Assessing the Performance of Your Revenue Performance Initiatives

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | May 22, 2016

While revenue management professionals devote significant investments and efforts towards advancing their hotel’s revenue resources, many hotels still struggle with assessing the actual performance of these revenue management initiatives. Namely, how can hotels ensure they are squeezing all the juice out of the proverbial revenue management orange?

The hospitality industry has been using revenue management successfully for decades. However, for many organizations, the greatest revenue management challenge is not necessarily of a technical nature, but often organizational. Confronting hotels today is an essential need to align their people, processes and technologies around achieving maximum revenue performance.

This means that hotels (and their revenue management professionals) have been dedicating significant time, resources and financial investments into the development and advancement of their revenue management strategies, technologies and talent, to embrace more strategic and holistic approaches that capture the right guest at the right time – and at the right price. This also means that today’s hotels are putting a heavier focus on defining the value of revenue management, the importance of benchmarking for success, performing routine and thorough assessments, and collaborating with professional advisors for unbiased approaches to long-term, sustainable revenue success for their hotel organization.

The Assessment Struggle is Real

Not only is it challenging to determine how to properly measure and assess the performance outcomes of a hotel’s revenue management initiatives, but articulating its value proposition and return on investment within the company is easier said than done. Like any complex business process, it’s not surprising to find that revenue management is still often misunderstood - with plenty of opportunities to further its understanding through better education, awareness and adoption. Hotel groups around the world are working with revenue management advisory leaders on a daily basis to instill these types of proficiencies within their organization because of the greater perspective they can bring.

What is often surprising, however, is that two organizations with an extremely similar business model, operating in the same space, and with similar stakeholders will often take two very different approaches to the adoption of their revenue management principles. While one hotel organization may successfully amalgamate revenue management into all of their operational practices, the other may have yet to even determine the value that the practice of revenue management can bring them. So what is it that drives such disparate behavior?

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.