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The 20 Biggest Travel Technology Innovations of the Last 50 Years

by
Hotel Tech Report
1 week ago

In many respects, 2020 was supposed to be a milestone year. It has a pleasant ring to it, with balance and heft. It also had a convenient correlation to the optometrist’s shorthand for perfect vision. Well, 2020 certainly was a milestone -- but for reasons that no one ever could have predicted.  Given that hindsight is always 20/20, we figured it was time to look back on the history of travel and pull out some of the most important innovations in travel technology over the last half-century. It was a period of tremendous growth, with major expansions of the industry in all directions: land, sea, air. The tourism industry grew from around 165 million in 1970 to 1.5 billion in 2019 (obviously 2020 is an outlier here, so we went with 2019).   Technology was a tremendous force in driving this growth in travel, mirroring broader trends in technology-fueled growth across the global economy. So which travel tech innovations had the greatest impact and fundamentally and positively changed the trajectory of the industry? Here's a timeline of the most important moments in travel technology over the last 50 years. Each signifies a milestone that influenced travel’s journey, ultimately becoming a global industry that provides opportunities for millions of people. The travel industry is changing rapidly and even the dominant online travel agencies aren't safe from disruption.  New technology from augmented reality to next-gen social media like TikTok will continue to change the way we get inspired, where we go and how we share our travel experiences.  Pressing questions lie ahead as we think about the next 50 years and to predict the future it's important that we first understand the past.   The past informs our thinking around transformative questions like: If virtual reality becomes ultra-realistic will we still want to travel in the future? Will biometrics safety tech be so accurate that we'll no longer have lines at the airport? Will the internet of things (IOT) help travel companies deliver hyper-personalized travel experiences? Let's hop on a time machine through the last 50 years of travel innovation!   January 1970: The 747 officially enters service The era of mass tourism really took off with the Boeing 747, which was in and of itself a technical marvel. For the first time, tourists could be transported in large numbers across vast distances. Both leisure and business travel became not just more practical and convenient but also a bit more affordable, as airlines could lower prices by packing more people into a single aircraft.      October 1971: Magic Kingdom opens in Florida And with it began the relentless global march of theme parks worldwide. As the first expansion beyond Disneyland in California, it not only heralded the beginning of an era of mass tourism and packaged culture -- but also the idea that technology could enable more fluid in-person experiences: the entire kingdom was built one story above ground level to accommodate utilidors, the passageways that cloak all operations from public view. That preserves the fantasy -- and put the “magic” in the kingdom.     1976: SABRE opens to travel agents  Since going live in 1960, the GDS had transformed how American Airlines managed its bookings. But the real moment that mattered was when SABRE opened up to travel agents. This meant that travel agents could more efficiently serve customers and thus accelerated the popularity of package tours, resort destinations and last-minute travel. Eventually, of course, Amadeus and Travelport entered the market, further fueling travel’s digital transformation, such as OTAs making self-serve travel a reality.     1976: FOSSE installed as Marriott’s first PMS Dave Berkus wrote the code for his PMS in 1974, growing his business rapidly as he installed his property management system at more hotels. Eventually, Marriott licensed the technology, called it FOSSE, rolled it out worldwide...and proceeded to use it for nearly three decades! The PMS was a companion to existing Central Reservations Systems, which managed reservations externally but didn’t offer functionality to manage internal operations and the guest experience.  Today, there are nearly 700 PMS vendors, alongside other hospitality technologies that help hotels manage operations, reservations and customer relationships.   Legacy tech held sway for decades, but cloud-based options are loosening the grip. [source]   1976: Foreign currency exchange replaces gold standard With the Jamaica Agreement among IMF member countries, floating exchange rates became the global norm. Travel between nations would eventually be influenced greatly by the relative value of each country’s currency, creating a new dynamic in how travel trends unfolded around the world. Fluctuations in currency valuations would now influence the ebbs and flows of travelers based on their home currency’s relative strength and weakness.    May 1981: American Airlines launches loyalty program American Airlines wasn't the first to launch a loyalty program (that honor goes to the defunct Texas International Airlines). But it remains the world’s largest and longest  continuously operating loyalty program. Marriott followed closely after, launching its loyalty program in 1983. Loyalty would eventually become a billion-dollar business for hotels and airlines, who benefited from the rise of premium rewards credit cards.  