Integrating Revenue Management, Marketing Data and Analytics
By Kelly McGuire Vice President, Advanced Analytics, Wyndham Destination Network | November 02, 2014
It is not news to hoteliers that there are advantages to revenue management and marketing working more closely together. The better synchronized these two activities are, the more profitable the enterprise becomes. As an industry, we've been talking about opportunities in this area for a while, and recently with the advent of digital marketing and personalization initiatives, the need has grown for these groups to work more closely together. In this article, I'll talk about emerging opportunities to synchronize demand generation and demand control activities with the goal of profitably increasing guest engagement and guest conversion.
Intelligent Demand Management
In past discussions, I have outlined the kinds of data and analytic results that should be shared between marketing and revenue management. For example, revenue management should provide demand patterns and prevailing rates to marketing so that campaigns can be placed in need periods, and pricing does not dilute revenue. Marketing needs to let revenue management know when campaigns are running and what the expected lift will be so that revenue management can adjust forecasts accordingly. This ensures that promotional rates stay available, and pricing reflects where the demand is really coming from. Both groups need access to this information when they need it and in the systems they use every day. They should not have to wait for the next weekly meeting.
After this simple data sharing step, I have advocated that this kind of data can be incorporated into each departments analytics, so the RM forecasts automatically account for demand from promotions, and the marketing systems automatically predict what campaigns should be deployed to which segments to stimulate the "right" demand to fill the need. I have called this vision of synchronized decision making across pricing, revenue management, campaign optimization and customer relationship management "intelligent demand management". It should no longer be about one group generating demand and one group controlling demand each in isolation. Rather, both teams manage demand through the funnel, ensuring that decisions made at the points where demand is generated or controlled are synchronized to what is most profitable for the hotel as a whole, not what is likely to meet a departmental goal or incentive.
I have always recognized that this vision of intelligent demand management was not just a technology strategy. While technology could be the glue that binds these departments together, in most cases, achieving this level of synchronized decision making requires organizational and culture change as well. Reporting structures may need to be adjusted and incentives realigned. Departments will need to spend time to understand how each other work, and to develop a common business language. Then automated reporting and analytics can support a shared vision and strategy.
Since I started writing about intelligent demand management, the industry has made a lot of progress. I have seen many examples of companies adjusting their organizational structure to have marketing and revenue management reporting up into a common VP or SVP. I hear stories about sharing reports across divisional lines, and adjusting marketing plans based on demand patterns. This is really exciting to me because the market has certainly not slowed down to allow us to catch up! In fact, new initiatives across the hospitality industry are making a tighter relationship between marketing and revenue management even more critical.