Hotel industry is developing rapidly, and the functions of hotel management are changing together with the conditions provided by the growing needs of hotel guests.
It is not enough to choose the hotel with best location and amenities nowadays. The clients are looking for hotels with positive guest feedback, presence all over Internet, and, of course, best room rates offered by various sales channels.
In order to address these needs, hotels cannot implement marketing strategy without understanding where the financials go and how costs are allocated. Previously, marketing function in hotel management was linked with sales and reservations.
Marketing managers did an important job of analyzing past guest profiles and developed marketing strategy based on guest reviews and feedback. The only performance indicators analyzed by marketing managers were simple percentages: new guests versus past clients, female versus male guests, guests by age, nationality, etc.
Modern hospitality industry sets new requirements for marketing and sales: knowledge and understanding of key hotel performance indicators. Channel management has changed from reactive to proactive. Hotel revenue and yield management necessitates deeper marketing analysis than before, and the existence of more than a dozen sales channels (especially online sales channels) facilitates the development of various channel management systems.
The implementation of pricing strategies and yield management calls for deep market analysis and guest segmentation techniques to ensure that the channel management strategy is effective. All room rates together with discounts and offers should be target market oriented. Otherwise, marketing strategy will fail to deliver its key result – new guest arrivals.
Modern CRM systems integrate existing channels into a system of channel management which incorporates GDS, social network bookings, and website bookings into a single platform for the ease of application by the sales and marketing managers of the hotel. CRM systems also help with competitor room rate analysis and in some cases even provides forecasts of the future pricing strategies within the region of hotel location.
These tools are nowadays one of the most prominent technological findings in the hotel industry and something that marketing managers can apply in their market reports. However, understating of the channel management requires knowledge of the hotel performance indicators, such as ADR, RevPAR, GOPAR, and others. Most marketing managers are people with high degree of creativity, but they usually lack financial background to understand these performance indicators.
Therefore, there is a growing need for an integrated approach towards hotel marketing: financial data is essential for understanding the hotel market nowadays. Without the knowledge of hotel financial indicators and the pricing strategy basics, marketing managers are incapable of development of successful hotel marketing strategies.
Financial indicators that are analyzed as part of the market analysis help marketing managers increase the effectiveness of sales and see the results of their marketing strategies in action.This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.
Mila Petruk is a hospitality consultant and a founder of Milina Outsourcing Management (MOM) which provides consulting to hotels and restaurants including mystery guest audit, temporary staffing and training support. Being a hospitality industry enthusiast, Mila has a global insight into the developing trends of hotel and restaurant business all over the world.
Having a rich international hotel work experience and an MBA from one of the reputed Swiss hotel schools, she has applied it in almost every hotel department she had worked. Contact Mila at email@example.com. Mila writes a regular column for 4Hoteliers.com.