An early AAdvantage loyalty card shared on FlyerTalk Forum September 1983: GPS goes public  Originally developed for military use, President Ronald Reagan opened the system up to the public in September 1983 after a Soviet jet accidentally shot down a Korean passenger plane. Since then, GPS has been the lynchpin for so many of travel’s transformation technologies. What would rideshare be without mapping? How popular would the iPhone have been without point-to-point directions? Would travelers be comfortable exploring new places in such great numbers without the help of digital maps? The cost would have been too prohibitive for any one company to develop this technology on its own.   A military GPS tracker prior to its public release [source]   January 1988: The first STAR Report  The STR report has become the world’s most indispensable source of market intelligence for the hospitality industry. With the Smith Travel Accommodations Report (STAR), hotels could use actual aggregated data to measure performance against similar hotels. The STAR became indispensable and maintained its place at the center of a revolution in data-driven market intelligence.   The STAR report became an essential part of hotel revenue management.    Early 1990s: Marriott creates Demand Forecasting System Taking a cue from the nascent application of revenue management in the airline industry, Marriott created a Demand Forecasting System for its full-service hotels and a Revenue Management System for its limited service ones (read the genesis story here, it’s a good one!). By building models to predict demand, the hotel could more accurately price its rooms and optimize its revenues. This strategy was obviously transformative and became widely used across the industry -- especially as cloud computing made revenue management more practical for hotels of all sizes.   October 1996: Microsoft Expedia Travel Services Expedia started as an internal project within Microsoft. Its launch in 1996 heralded a sea change in the way travel was booked. No longer reliant on travel agents and ticketing departments, travelers could now research and book travel for themselves. Eventually joined by Booking.com, Google and hundreds others, Expedia entered the scene just as millions of people were accessing the internet for the first time.  As pure-play technology companies, OTAs rapidly cemented themselves at the center of the industry.    An early version of the Expedia website [source] February 2000: Salesforce launches its Web API The first enterprise application programming interface (API) was launched by Salesforce at its IDG Demo conference. Its XML API was the first out of the gate, unleashing a wave of innovation as businesses could share data with other companies and customers in an entirely customizable manner.  As APIs proliferated, data silos fell. Organizations could build applications that pushed and pulled data across products internally, while also making data more accessible to external partners. This accessibility drove innovations around open APIs, which enabled hospitality brands to build customized tech stacks with two-way data sync, all at a lower-cost than legacy tech.     The original Salesforce site. [source]   2001: First review added to Tripadvisor Tripadvisor began as a personalized trip planning website that aggregated reviews from guidebooks. But a small button asking visitors to add reviews took off, with eager travelers leaving reviews en masse. As the first user review site in travel, Tripadvisor began to wield extraordinary power over traveler decisions. Hotels began to watch their online reputations closely, focused on both responding to reviews and getting guests to share positive experiences online. Yelp followed in 2004, cementing user reviews at the center of the online reputation economy. June 26, 2001 from the Wayback Machine.   June 2004: CouchSurfing and “live like a local” home-sharing  Conceived in 1999 and launched in 2004, CouchSurfing was a precursor to the commercialization of home-sharing by Airbnb. Alongside other sites like Hospitality Exchange, it offered travelers an online platform to connect with locals. These “hosts” would not only share their homes with travelers but would often become local guides, showing travelers a real slice of local life -- yep, this was also the original “live like a local” brand promise!  [source]   April 2006: Google Translate introduces instant translation While translation services transformed the way that we communicated across cultures, instant translation changed how we interact in real-time with others. Google Translate was the first mainstream instant translation service. Launched in 2006, it started off as browser-only and struggled to be accurate and sensible. Even in its earliest iteration, it was a tremendous help to travelers. Today, the app now supports 109 languages, with 500 million users translating 100 billion words per day. The app also translates photos and has a “conversation mode” so travelers can communicate fluidly with others. Instant translation also became a standard feature on Apple's latest iOS 14 update, which includes a Translate app that supports 10 languages. Users can download languages for offline translation and can also set up automatic language detection, which makes it a must-have tool for any traveler.   Google Translate’s simple interface made instant translation easy   August 2006: Amazon Web Services and cloud computing Cloud computing has been a fulcrum for innovation. Dave Berkus, investor and inventor of FOSSE PMS, sees cloud as central to the future of hospitality technology: “If we look ahead ten years, and certainly beyond 10 years, it would be easy to see a single cloud based system integrating everything from CRM to reservations to the accounting functions at the properties, all the way through all forms of marketing and follow-through.”  