How Revenue Managers Win Using Group Data and Technology
By Jim Vandevender Chief Marketing Officer, Knowland | October 01, 2017
As hospitality revenue management began to take root, most actions were highly reactive in nature. Pricing and inventory controls, for example, were two of the more tactical approaches used to respond to existing demand. The key priority was basically to raise or lower rates. Minimum night stay requirements came into the mix as hotels realized how to maximize the room revenue potential for any given property. Predicting demand for both transient and group was a distant goal.
In the early days when it was still called "yield management," the transient segment saw the most immediate gains from elementary practices, mainly due to the fact that the discipline stemmed from the work airlines had been doing in the area previous to the world of hospitality embracing these ideals.
As the process for optimizing transient demand and revenue became more complicated, the need for and development of deeper levels of data to further hone forecasts increased. Hotel management teams have become savvier at collecting and analyzing available data on guests' decisions of where and when to book a room. The tremendous data on the transient segment includes everything from web statistics as customers shop for rooms to historical data and statistics from a hotel's website, as well as input from online travel agents. There is even data on review sites and social media regarding guests' comments about particular brands or properties. There is data on booking pace that is integral now to accurate forecasting. Every change in any category affects demand for a hotel room. Revenue management sorts through that data to fill the most rooms possible and sell those rooms at the highest conceivable rate, driving higher levels of performance.
Hotel brands and management companies, as well as outside vendors, have developed and heavily invested in a wide array of refined software and revenue-management systems. These systems, however, are focused primarily on pricing; and while transient revenue management has applied and benefited from various forms of market data, group revenue management has been operating in a more opaque competitive marketplace.
The Shift Toward Proactive Group Segment Focus
Groups and meetings are a key component of revenue production for many hotels. Achieving a balance between earlier booking group demand and later booking transient demand is critical for realizing optimal revenue outcomes. Managing the group side of this equation is particularly challenging. Group demand is captured either from inbound RFPs or from outbound sales activities. Picking the right business from the torrent of RFPs coming to a hotel, and pricing that business right, requires foresight about other potential opportunities that might arrive later.
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