Last week’s revenue management webinar, “Growing Your Capabilities as the Industry Grows,” with Paul Van Meerendonk, senior manager of IDeaS Consulting Services, focused heavily around the evolution of hotel revenue management throughout its history – and where our industry is headed into the future.
The theme of innovation quickly rose to the top of Paul’s session, with a quick comparison of the effects that technology has had on the watch industry and its similar effects within hotel revenue management. The evolution of the watch over the past century has brought significant advancements in the ways that a watch displays information (and the type of information it displays), its functional capabilities and even how it is marketed. Today’s leading watch companies are vying to hold the crown in the arena of innovation, bringing the crème de la crème of their very best products to the market (welcome to the game, Apple Watch.)
The evolution of revenue management (and its systems and processes) over just the past several years is remarkably similar in how recent technology has affected the different types of data being integrated and displayed, a revenue system’s functional capabilities and utilization, and yes, even how marketing and revenue management has evolved.
This evolution has ushered us into an important era that is focused on big data and analytics, reputation pricing and maximizing total hotel revenue beyond hotel rooms. The application of analytics and big data brings the excitement of new possibilities, but it also forces critical evaluation of whether all of this data will provide accuracy and support for our work as revenue managers. Will using all of this data ultimately help us, or could some of it harm the goals we are aspiring to achieve?
The importance of transparency and customer value has also been steadily growing as one of the most powerful determinants in guest decision-making. Cornell University and ReviewPro also performed a study which showed a correlation between review scores and RevPAR; a one point lift in aggregated review scores equated out to a 1.4% increase in a hotel’s actual RevPAR. This further supports today’s requisite to integrate a hotel’s reputation scores into its pricing strategies.
Taking revenue management principles beyond hotel rooms into other areas of the hotel (such as meeting & event spaces) for total revenue performance has been recognized as one of the most indispensable areas of opportunity for today’s hoteliers. The importance of this holistic approach to revenue management was also recently discussed in a blog post from Sanjay Nagalia, and it plays a pivotal role in the industry’s future revenue strategies.
Any historian will tell you that it’s impossible to understand the present without studying the past. Moving into the future of revenue management requires careful evaluation of not only the current state of your organization, but what it has achieved throughout its strategic roadmap to total revenue performance.
As Paul asked his webinar attendees in the session’s poll: Which level has your organization currently achieved?
- Revenue Aspirations: Holding the desire to change
- Revenue Aware: Beginning the transformation
- Revenue Informed: Recognizing improvement
- Revenue Confident: Influencing the organization
- Revenue Innovate: Empowering the culture
Where are you headed in 2016? What about in 2017? Do you have a strategy in place to get there?
Evaluating your hotel’s current position will help you recognize your necessary remaining milestones on the way to your final destination – a sustainable and empowering revenue management culture.
Paul Van Meerendonk is the senior manager of Consulting Services at IDeaS Revenue Solutions. Holding over 15 years of experience in the hospitality industry, Paul has successfully led several high profile consulting projects, attends numerous industry events as a guest speaker and regularly conducts global webinars on revenue management and pricing topics. Paul is aimed at helping properties all over the world ensure property performance and return on investment through the interaction with – and audit of – hotel management.
Couldn’t break away to attend last week’s webinar? Don’t worry, we have you covered – check it out on our YouTube channel.