Revenue Management in an Increasingly Networked World

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | September 26, 2013

In recent years there has been a steady increase in the use of internet sites by customers, especially the use of third party booking programs to assist them in planning their holidays. This has helped to dramatically change the way in which hotels manage their room rates and occupancy levels around the clock. In 2008 alone, it has been estimated that 40% of all hotel bookings will be generated by third party internet booking sites.

A figure of such potential magnitude as this obviously represents a large slice of a hotels potential clientele base. As the majority of hotels are continuing to embrace this new technology, many are forgetting to ensure they have the correct revenue management support in place beforehand.

The nature of implementing effective revenue management and pricing strategy's is constantly evolving due to the advent of new technologies, which are continuing to change the face of the hospitality industry. With the increase in the various choices of distribution channels for Hotels, it is no longer appropriate to expect a Reservation or Revenue Manager to handle a multitude of manual Extranets to ensure revenue management and pricing integrity.

Hoteliers are now faced with a key decision, of which the outcome will directly affect their hotel's overall revenue potential. The choice involves having key staff spending a number of hours per day updating these channels manually or creating an environment where the implementation of any pricing decisions is largely automated.

The second option actually means that resources are freed up to focus on strategically important issues aimed at enhancing a Hotels performance. The Hospitality industry is continuing to steadily move towards a more dynamic pricing environment, which means it is vital that the correct technology infrastructure is in place to meet the growing needs from day one.

With the advent of the internet and other online customer forums, consumers are becoming more aware of factors that influence the prices they are offered. With this increase in consumer awareness, there is a growing imperative for hospitality organisations to be aware of the effect that pricing can play on their overall revenue potential and their ability to reach financial stability.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.