Bridging the Industry

By , Director, Industry Consulting


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:

Digna Martinez Kolar
Director, Industry Consulting

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.

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