Why an agile revenue management strategy is important in today’s ever-evolving market
Guest post by Murtaza Rangwala from Pace Revenue.
In the accommodation industry, as in any business, results are what matter most. These metrics of success are extracted from hard evidence using data-driven analytics. Industry experts have provided so much insight and knowledge into data-driven decisions that it is often difficult to sieve through the noise and have the confidence to manage the risk of change. Not doing anything is probably the biggest challenge to any vendor seeking to improve results in a notoriously change-averse industry.
Properties that are best placed in today’s volatile environment are those who have chosen to innovate and nurtured the mindset to quickly adapt when they need to.
With demand patterns disrupted, there is a compelling need to adapt effectively and efficiently to not only survive but also sustain competitive advantage. The behaviours, systems, processes, strategies and benchmarks of yesterday are no longer a reliable blueprint to follow.
A nimble revenue strategy requires a tech stack that allows you to pivot quickly to generate pricing recommendations and demand forecasts in near real-time.
Changes in restrictions cause short lead shifts in booking patterns which, if not managed well, lead to loss of revenue. Until we see a wider lifting of international restrictions, it is possible to capitalise on your limited inventory within the narrower demand horizon.
How do you cope and stay relevant in these circumstances? Here are seven practical steps that every accommodation provider can take right now:
1. Review your tools and skills to make pricing decisions and forecast demand
The resource-heavy approach to pricing and analytics is redundant; embrace the best tech solutions by optimally pricing your individual beds, caravan sites, hotel rooms, apartments or cabins. Every property can do this regardless of location and even without historical data.
2. Respond quickly and accurately to booking pattern shifts with real-time pricing, forecasting and analytics
Ensure your PMS partner is cloud-native with an open API; this will allow you to integrate quickly with any solution that thrives on a high frequency and high volume of real-time transactional data.
3. Unlock your business intelligence for real-time visibility over shifts in market behaviour and booking patterns
Trigger targeted marketing spend to influence and drive demand. Review promotional pricing that erodes your profitability and integrity. Understand the total customer value by harnessing the data in your data warehouse, PMS or third party extranets and execute customised offers by POS.
4. Don’t market yourself based on competitor pricing
Use market intelligence to enhance your brand reputation and positioning rather than a superficial range of market pricing. Review your “competitive set” and look at your OTA and other digital analytics tools to get a deeper insight into the locations and properties being searched and booked. Extract and analyse the booking data within your PMS and strive to differentiate your offerings with value-based pricing and memorable guest experiences. The most relevant information is sitting in your own systems, so harness that with the right solutions.
5. Nurture talent
Train and upskill your team, including owners and asset managers. As technology rapidly evolves, the propensity to learn will be a key requirement in hiring and retaining talent rather than experience. You no longer need specialised system-specific skills as modern-day solutions are designed for ease of use and simplicity without compromising on the best science.
6. Clean up
Review your virtual real estate, including your online presence, content, imagery and restrictions across all channels. Eliminate any bottleneck to conversion by reconsidering the traditional approach to inventory and pricing restrictions, making it easy for customers to find you and book. Review how you track your segments, business sources and PMS channels so you are making decisions of clean data. Standardise and define processes so that everyone involved in data management is trained and compliant.
7. Revise and update job descriptions and roles
Traditional silos are redundant in this era of automation. With real-time pricing automation, analytics, diagnostics and forward-looking business intelligence are at our fingertips on any device; the most important skill is in bringing together the team and communicating effectively. Doing more with less is an oft-repeated mantra which we need to act upon by questioning everything we do and how we do it.
When faced with an existential threat, we are often forced to confront the inevitable; that the old ways no longer work, manual processes and legacy technology are crippling our growth and many conventional industry concepts are now outdated. By taking a data-driven approach, properties can implement a more robust pricing strategy that effectively responds to these changes in booking patterns and consumer demand.
Murtaza serves the accommodation industry in unlocking revenue potential by championing an evidence-based approach with the zeal of an educator and consensus builder. When he isn't helping democratise the adoption of cutting-edge revenue management technology and innovation across every type of accommodation, he facilitates learning to empower people to reach their potential. He has excelled through the ranks in hospitality with over 30 years in operations, revenue management, process improvement, B2B sales and now charting his own path as an independent adviser giving back to the industry he loves.
We share a conviction that revenue management should be data-driven, not opinion-based. To achieve our mission, we have assembled an amazing team of data scientists, product experts, hard-core engineers and revenue managers.
Check out our previous guest blog on segmentation as part of our revenue management monthly column.