Amazon Web Services accelerated adoption of cloud computing by making it easy for companies to access shared server space on a “pay what you use basis.” Eventually embraced by Microsoft, Google, IBM, Oracle and others, cloud computing helped enterprises reduce IT infrastructure costs and increase flexibility. For startups, the technology was even more transformative, as it reduced upfront IT costs and simplified scaling up to accommodate demand.   [source]   June 2007: the iPhone changes everything After the GDS, which streamlined the buying and selling of travel via phone and online, the iPhone arguably had the biggest impact on travel. It was the start of the mobile computing era, which would eventually put smartphones in the hands of billions of people worldwide. Now travelers could take their computers wherever they went, meaning that they could make reservations at restaurants, search for things to do and, most importantly, stay in touch with friends and family while traveling. The smartphone became an indispensable tool -- and massive fulcrum for the growth of the industry, becoming cameras, contactless credit cards, room keys, taxi dispatchers, check-in counters, mobile travel agents and local guides.   The first iPhone on display in 2007 [source]   August 2008: Airbnb ushers in the home-sharing economy Originally called Airbed & Breakfast, Airbnb essentially commercialized the CouchSurfing model of connecting travelers with locals offering a place to stay. It gave homeowners a way to monetize unused space and fulfilled the emerging “live like a local” traveler ethos. The company would eventually transform the entire hospitality industry by expanding the diversity of accommodation types worldwide. Hotels were threatened, local governments bristled, and Airbnb grew to be a behemoth. The concept would rapidly expand to other assets, such as cars, boats and RVs, forever changing the economics of stuff -- and giving travelers an entirely new way to experience the world.   2010: UberCab launches rideshare revolution Taxis had long been a pain point in travel. From unknown wait times and handsy drivers to cabbies not wanting to go to certain neighborhoods and price-gouging at the airport, grabbing a cab was always a bit fraught. Now, with cabs on demand, pricing was transparent, wait time was visible and a driver’s reputation upfront. Travel would be forever different.   Early images of UberCab   October 2011: Apple integrates Siri into iPhone 4  Voice forever changed the way that we interact with our devices. The journey began when Apple integrated its Siri voice technology into the iPhone 4. As one of the earliest efforts in voice control, it was far from perfect. But it signaled a shift in thinking about the flexibility and accessibility of our digital devices.  The adoption of voice accelerated with Amazon's Alexa in 2014 and Google's voice assistant in 2016.  With all the major players integrating voice, it's now become a ubiquitous way to interact with our devices -- including the curtains, lights and appliances in smart hotel rooms!   Original coverage of voice control by Engadget.   November 2014: Digital keys become the next must-have Demagnetized cards are frustrating -- even more so when you happen to be in Vegas and the front desk is half a mile away. The first hotel chain to introduce digital keys was Starwood, who piloted the SPG Keyless program at 10 hotels in November 2014. Other brands followed close behind, with Hilton announcing a similar pilot later that year.  Since then, keyless has become standard across hotels worldwide. Digital keys also became a clever driver of loyalty, as digital keys could only be accessed by members.  Keyless entry also has become a major part of the vacation rental experience, allowing owners to manage properties remotely without a traditional “hand off” of keys. The ease of access was welcomed by guests, which often valued the self-service aspects of vacation rentals in the first place.   Keyless entry becomes standard as hotels partner with technology vendors worldwide.   2014: Uplift brings “buy now, pay later” to travel Even before Diner’s Club launched its charge card in 1950, most department stores offered some sort of installment plan. Then, as banks began to issue credit cards that didn't need to be paid off each month, America turned to credit and installments fell out of favor. Other regions preferred installment payments over credit, with certain countries (like Brazil) maintaining a strong consumer desire to pay in installments. In 2014, FinTech startup Uplift began offering its core service: a “buy now, pay later” installment option integrated directly into the payment systems of major travel suppliers. There’s also Affirm, which integrated with Expedia in 2016, and FOMO Travel, which offers interest-free payment plans for travel booked through its partners.   Uplift integrates within the checkout flow [source]   Bonus: Travel insurance The first known seller of travel insurance was James Batterson, who opened his travel-focused agency in 1864. For those who could afford to travel, the insurance was a must-have, given the risks of traveling long during that era. Today, travel insurance has become a global industry with a variety of options that range from stand-alone policies, add-ons to existing health insurance policies and benefits attached to premium credit cards.   Travel insurance is an important innovation as it provides peace of mind and confidence for travelers. Travel insurance that can be customized to individual needs offers a backstop to uncertainty for travelers. Of course, the global pandemic revealed how complex the product has become, with many travelers realizing that their policy did not cover COVID.   -- The tourism industry is one of the most exciting and rewarding career paths one can take - staying on top of travel technology trends is critical to success.  Did we miss any major innovations? Let us know over live chat so we can add yours to the list!    

