HOTEL BUSINESS REVIEW

October FOCUS: Revenue Management

 
October, 2017

Revenue Management: Technology and Big Data

Like most businesses, hotels are relying on technology and data to drive almost every area of their operations, but perhaps this is especially true for hotel Revenue Managers. There has been an explosion of technology tools which generate a mountain of data - all in an effort to generate profitable pricing strategies. It falls to Revenue Managers to determine which tools best support their operations and then to integrate them efficiently into their existing systems. Customer Relationship Management, Enterprise Resource Planning, and Online Reputation Management software are basic tools; others include channel managers, benchmark reports, rate shopping tools and review systems, to name a few. The benefits of technology tools which automate large segments of a Revenue Manager's business are enormous. Freed from the time-consuming process of manual data entry, and having more accurate data available, allows Revenue Managers to focus on analysis, strategies and longer-term decision-making. Still, for most hotels, the amount of data that these tools generate can be overwhelming and so another challenge is to figure out how to effectively utilize it. Not surprisingly, there are some new tech tools that can help to do exactly that. There are cloud-based analytics tools that provide a comprehensive overview of hotel data on powerful, intuitive dashboards. The goal is to generate a clear picture, at any moment in time, of where your hotel is at in terms of the essentials - from benchmarking to pricing to performance - bringing all the disparate streams of data into one collated dashboard. Another goal is to eliminate any data discrepancies between finance systems, PMS, CRM and forecasting systems. The October issue of the Hotel Business Review will address all these important developments and document how some leading hotels are executing their revenue management strategies.

This month's feature articles...

Sanjay  Nagalia

Every year, it seems as though the hospitality industry faces more competition, new opportunities to leverage their data, and difficult organizational challenges to overcome to remain competitive in a hypercompetitive marketplace. The popularity of the sharing economy, dominating OTAs and a growing generation of often-puzzling consumers all give pause to hotels as they strategize for a more profitable future. Hotels have been feeling the heat from OTA competition for several years, causing many organizations to double down on their efforts to drive more direct bookings. Revamped loyalty programs, refined marketing campaigns and improvements to brand websites have all become primary focuses for hotel brands looking to turn the tables on their online competition. READ MORE

Brian Bolf

Revenue management tends to be one of the most challenging hospitality disciplines to define, particularly due to the constant evolution of technology. Advancements in data processing, information technology, and artificial intelligence provide our industry with expanded opportunities to reach, connect, and learn from our guests. Ultimately, the primary goals of revenue management remain constant as the ever-evolving hospitality industry matures. We must keep these fundamentals top of mind, while proactively planning for the tighter targets that lay ahead. That said, how can we embrace these innovations, operate under constricted parameters, and learn from the practices used today to achieve our same goals moving forward? READ MORE

Will Song

Airbnb is less than a decade old, but it has already begun to make waves in the travel industry. The online marketplace where individuals can list their apartments or rooms for guests to book has been able to secure a surprisingly stable foothold for itself. This has caused some hoteliers to worry that there's a new competitor in the market with the potential to not only take away market share but drive prices down lower than ever. Let's take a closer look at how Airbnb fits into the industry right now and then walk through the steps of the ways your hotel revenue management strategy can be adapted to the age of Airbnb. READ MORE

Steve  Van

Since revenue management is a relatively new and still-evolving discipline, it lacks the dedicated curriculum and the focused and formal training and education found in most schools. That makes it even more important that owners and operators remain on the constant lookout for revenue management talent-and should be prepared to seize it when it arises. The revenue management professionals in the director and above positions are working and are (for the most part) very good at their jobs. Do you have a catering assistant whose first question each morning is 'Did we sell out?' If so, you may have just found your next revenue manager! READ MORE

Yatish Nathraj

Technology is becoming an ever more growing part of the hospitality industry and it has helped us increase efficiency for guest check-inn, simplified the night audit process and now has the opportunity to increase our revenue production. These systems need hands on calibration to ensure they are optimized for your operations. As a manager you need to understand how these systems work and what kind of return on investment your business is getting. Although some of these systems maybe mistaken as a "set it and forget it" product, these highly sophisticated tools need local expert like you and your team to analysis the data it gives you and input new data requirements. READ MORE

