Hotel Revenue Paralysis From Over-Analysis
By Steve Van President & CEO, Prism Hotels | October 23, 2016
We have all heard the old cliche that "less is more", and, while there is a grain of truth in the notion that simplicity and clarity are sometimes preferable to complexity, the reality is that, regardless of the circumstances, more information is almost always a better bet.
Today we are seeing the tension between these two ideas play out in the hotel industry, where revenue management has exploded with new approaches in recent years–almost all of it facilitated by an avalanche of previously ignored or unavailable data.
Consider just how sophisticated revenue management has become in the hotel industry. Today we have new tools and new technologies telling us who our customers are, when they book, how they book, who they are booking for, what price point they are booking, and where they are booking from.
Technology is enhancing the management of the 24-hour cycle of supply and demand that is the beating heart of our business. Automated systems gather, organize and dump data nightly to be made available for immediate forecast updating. Technology makes it possible for revenue optimizers to see immediate year-over-year variances from any angle and through any lens. We even have technology that provides us with what amounts to a window into the future, supplying detailed pace and booking activity to assist in predicting which pieces of business are integral to the bottom line.
The sum total of these technological and operational shifts constitutes a leap forward for our industry–all in a relatively short amount of time. In fact, most hotel professionals would readily acknowledge that we are still in the midst of this revenue management revolution: we are still learning how to leverage these tools, how to harness this new data gathering power, and how to optimize these resources to turn raw information into usable insights.
The big question (and perhaps the only question that matters when it comes to revenue management) is what now? We utilize technology to gather all of this data, so that we have all of this data. But what is next: what do we do with it in order to take full advantage of this new technological and informational capacity?