Looking Ahead to Revenue Management in 2020
By Brian Bolf VP of Revenue and Profit Optimization, Kokua Hospitality | October 22, 2017
From driving a vehicle to constructing a building, alignment is the foundation for ensuring stability (competitive advantage), obtaining optimal traction (demand), and safely handling capacity (supply). Despite revenue management remaining neutral in its pursuit of optimal performance, many other disciplines within the hotel organization remain fairly isolated and instead focus on departmental objectives. Although specialized areas of concentration, such as meeting group cross-over goals or improving customer satisfaction scores, can lead to improved hotel performance overall, establishing fundamental goals across all internal teams is the true bedrock to build upon.
These goals must first be established by ownership and management, then shared through open and transparent communication to ensure each and every department's objectives are aligned. The most successful organizations identify their vision, broadcast their everlasting devotion to their objective, and focus all of their efforts to achieving their goals, relentlessly. This model is what will lead to the perpetual success of a hotel.
Once the internal team is aligned and focused on an undivided mission, it is much more palatable to tackle bringing that vision to market. At this point, the hotel's goals are actually measureable, hoteliers can be held accountable, and unified targets are identified. Establishing these target markets and guests is crucial. While that seems to be an obvious statement, over the last decade, this has been somewhat cast aside for a number of reasons. During and following the recession, hoteliers cast their marketing nets far and wide, attempting to satisfy the needs of all guests.
Next up, we had an infinite amount of technological platforms become available providing new distribution pathways and allowing for the expansion of market segmentation, almost to the point of chaos. Rather than cast our net to the infinite depths available, success lies in utilizing resources to hone in on your targets. It is unlikely that a single hotel exists today that would serve as the property of choice for each and every traveler, so why try to satisfy that need?
With the specialization of room offerings, loyalty programs, amenity choices, social climates, and a host of other attributes, it is not a reasonable expectation that any one hotel can remain genuine and preferred by the entire market. Travelers are individuals expecting personalized service. They desire a customized, unique experience delivered to them in return for their booking commitment. Travelers are also faced with an overwhelming amount of hotel options that are continuously marketed to them, especially when compared to more limited travel options, such as car rentals and flight options.
The deliberation process grows deeper as hotel bookings are known to be much more of an emotionally driven selection directed by personal preference. After all, the hotel serves as the traveler's home away from home for the entire travel experience. In the end, a customer is seeking to meet his or her specific needs; hotels should be doing do the same, refocusing their external alignment to their respective audience and continually evaluating this match. It is a two way street.