Here’s How Hoteliers Can Attract New Travelers in the Post-COVID Era

by
Kamesh Shukla
1 month ago

COVID-19 has had deep and far-reaching impact on the tourism industry. And, while the world waits for a universally-safe vaccine, most businesses – especially hotels – are starting to plan for the future. How will consumer tastes change as a result of the pandemic? The “new guest” of the immediate post-COVID era will have different needs and expectations of their hotel stay. Property managers can start building services and amenities that meet the demands of the first influx of travelers to arrive after the lifting of COVID travel restrictions now – because only by investing in the right tools and technology today can you get an edge on your competition then. Here’s how traveler expectations have changed during the COVID-19 pandemic and what your hotel needs to do to win more bookings in the future.   Who is the Traveler of the Future? Travelers are paying close attention to how all brands – and especially hotels – are communicating and reacting to the pandemic. Brands that are perceived as “insensitive” to keeping guests safe, or seen as not taking precautions seriously, will be punished in the post-COVID era. There are a few data points from RateGain that demonstrate this point. First and foremost, guests are putting health and safety first. Hotels can expect to see a 4x increase in questions around property restrictions and safety procedures. If your property can’t give a satisfying answer to how it’s keeping guests safe, your brand will suffer: 60% of travelers punished brands for being insensitive in their response to the pandemic. The guest of the future is also turning to social media to learn more about your hotel’s safety protocols, as well as room availability. RateGain found that 65% of Indian travelers prefer getting brand updates on Facebook. In fact, few travelers are turned off by brands that advertised during the pandemic – 92% of those surveyed by RateGain said they could understand the economic stress the pandemic caused and didn’t feel that it was inappropriate to advertise during the crisis. What does this mean for your hotel? The post-pandemic guest is looking for balance in the way your property communicates. More communication is definitely preferred – guests want to hear from your hotel regarding availability, safety protocols, and opening/closing restrictions. This guest wants your property to acknowledge the severity of the crisis and to show how your team is taking every precaution to stay open to travelers responsibly. This guest is open-minded when it comes to marketing messages; they won’t punish your property for continuing to run promotions, so long as you demonstrate you’re putting the guest’s needs first and foremost. On social media especially, your marketing team must strike the right balance between promotion and precaution.   Building the Digital Experience Before the pandemic, guests interacted with a hotel brand primarily through the physical experience (e.g., how comfortable was the bed?) and the service experience (e.g., how easy was the check-in process?). Now, there’s a third layer through which the hotel will leave an impression with a guest: the digital experience. All three pillars will be important to meeting the needs of the post-pandemic traveler, but hotels are currently least equipped to capitalize on the digital experience. The digital experience incorporates technology and online platforms to meet guest needs virtually – before, during and after their stay. The digital experience is the primary way to make a post-pandemic guest feel seen, heard, and cared for by the hotel’s physical and service experiences. Here’s what this means in practice.   Drive Revenue by Prioritizing Guest Safety Integrating this digital experience with a property’s amenities and service offerings is key to driving revenue. For a general manager, winning the guest of the future starts by clearly following global health and safety standard operating procedures – and communicating these measures as transparently as possible using social media and email to win guest trust. Digital tools can simultaneously reduce variable costs at the property while meeting guest demand for social distancing measures. In your operations, implement touchless check-in and contactless room-service for your F&B team. Shut down buffet-style dining options and add healthy meals to your menu. Augment the service experience with immunity-boosting in-room snack options. And, evolve the physical experience by creating a safe in-room experience and offering a digital concierge. These measures both personalize the guest experience and drive revenue by supplying amenities that guests actually want. Sales and marketing teams should focus their effort on improving your hotel’s reputation using guest feedback. This team must communicate what is being done to improve safety at your property as well as to promote user-generated content, providing social “proof” that your hotel is being honest and transparent in its effort to keep guests safe. Harness positive customer reviews to win trust with travelers by showing, rather than telling. Make sure you’re regularly updating your social media profiles, OTA listings, and website with all precautions your property is taking. Finally, revenue managers will play an outsized role in attracting new travelers following the pandemic. New data from RateGain shows how the market has become much more dynamic since COVID-19 started:  A hotel changes its room rates 5x per day 60% of users seek to access content via mobile 45% of activities can be automated using technology That technology can lead to 50% cost savings 26% of work is accomplished outside traditional work hours What do these numbers mean for revenue managers? The digital experience isn’t just for guests: revenue managers need a reliable rate intelligence platform that can integrate with your existing Revenue Management system to optimize rate shopping and monitor real-time rate changes, improving your price strategy accordingly. You also must be able to capture mobile-first guests – otherwise, you’re missing a massive competitive advantage.   Three Ingredients to Attracting Post-COVID Travelers It’s hard to know when the pandemic will be over, but it’s possible to start pivoting your hotel’s operations and outreach to be prepared for that inevitable eventuality. The new guest will expect to have consistent, positive service, physical and digital experiences with your hotel. Focus now on three key investments which will help your hotel win more bookings from post-pandemic travelers:  Cognitive revenue management: how can a digital revenue management tool help you optimize pricing in a dynamic market? Can you improve competitive intelligence and use booking data to show the guest you know and anticipate their needs? Smart distribution: how can your brand partner a channel manager to simplify room distribution? How can you improve discovery with OTAs and other new channels? Targeted social media: how is your brand listening to customers on Facebook and other platforms? How are you sharing your safety measures transparently? How can you build your brand reputation using customer reviews and other user-generated content?  By focusing on the digital experience, your hotel can drive revenue and increase brand trust with the first post-pandemic travelers.  

