A Revenue Manager's Guide to Surviving the Awkward Teenage Years

By Kelly McGuire Vice President, Advanced Analytics, Wyndham Destination Network | December 06, 2015

Revenue management is relatively new to the hotel industry. Hotels only really started to adopt revenue management processes and systems broadly in the late 90s and early 2000s. We've managed to achieve success and gain visibility over the last couple of decades, but we are a relatively young discipline in hospitality. In fact, it could be said that revenue management is still in its teenage years, and, in my opinion, we are definitely acting like it:

Hanging Out with the Wrong Crowd

Revenue management has been hanging with
the wrong crowd, particularly during the 2008 economic downturn. We snuck
out after curfew to hang out in the parking lot with a bunch of rogue
technology start-ups who promised a good time reaching new guests through
alternative, deep discount, channels. "Go ahead, sell 1,000 rooms at 50% off
with no restrictions. Everyone's doing it." or "Don't worry, your high
paying guests will never find that out you are discounting rooms 30% day of
arrival."

Experimenting

We have been experimenting with dangerous things. Like data.
Some of this data our parents already warned us about, like regrets,
denials, and weather. But there are new designer data sources too, like
reputation, customer lifetime value, and forward-looking demand. Some may
help us, some may be fun to play with for a while, but some may eventually
kill our forecasts and pricing recommendations.

Making Up Our Own Language

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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.