ID HOTELIER - Like many other areas in travel and hospitality, revenue management has dramatically changed in the last two years.
The second of our two-part blog series on revenue management looks beyond challenges towards trends emerging from dwindled demand, patchy recovery and flipping of established revenue management processes to forecast and inform pricing. We spoke to leading revenue managers on what they think lies ahead.
Shorter lead times
All experts we spoke to highlighted shorter booking windows as the strongest trend coming out of Covid.
“With most hoteliers still relying on domestic travellers, the prime booking window is 0-3 days for business properties, out of which same day booking is the strongest,” says Kamal Kishore from Redsky Hospitality. “Leisure properties have a 0-15 day booking period but news of Monkey Pox spreading has brought this down to 0-3 days.”
Rateping’s Jaydeep Advani adds that this shift means hoteliers now need to look more carefully into past data to see what their “same day pickup” is for different days of the week and be priced attractively on any day to optimize on the booking opportunities.
Both Jaydeep and Kamal talk up the pricing tools (Precium by Redsky Hospitality and Rateping’s Pricing Intelligence) to quickly and confidently inform optimum rates.
While impulse travel combined with continued lockdown uncertainties, may be driving shorter lead times, there are also revenge travellers and digital nomads who are changing travel. These guests look to travel to bucket-list destinations and stay longer (who knows when the next virus will hit?!). They may also book within shorter windows, but look to immerse themselves in the local culture through longer stays.
Online bookings leading recovery
Not surprisingly, the now more-than-ever digitally savvy guests are going online to finalise their travel. “What’s significantly different from 2018-19 is the reliance on brand,” says Kamal.
“Guest preference to book direct is being leverage by smart hoteliers who are investing in social media, Google Connect and other online platforms to drive up their commission-free bookings share.”
“Don’t rule out presence on OTAs,” suggests Jaydeep, “but make sure you keep up your profiles on other online media.”
Revnomix’ Shanta Kamath also talks about cost of distribution coming under greater scrutiny and driving a push by hoteliers to grow direct bookings.
New sources of data and data visualization
Look beyond conventional methods of forecasting in light of demand and booking window volatility advises Shanta.
“Revenue managers have had to up their ante on monitoring local trends and populace segments to get a better understanding of demand. Collection of data through websites that specialist in analyzing it is important,” she says.
Revenue managers also now need to go to airline bookings and similar other sources to get demand information – data sources are now more varied than ever before.
With numerous data points added to inform decision-making, data visualization through smarter technology and tools build on Artificial Learning and Machine Learning are gaining popularity with revenue managers.
Additional revenue streams
Leveraging all options to generate additional incomes will result in a holistic growth phase, rather than pressurising only rooms or food and beverage outlets to make up for lost time and money.
“This said, online food delivery and cloud kitchens have played an important role in sustaining some properties,” says Jaydeep.
Another way to increase guest spending is by up-selling and cross-selling, where you attempt to encourage upgrades and additional purchases – taking the total revenue management approach where you maximize the spend from guests already booked.
Leveraging technology to stay ahead
Dealing with severe staff shortages and a need to keep the cost per acquisition low in order to remain in business has driven up the need for supporting technology. Integrated cloud-based systems such as a connected channel manager and property management system are considered essential for automatic rates and availability updates, reducing the need for manual interventions.
With revenue managers also falling on the shortage list, revenue management tools such as Precium, RevSeed and Rateping Pricing Intelligence are more important than ever before.
Dynamic pricing
One of the rising innovations taking off in hotel revenue management is the growing sophistication of overbooking controls, which provides hotels control over excess bookings and cancellations to fly as close as possible to 100 percent occupancy consistently. The flexibility factor is now more in play than ever before as last-minute cancellation are common post Covid.
Connected to integrated smart technology as revenue management systems and channel manager, data collection and analysis – even on a daily basis becomes easier, leading to an effective dynamic pricing strategy.
Collaborative approach to revenue management
If you’re lost amidst volatile demand and ineffective conventional forecasting methods, don’t worry. Many revenue managers are in the same boat as the data they relied on has evolved post Covid.
“A collaborative approach and sharing of knowledge will definitely be helpful for everyone as they navigate through a bumpy recovery,” says Smritee Shah of Revmerito.
Conclusion
To be effective in your revenue management in the post-pandemic era, robust, adaptive methodologies must be implemented, with an awareness that historical demand patterns cannot predict what lies ahead. While this blog throw light on some emerging trends, they’re evolving even as we write this. What will keep you ahead of the curve is the right technology stack and partners. What you need to look for is a technology that is:
Smart in how it collects and analyses relevant data through multiple sources, including your channel manager, RMS and PMS.
Agile enough to allow you to pivot your strategy in sync with real-time demand changes.
Efficient so it can take away manual processing to a large extent and save on critical labour resources needed to lead growth.
Blog Contributors – Revenue managers from India:
The insights and tips in this blog have been contributed by leading and passionate revenue managers of the hospitality industry.
Smritee Shah, revmerito: An experienced Revenue Strategist at Mumbai-based revmerito, Smritee has been pioneering for hotel brands to establish their own identity, particularly in the light of increasing competition and distribution shift to make the direct channel stronger.
Kamal Kishore, Redsky Hospitality: With more than 20 years of hospitality experience, Kamal Kishore founded Redsky Hospitality in 2012 and has been a stalwart in revenue management in India’s hospitality industry. His experience of working in some of India’s leading hotels now benefits more than 50 independent properties in India and beyond that have chosen Redsky as their revenue management partners.
Jaydeep Advani, Rateping Pricing Intelligence: In his own words, Jaydeep has an undying passion for start-ups, hospitality and technology. The perfect combination for revenue management and online distribution, his chosen fields of specialisation.
Shanta Kamath, Revnomix: After working with multiple hotel brands, driving their sales and partnerships, Shanta joined Revnomix as a Director of Business Solutions in 2021. The company’s RevSeed tool based on Artificial Learning and Machine Learning is used by more than 200 hotels to drive up profitability.
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