What is Average Daily Rate (ADR)? How is it Used in the Hotel Industry?

by
Hotel Tech Report
2 months ago

RevPar may be the hotel industry's favorite KPI (see: What’s RevPar?) but ADR (average daily rate) is a close second! And the truth is that they are closely intertwined. So, even if you are still confused about the jumbled terminology of hotel revenue management, we're here to sort you out! By the end of this article, you'll understand how to calculate ADR and how to interpret and influence it in your hotel’s revenue management strategy.  Average daily rate metrics aim to help business owners understand the average price rooms are being sold for in isolation.  By pulling metrics apart we are better able to identify problems and opportunities to forge stronger revenue strategies.   What is ADR? (Average Daily Rate) ADR stands for average daily rate and is widely used in the lodging industry as the best indicator for hotel room rate quality since total revenue metrics can be obscured by other factors like ancillaries or food and beverage. For real estate businesses and specifically hotel operators with perishable inventory, pricing strategies can make or break profitability.  The formula for ADR is simple - just divide the total rooms revenue at your hotel by the total occupied rooms.  So if you have $10,000 in rooms revenue and 100 rooms sold, your ADR is $100.  The "A" in ADR stands for "average" because you'll usually be looking at YTD (year to date) or TTM (trailing twelve months) averages.  You can really use this metric for any given time period but you'll need to make sure key performance indicators are always being compared apples to apples for a time perspective.  It's a common mistake to divide rooms revenue by total number of rooms - this methodology can lead to artificially deflated RevPAR since it accounts for unoccupied and complimentary rooms. ADR= Room Revenue/Occupied Rooms ADR shows hospitality industry revenue managers how well they are doing at maintaining the pricing strength of their properties. An ADR that's trending upwards or downwards can be a worrisome sign or it can be the result of a clear revenue management strategy. Evaluated on its own and out of context, ADR doesn't tell the full picture of a property’s performance.  Context comes from using ADR as a performance benchmark for comparing one hotel against another.  Hotel revenue manager will create a “competitive set,” made up of hotels that attract similar types of guests, and then track the performance of the individual property compared to the comp set. If your hotel’s ADR is higher than other properties in your compset, it may have resulted in fewer bookings (i.e. lower occupancy) because you are less price competitive than other hotels all else equal. In other words, when a traveler compares your hotel to similar hotels, the lower rate will entice them to book with a competitor. Generally, this is a bad thing; you want your hotel to be competitively priced so you don’t lose bookings! In general, lower rates will result in higher occupancy and higher rates will result in lower occupancy. However, this is a bit simplistic, as we’ll cover in the next section on tactics to influence ADR. Generally speaking there is no such thing as "good ADR" in isolation because you'll also need to consider and compare occupancy with historical results and the compset to see how your property is doing.   ADR is a component of RevPar Alongside occupancy rate, a property's ADR impacts RevPar (or revenue per available room), a key industry metric that tracks interactions between a hotel’s ADR and its occupancy rate. Hoteliers love RevPar because it shows how well they’re doing relative to similar hotels when adjusting for the number of available rooms. It's also a helpful revenue management signpost, showing how well a hotel generates revenue from its rooms.  To boost RevPAR, you can increase ADR and/or occupancy; a higher ADR and occupancy rate means more revenue per available room. However, as we mentioned already, there’s a breaking point where a higher rate reduces demand.  In general, you increase your rates too much, your occupancy will go down. This can actually be a net positive for revenue, as long as you’re increasing your rate enough to account for the lost occupancy. But it can also cause a dip in occupancy that can’t be made up with higher rates.  For example, let’s say you decide to push your RevPar up by increasing ADR from $120 to $140. The occupancy at your 100-room hotel goes from 60% to 50%, which means your RevPar goes from $75 to $70. But now you are servicing 10 fewer rooms, which can save you money on the operations side. And, you can then target guests at that $140 rate and rebuild your occupancy. If the initiative succeeds, your RevPar ends up at $84 ($140 ADR*60% occupancy). Win! The effect of increasing or lowering prices on reducing or increasing demand is known as the price elasticity of demand. Thankfully, price isn’t the only thing that affects hotel revenue. Factors such as geography, traveler demographics (income, etc), hotel category and macroeconomic trends also affect the relationship between rate changes and occupancy.  Sometimes, a higher ADR results in more bookings and a higher RevPAR. Like during periods of high demand, when inventory is constrained in the local market and consumers are far less price-sensitive. Or, as we saw in our example, a hotel can take steps to position itself as a more premium brand to increase ADR  without necessarily decreasing occupancy. The complex dynamics and interplay between pricing and demand is the cornerstone of revenue management.   