Revenue Management: A Critical Skill for Sub-Saharan Africa's Burgeoning Hospitality Sector

By Mmatsatsi Ramawela CEO, Tourism Business Council of South Africa | October 26, 2014

Thanks to a larger, younger and increasingly more urban population; an emerging, techno-savvy middle-class with a growing appetite for consumer goods, business services and travel; coupled with stabilizing governance structures, large infrastructure development roll-outs and a resources boom in several countries - Africa and specifically the sub-Saharan region is fast becoming an economic force.

For us in the hospitality and broader tourism space, this economic boom has been a long time coming. South Africa's successful hosting of the 2010 Soccer World Cup was a great catalyst for hotel investment. During this time, there was a hive of activity in the accommodation sector as the country (and continent) prepared to host visitors attending the mega-event. We saw small accommodation operators in the form of B&Bs and guest houses mushrooming across the country. We saw local and regional hotel operators refurbishing existing stock and more significantly, we saw an increased number of international hotel brands enter the market.

Four years later, the hospitality industry's focus has shifted beyond borders of South Africa and is firmly on the region. Both homegrown and international hotel brands are scrambling to secure their piece of the 'African hospitality pie'. Although countries such as Morocco and Egypt in the North had a head start in establishing themselves as top vacation spots for international tourists, a large part of the sub Saharan Africa region (with the exception of a few Southern African countries such as South Africa, Zimbabwe, Mauritius) had to play catch-up in the last few years. Regardless, all indications are, it will not be long before all 49 countries which make up this region each have branded hotels.

This bodes well for the future economic growth of the region and more importantly, it also presents the hotel sector with a unique opportunity to invest time and effort in establishing a strong pool of talent, with the required expertise and skills in areas which are critical to the performance and sustainability of these businesses.

Revenue Management is a Critical Skill

To grow this talent pool, one of the most underrated specialist areas the sector must pay attention to is revenue management. After all, beyond the hotel reception where the guest is warmly welcomed or the in-house dining experience, it is not very often that the technical aspects of running a hotel as a business are well-considered. This is particularly try for those who have aspirations to work in the sector and even for those who are already working in the sector but seek growth opportunities. Yet, it is this ability to sell the right room, to the right customer, at the right time and price which has become an invaluable skill in today's hospitality environment.

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Coming up in February 2019...

Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.