Rethinking your revenue management plan to reflect modern booking behaviours
As a result of ongoing travel unpredictability, revenue management is now regarded as a crucial element of business strategy for those in the hospitality industry. Data-driven systems are replacing historical data and booking pattern analysis to create accurate, real-time pricing strategies.
“Forecasting with the help of real-time analytics and diagnostics aid businesses in being agile with their marketing and operations based on the most current data and buying behaviour.”
Murtaza Rangwala, Owner and Principal Consultant at RevUplift
By rethinking your revenue management strategy, you can optimise revenue performance, making sure you never allow your inventory to undersell. Here are five tips to get you started.
1. Transition from manual to automated pricing
Implementing a data-driven revenue management system serves as a crucial aspect of your business’ ongoing success by continually evaluating and adjusting your rates multiple times a day to deliver the best possible price. Smart algorithms enable your business to easily adapt to environmental and seasonal changes, in reaction to guest demand.
2. Utilise tools that can react to continuous disruption
Following the global hospitality challenges faced in 2020, property managers must take a smarter approach, be more integrated and prepare for sudden landscape changes. A combination of restricted travel movements and an ongoing surge in last-minute bookings means it’s crucial that your revenue tech stack can react in real-time to booking pattern fluctuations. Being able to make granular pricing decisions per room, 24/7, over 365 days is key to driving RevPAR growth during high booking demand.
3. Refocus your forecasting
Traditionally, historical booking patterns were key forecasting data points. However, since the pandemic, this is proving less reliable due to factors such as localised travel restrictions, a rise in domestic travel and changes in booking behaviour. Forecasts, therefore, need to focus on real-time data supported by artificial intelligence (AI) rather than heavily relying on historical data.
4. Adopt a dynamic rate strategy
Although the pandemic has left many people extra price-sensitive, that doesn’t mean you need to lower your rates to achieve full occupancy. Instead, focus on implementing a smart revenue optimisation strategy that can intuitively adapt prices based on yield to maximise profit at every opportunity.
5. Make informed decisions with an integrated tech stack
Revenue management enables operators to forecast demand and refine rates based on current supply and demand. Integrating a revenue management platform, therefore, ingests your PMS data in high volume and frequency, allowing you to effectively forecast with the help of real-time analytics and data.
Our 2021 Trends and Challenges report covers revenue management in more detail, alongside the evolution of guest behaviour, shifts in marketing and the emergence of powerful tech in the hospitality industry. Download your free copy here.
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