Tactics: How to Influence Hotel ADR ADR is a fairly straightforward hotel performance metric: to increase it, raise your rates! However, as we saw above it's important to consider the impact of rate increases on your hotel’s overall revenue potential. Blindly increasing rates to boost your ADR can reduce occupancy and thus revenues. On the other hand, strategically increasing rates can actually lead to more revenue! It's a bit counterintuitive but it's true.   Tactic #1: Brand Marketing Thus the top tactic to influence your hotel’s ADR is to focus on brand marketing. There are three reasons why investing in premium brand positioning can be the most rewarding tactic in the long-term: You can command higher rates. If your brand is perceived as premium,  You can set your right tire without risking occupancy dips. In some cases, higher rates of loan can make your brand seem more premium! Pricing psychology is a funny thing! Loyalty is more profitable. If your brand fosters strong loyalty with past guests, you’ll rely less on public discounting and promotions. Rather, you can market directly to past guests and offer exclusive discounts and promotions that don't require you to pay commissions. You'll also notice that strong loyalty supports strong price position, as you won't have to publicly discount rates to generate business. Self-reinforcing cycle. As you build your book of higher-end guests, your premium positioning will build on itself. A strong brand also acts as a buffer to any downward pressures. That way,  if you have had ones, your brand is already well-positioned in the eyes of consumers and won't necessarily have to resort quickly to blanket discounts.   Tactic #2: Segmentation Another way to influence ADR is to segment your marketing so that you are better matching message to each audience. By segmenting in this way, you’ll be able to yield higher rates because you’ll speak more directly to each guest segment.  The best example of this is with targeting past guests with loyalty marketing. These guests already know you’re property -- and hopefully love it! That means they are not just more likely to book direct but also less price-sensitive overall. These guests aren’t just looking for deals, they’re looking for predictable and familiar experiences that fulfill their expectations. In general, capturing more revenue from past guests also lowers your distribution costs and increases your net ADR (see next tactic).  Since segmentation allows you to have different messages for different audiences, you can also section off certain cohorts for a more premium offer while keeping discounts focused elsewhere.  One lever to achieve this price-based segmentation is to leverage the power of package promotions. The benefit of packages is that you’re able to hide the actual rate of the room within the broader package. This is a fantastic tool to boost ADR, as you can create “value-added” packages that don’t actually cost you much more to deliver, such as a complimentary welcome drink or meals included. Once you subtract the true cost of delivering these add-ons, you’ll be left with a healthier ADR.   Tactic #3: Distribution Costs All revenue is not created equal. Each channel that sells your hotel rooms has its own associated costs. So one approach is to focus on Net ADR, or the amount of money that your hotel keeps after paying all distribution costs for each booking. While this won’t be a metric you can use for benchmarking against your compset, its great for internal tracking of how profitable your distribution strategy is. By optimizing your channels, you reduce commission costs and increase net revenue. This will have a direct impact on profitability. And it will also make you more competitive in the marketplace; since you are securing bookings more profitably, you’ll have more pricing power when it comes to setting your rates against your competitors!   Tactic #4: Upsells and Rate Restrictions Another path to higher ADR is to sell more to upcoming reservations and current guests. By convincing guests to upgrade to a higher category of room, you’ll increase your ADR without having to increase the public rates. This avoids the occupancy issues of increasing your public rates and keeps your hotel competitive in the marketplace. When setting up your automated upselling initiative, consider doing more than just upgrades to bigger rooms. Can you create a package that offers exclusive access to amenities or some sort of upgraded experience beyond a bigger room? These are often seen as more valuable by guests, who then are willing to pay a bigger price premium than you may get from category upgrades alone. Rate restrictions are also a powerful tool, especially non-cancellable rates. Since guests aren’t able to cancel the booking, you can offer a better rate. This appeals to value-minded guests and reduces annoying last-minute cancellations, which can wreak havoc on yields. Length of stay is also another rate restriction to experiment with. Try different LOS requirements, such as a Friday/Saturday night stay, to better yield longer stays. While encouraging longer stays may not necessarily increase ADR (last-minute and weekend bookings are usually more expensive), it can help you maintain occupancy and keep supply low enough to merit higher ADRs.  