Jenna Fishel

You do not have to be a hospitality professional to recognize the influx and impact of new technologies in the hotel industry. Guests are becoming familiar with using virtual room keys on their smartphones to check in, and online resources like review sites and online travel agencies (OTAs) continue to shape the way consumers make decisions and book rooms. Behind the scenes, sales and marketing professionals are using new tools to communicate with guests, enhance operational efficiencies, and improve service by addressing guests' needs and solving problems quickly and with a minimum of disruption. READ MORE

Jon Higbie

For years, hotels have housed their Revenue Management systems on their premises. This was possible because data sets were huge but manageable, and required large but not overwhelming amounts of computing power. However, these on-premise systems are a thing of the past. In the era of Big Data, the cost of building and maintaining an extensive computing infrastructure is incredibly expensive. The solution - cloud computing. The cloud allows hotels to create innovative Revenue Management applications that deliver revenue uplift and customized guest experiences. Without the cloud, hotels risk remaining handcuffed to their current Revenue Management solutions - and falling behind competitors. READ MORE

Gary Isenberg

Hotel room night inventory is the hotel industry's most precious commodity. Hotel revenue management has evolved into a complex and fragmented process. Today's onsite revenue manager is influenced greatly by four competing forces, each armed with their own set of revenue goals and objectives -- as if there are virtually four individual revenue managers, each with its own distinct interests. So many divergent purposes oftentimes leading to conflicts that, if left unchecked, can significantly damper hotel revenues and profits. READ MORE

Breffni Noone

While hotel company in-house revenue management training programs and collaborative partnerships such as the industry-academia partnership that I wrote about previously, can go a long way towards developing the right revenue management talent, we are continuing to witness growth in the talent shortfall. Here, I take a look at a recent initiative launched by HSMAI to complement existing talent development programs, and draw on some of the insights gained from a HSMAI-sponsored Think Tank to suggest some practical actions that hotels can take to promote the revenue management discipline and grow their revenue management talent pool. READ MORE

Jaavid Bharucha

Revenue management is widely defined as the application of disciplined analytics that predict consumer behavior at the micro-market level and optimize product availability and price to maximize revenue growth. The primary aim of revenue management is selling the right product to the right customer at the right time for the right price. The essence of this discipline is in understanding customers' perception of product value and accurately aligning product prices, placement and availability with each customer segment. READ MORE

Mark Ricketts

While there are many service industries, hospitality is certainly one of the most complex. The closest comparison may be a cruise ship, or, to a certain extent, air travel. But for something firmly rooted at all times to the ground, we'll take bragging rights. We are providing an extremely intimate service, lodging, within the confines of what is nothing more ambitious than running a small city. The modern hotel comprises housing; utilities and other infrastructure; security; an employment force; a commons, i.e. lobby; and, oftentimes, food, beverage and recreation. We bring together under one roof people from all walks of life, with varying needs, expectations and personalities, everyone from a business executive stressed over tomorrow's important meeting to a senior couple celebrating their 50th anniversary. READ MORE

Francesca Vereb

The big data revolution isn't just on the way, it's already here. As of 2012, more data crossed the internet every second than was stored on the entire world wide web 20 years before. From bounce rate to time spent on site to conversion rate and more, it's now possible to access every step of the buyer's journey in great detail. As an enterprising hospitality professional, it's your job to take advantage of that unprecedented access to data. The problem is that big data often feels overwhelming, leaving you and your team to filter what correlations are important, which are just noise, or how to sift the wheat from the chaff and incorporate the useful data into your marketing strategy. Here are the changes and data to pay attention to. READ MORE

