From Beds to Ballrooms: Total Revenue Performance for Your Total Property
By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | March 10, 2019
Get as much heads in beds as possible while optimizing your hotel's profit potential. This straightforward definition of a revenue manager's job-albeit oversimplified-probably rings true for many of us in the industry. However, if a revenue manager is solely focused on guest-room pricing, then who's in charge of enhancing revenue for the rest of your property?
As I discussed in a previous article, non-room revenue generation often gets segmented out across various departments, each overseeing their own efforts in siloed isolation. But, just as guest experience extends beyond the walls of their rooms to incorporate a bigger-picture view, so too should your hotel's concerted effort on improving total revenue performance.
Hotels can generate more than half of their revenue on non-room revenue streams-with meetings & events (M&E) business comprising the largest slice of this pie-yet traditional revenue managers and revenue management systems still take a limited "heads-in-beds" approach. So, how do we best decide what business to accept when faced with the complexities of multiple revenue stream considerations like function-space booking?
The Whole Is Greater Than the Sum
Total revenue performance is defined by IDeaS Revenue Solutions as "the intelligent calibration of demand across all hotel functions to meet overall business objectives. It is the ability to instantly and systematically decide which business to accept across multiple revenue streams at all times, based on greatest overall value to the asset."
Property-wide pricing decisions and revenue streams share an intricate and complex relationship. With each stream impacting different profit margins and booking patterns, it's important that each be considered and weighed against other functions to attain the most profitable business mix. When brought under the umbrella of one revenue manager or revenue team utilizing sophisticated analytics technology to transform disparate data sets from separate functions into actionable intelligence, total revenue performance can be effectively assessed and optimized.