Measuring your success in revenue management
Step by step our aim is to show the activity, success and solidarity of the hospitality family in the Middle East
A general and widely accepted definition of Hotel Revenue Management goes as follows:
Selling the right room to the client at the right moment and at the right price.
The mission of the hotel owner/general manager is to implement revenue management strategies and processes, in order to optimize and maximize its revenues.
The hotel room is a perishable product, since the number of hotel rooms is limited. As a result customer satisfaction and pricing remain the most important dynamic variables, which are subject to hotel revenue management. It is all about balancing demand and capacity by forecasting prices for the purpose of maximizing the effectiveness of hotel services.
However, the rise of the internet during the 21st century (and with it the rise of online travel agencies) has added another dimension to this field. This development has made traditional hotel revenue management much more complex, while providing new ways to cheaply and objectively measure both customer satisfaction and pricing.
With the advancement of technology, the best methods for optimizing hotel revenue management now include much more than the traditional practices of hotels in the past.
A recent industry shows that most of the business comes from direct/phone reservations. It shows the internet is becoming an increasingly important channel when it comes to hotel bookings (unlike the situation decades ago). Because of this, using traditional hotel revenue strategies, plus practices that involve sophisticated automated software, allows hoteliers to strategically search up to the minute information, in order to give their property a competitive edge among other hotels and resorts.
Strategic pricing, rate discipline, automation and smart computing are also integral parts of a successful hotel revenue management strategy.
The revenue per available room index is always a good starting point, before drilling down deeper to get a more concise picture about opportunities to improve.
It is very important to set up key performance indicators that will help you understand how you are doing against your objectives to measure your business performance and guide, enabling you to manage, control and achieve desired results.
Revenue task lists can be extended up to hundred tasks daily, weekly, bimonthly, etc. This is not only related to revenue issues but also extends to sales and marketing.