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?
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