With the advances in revenue management technology, analytics tools and forecasting capabilities, there has never been a better time for limited service hotels to optimize their revenue management potential. After all, what hotelier doesn’t want to maximize profits, streamline processes and strengthen their internal teams?
A centralized system can offer all that (and more!) for many limited service hotels. Here are three questions to consider when you explore implementing a centralized revenue management system:
1. What’s the best structure for a centralized team?
Onsite revenue managers and analysts tend to be cost-prohibitive in the limited service sector. A well-designed centralized team is one of the best approaches limited service hotels can adopt to cut costs and boost their bottom line. For those with a high degree of standardization across the portfolio, a centralized team is an investment that will pay dividends in many ways.
A two-tiered centralized team structure is most common for limited service budget hotels. That means the team consists of both junior and senior revenue management analysts. Junior members will be able to work with software systems and handle multiple hotels to determine daily availability and rate. Senior members focus on big picture pricing and budget objectives, as well as interdepartmental concerns. Keep in mind some brands assign troublesome properties to the most experienced analysts. Others focus on a regional structure. Find what works best for your hotel to succeed.
2. What are the reporting capabilities of the centralized team?
Reporting is a key component of any successful centralized revenue management structure but say goodbye to cumbersome spreadsheets — today’s commercial reporting expectations demand sophisticated analysis that’s captured and translated in a clear, concise way. The centralized team should be able to provide advanced visual analysis that illustrates key trends that provide a strategic advantage.
Be sure to thoroughly understand reporting capabilities and convey what you’ll need from your centralized team. For example, executives may need daily performance reports in a dashboard format while finance leads will require more granular reports that can be customized by region. A great centralized team will be able to supply the organization and its many stakeholders with an impressive reporting suite to meet all of their needs.
3. How does the centralized team determine price?
The majority of bookings for limited service hotels occur online through the brand’s website or reservation system. That means robust forecasting and price optimization are crucial. Because of the adoption of BAR and the high competition for transient guests, demand forecasts from the centralized team can provide a big advantage.
Free from the constraints of manually managing corporate discounts, last room availability requests and group contracts, independent centralized revenue management teams that use advanced analytics provide significant returns. Having access to historical data and 24/7 reporting allows the team to optimize pricing every month and outrank their competitors. Furthermore, utilizing cross-selling strategies ensures that revenue is never lost to the competition.
The straightforward business model of the limited service hotel sector makes it prime for centralization. However, every hotel must thoughtfully research to find the right solution – these three questions are a great place to start.