the best; if you are unable to attract great talent in this time of low supply and high demand of great revenue people there are alternative approaches.
2. Strategy: determining your property’s or portfolio’s pricing, distribution and marketing strategies are essential to set a strong foundation. A strategic approach does not mean hours of pondering; rather using intelligence to develop a game plan to drive your business.
3. Tools: technology in the hospitality sector has improved dramatically over the last five years. Technology is now available to provide an integrated tool set that will support the business strategy.
4. Execution: the other three areas become meaningless without execution. Consistently and aggressively execute; failure to achieve goals occurs most often due to poor execution.
Make 2012 the year of building a foundation for Revenue Optimization across your business. In the next post we’ll talk skills of a great revenue professional.