What is an Occupancy Rate? Real Estate's Core KPI Explained

by
Hotel Tech Report
2 months ago

Percent occupancy is a key concept and KPI used in real estate businesses as a that shows how much available space there is in a building relative to space that is leased or rented. Simple, right? Wrong.  Occupancy rate has a ton of nuance and is massively important to real estate businesses so the broader concept requires a fundamental understanding of what occupancy says about a property, how to compare it to other businesses and how it ties to other metrics like length of stay, RevPAR, ADR, NOI (net operating income) and cash flows. In this article we'll dive into hotels occupancy rate but the concepts we cover are very similar across other real estate businesses like apartments, vacation rental units, retail and office buildings.  Occupancy is one of the most important metrics for revenue management teams to track. Many travelers have been shocked to see that despite up to 90% drops in occupancy due to the coronavirus pandemic, rates haven't fallen nearly as much.  In this article we'll start to explore why that might be and more. If you’re new to the hotel industry or looking for a refresher on some common metrics, you may be wondering: what is an occupancy rate? Why is occupancy rate important to hotels? In this article, we’ll explain exactly what the occupancy rate represents, how to calculate it, and why it’s a crucial part of measuring hotel performance. By the end of the article, you’ll be able to calculate occupancy rates (and RevPAR!) and think about the ideal occupancy rate for your hotel.   What is the Definition of Occupancy Rate? (+Formula) In the hotel industry, the occupancy rate represents the share of occupied rooms during a certain time period. Occupancy Rate is usually expressed as a percentage. Occupancy Rate (%) = Number of Booked Rooms / Total Number of Rooms Let’s look at an example: If Hotel A has 83 rooms, and 70 of them are booked tonight, then tonight’s occupancy rate is 84%. Hotel A’s Occupancy Rate = 70 / 83 = 0.84337, or 83% You can calculate occupancy rate for any time period by dividing the total number of booked rooms in that period by the total number of available rooms in that period. If some rooms at your hotel are out of order (for maintenance, renovation, etc.), it’s customary to subtract those rooms from the “total number of rooms” to maintain a more favorable occupancy rate. Fun fact: In the airline industry, the “occupancy rate” of an airplane is called “load factor.”   What is a Good Occupancy Rate for Hotels? If you think about a good occupancy rate for hotels, the logical answer is 100%. Of course, you would think every hotelier wants their hotel to be completely full every night. But a 100% occupancy rate may in fact not be the most profitable way to run your hotel. For many hotels, an ideal occupancy rate is between 70% and 95% - though the sweet spot depends on the number of rooms, location, type of hotel, target guests, and more. If you’ve booked every room, you might have left money on the table by not selling higher rates, and your costs can increase when every room is booked. The ideal occupancy rate for your hotel is one that allows you to maximize revenues and minimize costs. Luxury hotels will also want to deliver exceptional service to every guest, a task which becomes more difficult as the number of guests rises. For example, if your hotel is selling out every day - with reservations booked well in advance - there’s probably an opportunity to increase your rates. Of course, you’ll likely have a few sold-out nights here and there, like during holiday periods or special events, but if your hotel has 100% occupancy every night, then there is enough demand to support a rate increase. Besides the revenue component, a 100% occupancy rate can mean an increase in costs. If you have 95 rooms, for example, and each housekeeper can clean 10 rooms per day, it may be in your best interest to book up to 90 rooms each night so you don’t need to hire an additional housekeeper. Or perhaps a guest isn’t happy with their room; with a full house, you would have no alternate room to offer the guest, so you might need to offer a discount or another type of service recovery.   How Do Hotels Increase Occupancy Rate? Many hotels, however, don’t struggle with a 100% occupancy rate every night. Many hotels actively try to increase occupancy, since a high occupancy rate comes with many benefits - compared to a low occupancy rate, that is. When your hotel has higher occupancy, you have more guests in-house, which means potential for higher revenues at your F&B outlets, spa, shops, or other outlets, plus a greater opportunity to spread awareness of your brand and build guest loyalty. In order to increase your occupancy rate, your hotel needs to book more reservations and room nights. A hotel can increase the number of reservations - and therefore, occupancy - through several tactics: Selling lower rates (especially through promotions and discounts) Offering incentives for longer stays Running marketing campaigns Partnering with online travel agencies (OTAs) and travel agents Targeting specific types of guests who stay longer Discouraging cancellations by selling non-refundable rates If your hotel is trying to increase occupancy but still not hitting the 90% range, remember that globally, the average occupancy rates for hotels range from 65% to 80%.   