Managing Revenue Amidst Global Travel Restrictions


As coronavirus concerns mount, hotels can count on automated revenue technology to help defend against unhealthy business conditions. 

Visit our COVID-19 hotel industry guidance hub for all the latest insights and information from IDeaS.

The world’s most populous country has severely restricted outbound travel, and the global hospitality industry has braced for impact. As the coronavirus nears pandemic proportions and Chinese tourism takes an indefinite hiatus, hotels across the APAC region have already reported falling demand. The effect on mainland China’s travel industry could be catastrophic, and neighboring countries are already forecasting significant losses in the near term 

Despite this grim outlook, we at IDeaS urge all our clients to maintain a level-headed, data-driven focus over their revenue management operation. Whether your business is threatened by a health crisis or natural disaster, political unrest or economic uncertainty, an advanced RMS and the support of our consulting experts will help you weather any storm. 

Keep Calm 

Do not implement anything you might regret later. Rather, take a long-term view of what is best for your business, not just for the next few months, but for the next several yearsThe overall trend for our industry is and will remain positive. 

When faced with a high volume of cancellations, for instance, hotels might be tempted to offer short-term discounts or rely on more expensive distribution channels to attract bookings from other markets. While this might seem like a good strategy for the short term, it can be a long road to recovery from these decisions. Discounting takes time to rectify once demand rebounds, as does giving too much business to costly third-party channels. 

This is no time to panic, but it is time to plan. As you deal with increased demand uncertainty, it is critical to start to map out and stress test best-to-worst case scenarios and the activities to deal and counter each. Activities should be multi-functional and cover varying whatif scenariosWhat if corporate demand drops by 10 percent? What if group bookings fail to materialize? What if weekend demand declines by 25 percent?  How can your marketing team redeploy and reassign planned campaign funds to generate and secure alternative business and new markets? You might never need your plan, but it’s always better to be prepared. 

Be ready with creative alternative revenues. Include in your plan activities to protect existing revenue sources, find alternative revenue sources and create new ones. If weekday demand declines significantly, what alternative revenues can make up some of the lost demand (e.g., locally sourced business, meetings & events, etc.)? How much revenue can you protect by locking in contracts for longer periods of time? Are your post booking pre/at arrival upsell activities optimized?  

Trust Your RMS 

With an automated RMS solution, hotels are better positioned to adapt and respond early to all possible outcomes and leverage their data to create a single source of truth. The best way to prepare for future uncertainty is by being certain about your own business strategies under any condition. 

During low demand periodsthe revenue opportunity lies in capturing all the available demand and maximizing any rate opportunity considering the season and the market. Some of the benefits an RMS solution offers during lower demand periods are:  

  • Automated pricing recommendations considering competitors to capitalize on market opportunities as recovery begins 
  • Whatif analysis to run A/B testing on potential pricing and promotions 
  • Forecast and visualization by market segment to enable more targeted activities 
  • Automated onward distribution of pricing  
  • Automated deployment of room-type overbooking strategy 
  • Manage-by-exception features (e.g., alerts and differential reporting to draw attention to opportunities that arise)
  • Continued time savings through the full suite of reports offering automated delivery to an extended audience of stakeholders within your business 
  • Business intelligence and insights regarding demand levels and business mix through reporting to support effective forecasting for operational departments to control resources and costs accordingly 

We wish to send our best wishes to our clients, friends, and team members affected by this unfortunate situationThe coronavirus outbreak presents a significant challenge, but with a little bravery, compassion, science, and advanced technology, we will persevere.  

Our best overall advice is to be prepared but don’t overreact. The magnitude and timeframe of this crisis is difficult to predict. Regardless, we are always here to help, and we encourage our clients to reach out to their client relationship manager with any questions or concerns. 

Stay strong. Stay calm. Stay smart. Stay healthy.  

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