Revenue Management, Risk Management and Payroll Processing

Completing the Puzzle

By David Hogan Executive Director of Major Accounts, Heartland Payment Systems | October 18, 2015

According to Cornell University's prestigious School of Hotel Administration (SHA), implementing a revenue management strategy is a vital strategy of hotel operations. SHA defines revenue management as "a systematic process designed to increase revenue by considering demand, reservation scheduling and variable pricing." Revenue management includes evaluating different pricing models, applying duration-management strategies, forecasting, group management and overbooking, pricing strategy, and application of revenue management techniques to other hospitality-related industries, including spas and athletic facilities.

If you have been in the hotel industry long enough, you probably remember filling out paper ledgers by hand. The most recent equivalent is completing a complicated Excel spreadsheet you put together on your own. Everybody has their own reasons for getting into this space. While mastering booking curves and predicting demand is a satisfying part of running a successful hotel, I don't think many hoteliers got into the industry purely to comb through mountains of paperwork or gigabytes of data.

Lodging demand in the U.S. continues to grow and hoteliers should see moderate economic spikes this year, according to PwC's Lodging Forecast. While the industry recovers, hoteliers will resume investing in infrastructure, amenities and technology. Each component plays a critical role in operations. However, most will agree that a hotel's revenue management system (RMS) is the technological foundation that allows hoteliers to profitably operate their property.

Many hotels still have one person dedicated to these tasks, but more and more hoteliers are realizing that they need to dedicate more resources, staff and tools. The revenue managers define the metrics and goals for the hotel and they make sure everyone buys into what those goals are and helps them work toward them.

We know everyone uses some sort of revenue management tool. You simply have to in order to see what you make, how you make it and where you could be spending and saving more efficiently. However, for a revenue manager to do their job well, he must employ a series of tools and use various approaches. With the current software on the market, it seems likely that hotels will move away from compartmentalizing in favor of a central hub of information and revenue-generating capabilities. Many large national chains have already started consolidating their systems.

Among the reasons for this is the rise and effectiveness of data analytics. "Big data" is a buzzword you've likely heard bouncing around lately. It's a broad term for data sets so large or complex that traditional data processing applications are inadequate. This type of data is now being analyzed to help create effective forecasts and maximize revenue.

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.