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.