|Revenue Management: Culture or Philosophy?|
By Jean Francois Mourier, CEO of REVPAR GURU
Monday, 17th December 2012
Revenue management is a seriously complicated process; there are literally hundreds of different factors that need to be considered in order to be as effective as possible in pricing each room.
And these factors need to be examined on a regular basis, to ensure that rates change as the factors also change. Add to that, the data collection, manually updating rates across all of the online channels, strategy meetings with various internal teams, etc. Ugh. The list goes on and on and on and on
Humans can only do so much. There are only so many (working) hours of the day. We can only analyze one page of data at a time. And humans make mistakes; whether itıs a typo or a mathematical miscalculation, it can cost a hotel thousands of dollars in lost revenue.
But thatıs what is so great about algorithms and technology. There are no costly mistakes. They can work all day and all night, collecting and analyzing data, offering specific rate recommendations and then updating the rates across all online channels. They donıt require any breaks and can be easily supervised at any time from any computer or smartphone.
Unlike other companies who offer rate shopping tools or data reports, I (and all of us at REVPAR GURU) believe that technology is much more than simply data.
Tools (a.k.a. revenue management systems) are what takes a revenue managerıs job from impossible to possible (and successful!) in a short period of time. Revenue managers need a system to handle the minutiae of data collection and analysis, and the time consuming process of updating rates online. Data is fantastically useful, but unless you have the tools to use it effectively, itıs just a bunch of numbers.
Weıre not saying that revenue managers will be replaced by technology. That will never happen and we wouldnıt want it to. Revenue management technology is important but revenue managers are even more important because they are ones who determine the strategy that the RMS should take, who develops relationships with OTA managers, who creates campaigns and who looks beyond data to make good business decisions that will earn a hotel more money.
Revenue managers are essential to the successful daily operations of a hotel, so if your property doesnıt have a talented revenue manager, get one immediately! Once youıve found a trustworthy and capable revenue manager, give your him/her the tools necessary to do the job more effectively: a sophisticated revenue management system. Having both will give your property the edge up over the competition, making it just good (business) sense.
About REVPAR GURU
REVPAR GURU helps hotels to analyze complex data - including historical rates, the rates of competing properties in the same destination, pricing trends and environmental factors - to determine the right rate, at the right time, to secure the highest number of bookings. REVPAR GURU's system calculates room rates up to a year in advance, and continues to update the rates automatically multiple times every day as factors change, across all online channels including OTAs and direct channels. In short, REVPAR GURU helps hotels to increase their occupancy and their revenues.
Headquartered in Miami, Florida, additional information can be found at www.revparguru.com or by calling +1.786.478.3500.