Consulting Services answers recent client questions about hotel revenue management and moving past rooms
Digna Martinez Kolar, IDeaS director, industry consulting, talks about moving revenue management into function space and the basics of revenue management for all organizations.
- After quite a few years, we continue to hear function space (FS) mentioned as the next non-room area where revenue management (RM) would be applied. Where is the best place to start to get more money from our FS business?
To begin focusing on function space, there are some basics to be addressed first. Most FS teams are amazing at delivering the service; however, they often have limited exposure to the application of RM. With today’s revenue managers overwhelmed with the current RM rooms challenges, it can be difficult for them to take the lead. One basic step is “revenue management education for the function space team,” keeping it fairly simple so the FS team isn’t overwhelmed right off the bat. Learning the basics should be enough to get them started on strategically leveraging their event space. Another consideration is that evaluating FS performance can seem difficult navigating around with its limited metrics. But to quote P. Peter Drucker, “If you can’t measure it, you can’t improve it.” Measuring your FS performance requires having access to data that you can analyze, identify trends and measure performance. Once you understand where your hotel is in terms of FS performance, you can then determine clear objectives and strategies to improve your function space revenues. - What are the basics of revenue management?
Despite conversations around the evolution of hotel revenue management over the years, most of the basics of application still stay the same. We still apply the same fundamentals when talking about revenue management, or how to “sell the right price to the right customer through the right channel at the right time.” However, finding the “right” in each of those equations is the key, so we use the following ongoing process for revenue management:
1. Collect accurate and detailed data
2. Analyze the data to identify trends and opportunities
3. Prepare a forecast to predict as best as we can what is coming so that we
4. Optimize the demand and
5. Set up the right pricing and inventory strategies that help us maximize revenues and profits; finally, we
6. Measure performance so we can continue improving
This continued revenue management process can be followed by function space, restaurants, spa, and other revenue-generating departments.
Hey, don’t leave now—the fun is just beginning. Here are more industry insights making the rounds this week:
- Learning from the Giants: how Booking and Expedia build their traffic online Ever wonder how the big entities keep getting bigger & bigger? Our friends at Bookassist explore the behaviors and operations of big-time OTAs that just might inspire reflection into your own business strategy.
- Hotels Hamper Their Own Direct Online Business And speaking of Bookassist, we’re going way back to this article from Dr. Des O’Mahony, their CEO and founder, that shows just how difficult it can be for hotels to improve their direct bookings.
- Cyber experts have warned that the travel industry as a whole is particularly exposed to criminal activity Could it be true? Is our industry more susceptible to online criminals than we might realize? Sophie Cartwright at Guestline pulls back the curtains to investigate what the industry can do to better protect ourselves from costly cyber threats.
- The Future of Luxury Travel Searching for the latest & greatest on luxury travel trends? There’s a reason why we kept this one for last. Stop what you’re doing & download Sabre’s report about the five trends shaping luxury travel + hospitality. Trust us, it’s worth the read.
Before joining the IDeaS global team in 2011, Digna spent 11 years in leadership roles at InterContinental Hotels Group (IHG). With deep expertise in the deployment and structuring of pricing and revenue management processes, Digna helps clients build sustainable revenue management cultures in multicultural environments. Digna holds an MBA in Hospitality Management from IMHI, a joint program of Cornell University and ESSEC.
Latest posts by Digna Martinez Kolar (see all)
- Organizational Transformation with Help from Our Global Consulting Services - May 26, 2022
- Facing Hospitality & Travel’s Greatest Challenges, Together - December 16, 2021
- Back to Work – Hotel Change Management in the Era of COVID - July 22, 2020