Jim Vandevender

Revenue management has come a long way since its early days of basic yield management. Many consider 1989 a pivotal turning point when revenue management became a permanent part of hotel management and not just a passing trend. With advancements in market data, decision science, and technology, revenue management continues to evolve. This is especially true of the groups and meetings segment, where revenue managers are using market data and advanced analytics to inform their actions, hone sales strategies, and unite sales and revenue management toward a common goal. READ MORE

Bram Gallagher

Revenue managers are increasingly interested in the potential for alternative performance metrics to give a better understanding of profitability than RevPAR. In this paper, I describe an NOI metric CBRE Hotels' Americas Research is developing to give a better understanding of the relationship pass-through performance has with occupancy. To produce this metric, I estimate expenses and revenues from all sources separately with an econometric model. The difference of the sum of expense from the sum of revenues is the NOI. I demonstrate that when occupancy is increasing, revenues grow more quickly than expenses, and NOI growth exceeds RevPAR growth. Take a look… READ MORE

Michael McCartan

Michael McCartan, Managing Director of Europe, Middle East & Africa for Duetto, looks at why the hotel industry has historically lagged behind the technologically advanced online travel agents (OTAs). He addresses the issues of data sharing and analytics, and how these can help shape revenue management decisions as well as enhance the guest experience. He looks at machine learning and technology as a way of removing friction from the guest experience, and questions how this can be incorporated into hotel operations. And he calls on the hotel industry to work together to open up a shared “data lake” and compete head-on with the OTAs. READ MORE

Megan Wenzl

It is hard to argue that a hotel's primary focus be anything else but the guest, but just how essential is it for hotels to be customer-focused? The answer is - very essential. A major part of being customer-focused is understanding and then ensuring you are giving guests what they want. Specifically, if guests are looking for experiences, then create experiences that are unique and personalized. Details matter. In the 21st century, customers have access to a wide variety of valuable third-party information about businesses to help them decide on a hotel at which to stay on their next vacation. READ MORE

Benjamin Jost

As we enter into the planning period for 2018, you might be talking about revenue forecasting, occupancy rates prediction, holiday promotions - but have you factored in the winning guest feedback formula to operate a hotel successfully? This "winning formula" is one I've written about before, but here, and in my two upcoming articles, I'll be sharing specific details on how to use this formula in your 2018 planning, in order to see greater success next year. By now, you probably want to know what this formula is. READ MORE

Lily Mockerman

When beginning the search for a room, guests already have certain ideas of the class of hotel they'll consider, amenities that they expect, and the price they're willing to pay. They also have an idea of how the room will be used, special considerations they will require, and how they want the experience to play out. Hoteliers need to be able to anticipate these guest expectations, even though the value perception for one guest is totally different than another, to be able to not only meet them but exceed them, and to align prices with the potential guest's budget. READ MORE

Derek Olsen

Outsourcing components of hotel operations is very much location-driven, property-specific and varies based on Ownership's investment objectives. So, while outsourcing might not be the solution for every hotel at this point in the cycle, an astute asset manager or operator should evaluate all opportunities to enhance profitability. When pursuing the employment of a third-party, performance should be closely monitored, with transparent lines of communication between owner and operator to maximize guest satisfaction. READ MORE

Sarah Lucas

A decade ago it might have been socially acceptable to swim with dolphins in a hotel pool. But those days are gone. Now posting a holiday pic posing with Flipper is hugely controversial. Just ask reality TV star Kim Kardashian, who found herself in hot water after swimming with dolphins in Mexico. Or Real Housewives' Bethany Frankel, who copped a wave of social media criticism for visiting Atlantis Paradise Island's Dolphin Cay in August. READ MORE

Leora Halpern Lanz

Hoteliers, marketing directors, and revenue managers in particular are continuously learning how to put the pieces of the puzzle together when it comes to creative and effective options for selling out room nights. Numerous challenges arise with the plethora of new distribution technology, which complicate the process of directly reaching the guest, or even controlling a hotel's presence on the variety of brand and third party websites. READ MORE

