Firing Up the Revenue Productivity Engine

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | July 22, 2018

As is covered in so many articles, blogs and news items out there today, we live in a world of change, and a lot of this change is driven by technology. We are being bombarded by the next best thing for the industry, including voice, IoT, analytics and many other buzzwords and topics. Certainly, advances in  technology open doors to new business opportunities, yet at the same time invite new challenges and costs associated with adapting your business to new ways of working. The approach you choose can propel you full steam ahead on a journey to revenue success or take you on a circuitous, side-tracking route that misses its target. Choosing the right path for your organization that aligns with your strategic objectives can be a daunting task.

With so many solutions available today promising to attract more guests, enticing them with your most profitable products to ensure their return, where does one begin? You could start with little tweaks at the edges of your current technology and processes and gradually work toward the core opportunities. Or you could set the bullseye right in the heart of the lifeblood of your organization: your revenues. If you follow the money, you'll find it comes from your guests-your livelihood. Being able to craft the right product assortment at the most compelling prices that keep them coming back will mean continuous revenues, even in tough times. I have touted the benefits of a guest-centric revenue strategy for a long time now, and this is amplified by the need for a revenue productivity engine that delivers results.

The concept of a revenue productivity engine begins with a theme lifted from W. Timothy Gallwey's best-selling book, The Inner Game of Tennis. Tennis is not only a game of endurance and skill, but also very much a game of psychology. The same can be said about creating your revenue productivity engine. It's imperative to understand your revenue psychology - making sure your revenue performance will equal your revenue potential, minus any interferences - before setting out on the journey. Operating in the here-and-now ensures you crystalize your goals throughout the organization. Using an analytics framework is the sure-fire way to instill a culture that operates on data proven by science and reduces overthinking which allows inconsistent judgment to cloud the vision.

A revenue productivity engine lets you shorten the distance between intuition and action and gets you to richer rewards faster, more economically, and with better buy-in and employee engagement along the way. Think of the revenue productivity engine as a navigation system on your J.O.U.R.N.E.Y. Let's deconstruct this analogy.

JUSTIFY – What is happening in your organization that is making change apparent? Perhaps it is from changes in market conditions, such as a rise or downturn in the economy, increased competition-including the pressures of alternative lodging choices or pressure to modernize to align with guest preferences and hospitality trends. Or, it's become obvious that internal processes are inefficient, outdated, laborious and causing you to lose talent. Maybe your technology is just covering the basics, only handling bookings and distribution, when you know you could be deriving more value from your data.
 
OPPORTUNITIES – Take a look outside of yourself and your organization. With fresh eyes, look for new segments that could be served or identify corporate change efforts that could align business units to work in greater harmony. Decide to make a positive change in your revenue strategy, ensuring you use modern technology to solve your business challenges. Create a realistic roadmap outlining your objectives and corresponding deliverables. Once your teams are on the same strategic path, you will have the commitment and resources you need to have a strong start to your journey.

UNDERSTAND – There are many roads you can take to reach your goals. Become familiar with the available choices and seek the technologies that align with your business objectives. Make analytics your best friend. Don't rely on hype or what could be. Rely instead on proven performance, using data in a validated and measurable way. Know that not all revenue management systems are created equally. A sophisticated solution will give you the foundation from which you can measure your pace along the journey, drawing from the vast analytical outcomes generated from your own data reserves and the market around you. With so many infinite data points to analyze and optimize, your technology should use this valuable information to understand the nuances of unconstrained demand, price and elasticity of demand and revenue-areas that cannot be effectively analyzed when you only skim the surface of available data-and help make more informed revenue strategy decisions.

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Coming up in January 2019...

Mobile Technology: The Future is Now

Mobile Technology continues to advance at a relentless pace and the hotel industry continues to adapt. Hotel guests have shown a strong preference for mobile self-service - from checking-in/out at a hotel kiosk, to ordering room service, making dinner reservations, booking spa treatments, and managing laundry/dry cleaning services. And they also enjoy the convenience of paying for these services with smart phone mobile payments. In addition, some hotels have adopted a “concierge in your pocket” concept. Through a proprietary hotel app, guests can access useful information such as local entertainment venues, tourist attractions, event calendars, and medical facilities and services. In-room entertainment continues to be a key factor, as guests insist on the capacity to plug in their own mobile devices to customize their entertainment choices. Mobile technology also allows for greater marketing opportunities. For example, many hotels have adopted the use of “push notifications” - sending promotions, discounts and special event messages to guests based on their property location, purchase history, profiles, etc. Near field communication (NFC) technology is also being utilized to support applications such as opening room doors, earning loyalty points, renting a bike, accessing a rental car, and more. Finally, some hotels have adopted more futuristic technology. Robots are in use that have the ability to move between floors to deliver room service requests for all kinds of items - food, beverages, towels, toothbrushes, chargers and snacks. And infrared scanners are being used by housekeeping staff that can detect body heat within a room, alerting staff that the room is occupied and they should come back at a later time. The January Hotel Business Review will report on what some hotels are doing to maximize their opportunities in this exciting mobile technology space.