Lisa Ross

The U.S. Hispanic market is growing in both size and purchasing power, and it is an audience that should be top of mind for major hotel brands. As the largest ethnic minority in the country, this group of 57.5 million represents 17.8 percent of the total population, and is projected to increase to a whopping 28.3 percent by 20601. And with annual hotel openings tripling over the past five years, it makes sense to look at new guest segments to fill all those new rooms. READ MORE

Bob Caputo

Health and wellness experts represent a profitable branding opportunity for hoteliers worldwide. Featuring specific experts or forging alliances hotels can separate themselves from the competition and increase bookings among a new group of travelers and millennials. Hotel executives have an opportunity to leverage the physical equipment at their disposal, namely, the gyms and fitness centers within their respective properties and resorts. READ MORE

Peter Stark

All current research regarded to labor indicates that there will continue to be a shortage of well qualified workers in the future. In a recent survey commissioned by Indeed, they found that over 50% of US workers are thinking of making a career change. As we approach the new year, this is one of the most frequent times that employees think about changing jobs. What are you doing to create the workplace where once employees enter, they remain fully engaged, committing their time, talent, and enthusiasm to ensure the success of the organization? READ MORE

David Ashen

With the rise of technologic innovations throughout the hospitality industry, brands are incorporating new systems that not only affect the way hotels operate, but also the guest experience. David Ashen, partner and founder of interior design and brand consulting firm dash design, looks at how the industry is responding with programs like mobile check-in, app-driven food service, robotics and other systems, along with their influences on the guest experience. READ MORE

Benjamin Jost

While it's unlikely that Mary and Joseph left a scathing TripAdvisor review after being turned away at the Inn in Bethlehem, hotel reviews have been around, in various forms, since the first hotel opened its doors. As with many other human activities (relationships, journalism/information sharing, etc), "reviews" have become digital. And like those other activities, entire ecosystems have sprung up to support this new channel. READ MORE

Jorge  Alonso

For hotels with multinational operations, communication in other languages and multilingual content have become part of their everyday processes. Hiring a translation company involves consideration and implementation of a long-term translation strategy. The strategy must be set with 3 key variables in mind: content, time and budget. According to the type of content and use, the most adequate workflows and services are defined. Based on the deadline, the number of professionals, the tools and quality assurance required are set. READ MORE

Ann Brown

As a former spa director of one of the largest resort spas in the Midwest, I know how important it is to evaluate new products and services in order to determine which ones offer true potential for wellness for the client and profitability for the business. As a property manager or owner, your phone rings constantly with vendors who want you to consider their products and services. Below, here are a few questions to help you decide if a trend is right for your property. READ MORE

Kim Grennan

Freelancers and independent contractors are at the forefront of the New Economy. Hotel executives have the opportunity to work with members of this global network of experts and professionals. This movement benefits employers and employees alike, enhancing quality and increasing efficiency. These benefits can be an advantage for the hospitality industry as a whole, as talent expands and choice grows at an exponential rate. Seizing this chance to innovate is one that hotel executives can leverage regionally, nationally or internationally. These facts illustrate the strengths of the New Economy and its worldwide influence. Welcome to the beginning of a new chapter in business leadership. READ MORE

Lorraine Abelow

Due to the exponential growth of digital media, how we plan and book our vacations has changed dramatically over the past two decades. The environment is constantly evolving; with an increase in the use of mobile content being amongst the most recent advances. Travel Public Relations firms can help you to remain fully informed about this rapidly-changing landscape. Magazines, guidebooks and newspaper supplements were once seen as the ultimate authority on travel. But now the biggest touchstones also include online reviews, travel websites and blogs. READ MORE

Dana Kravetz

The matters weighing on the minds of hotel and resort owners and operators are many: average daily rates, occupancy levels, market penetration, revenue generation, operating costs, growth trajectories, tourism trends, customer service demands, real estate concerns, budget constraints, inventory management, cyber security and effective marketing strategies are a few of the major ones. Labor and employment issues are an unusually significant source of concern for hotel executives as well, demanding a disproportionate amount of their attention given the burdensome legal requirements imposed upon employers. READ MORE

Coming up in March 1970...