Why Do Hotels Track Occupancy Rate? Occupancy is a great benchmark to assess a hotel’s position against its competitors and its own historical data. Knowing how your hotel is doing compared to other hotels in the market and previous years can help you set rates, predict stay patterns, schedule staff, and plan renovations or maintenance. If you know a certain weekend will have high occupancy, based on your historical data, then you can schedule enough staff and not plan a renovation over those dates. Hotel owners and operators often set occupancy rate, ADR, and RevPAR goals, so occupancy rate is a major component in measuring the hotel’s overall performance. Occupancy rates can therefore impact future capital expenditures, employee salaries and bonuses and brand relationships. Occupancy rates vary dramatically by market segment based on number of units or chainscale and even for different types of hotel rooms within the same hotel.   What is the Relationship Between Occupancy Rate and RevPAR? RevPAR, or Revenue Per Available Room, is a metric that takes into account both occupancy rate and ADR (Average Daily Rate). RevPAR is like a weighted version of ADR; it distributes the ADR equally across all available rooms - not just the booked ones. Like occupancy rate itself, RevPAR is used as a performance metric to determine how a hotel is performing. RevPAR is expressed in currency units, just like ADR. RevPAR is calculated by multiplying ADR by the occupancy rate. ADR is simply the average room rate booked for a given date or time period. RevPAR = ADR x Occupancy Rate Let’s say Hotel A’s ADR was $98 on the night when occupancy was 84%. Hotel A’s RevPAR is then $82.32. Hotel A’s RevPAR = $98 x 0.84 = $82.32 Overall, occupancy rate is a key indicator of a hotel’s historical, real-time, and future performance. Many stakeholders - from owners to housekeeping staff - use occupancy rate to shape their decisions. Did we miss any tips or tricks related to occupancy rate? Let us know!  

How to Use the Homeaway Revenue Tool (MarketMaker)

by
Adrienne Fors
3 months ago

Looking for opportunities to boost your vacation rental’s revenue? Your daily rates might be a good place to start.  A great way to maximize your opportunity for revenue and bookings is to implement a dynamic pricing strategy, which means setting unique rates for each individual day - based on market demand, competitor supply, and your own historical data. If your prices don’t adapt to changing market conditions, you could be leaving money on the table. For property owners and managers who use Vrbo, the MarketMaker tool can be a solid addition to your pricing strategy and vacation rental marketing toolbox. In this article, we’ll explain exactly what MarketMaker does and how you can use it to optimize your Vrbo listings.   What is MarketMaker? Homeaway's Revenue Tool Explained (now Vrbo) MarketMaker is Vrbo’s revenue management and competitor research tool. It’s available to all Vrbo hosts in the Owner Dashboard. MarketMaker is free of charge. To access MarketMaker, simply log into your property dashboard and select “MarketMaker” from the menu on the left side of the page. The tool itself compares your property’s current rates and occupancy with the average rates and occupancy in your market or competitive set. A competitive set is simply a group of similar properties that Vrbo’s algorithm has chosen. This comparison helps you determine whether your rates are too high or too low and if you are capturing your fair share of bookings. If your property has lower occupancy than the market average, for example, that could be a signal that you have an opportunity to increase bookings.   What information does MarketMaker show? When you first open MarketMaker, you’ll see your properties at a glance. You can quickly notice each property’s average daily rate compared to the competitive set or market as well as occupancy percentage compared to the same competitive set or market. The data is from a time range selected on the top of the page: 30, 60, 90, or 180 days, or a custom range.     By default, all of the properties in your account will show, but you can also search for a specific property or apply filters, like number of bedrooms or location, to show a subset of your listings. Next, we can drill down on one property in particular. By clicking the number of “opportunities” or the arrow on the far right of a given property’s row, we can see rates for that property on specific dates. These dates show rate recommendations that Vrbo suggests based on competitive set data. Vrbo can recommend higher or lower rates, whatever the algorithm determines your property needs to maximize the opportunity for bookings.     When you click on the property’s name in the “Property” column, you can explore MarketMaker’s graph view. The graph looks overwhelming at first, so let’s explain exactly what you’re seeing.     The graph contains data for one of your properties and that property’s market or competitive set. On the top, you can see the calendar, your current rates, and whether your property is available (white), booked on Vrbo (green), or unavailable for another reason (gray). In the graph, you’ll see a few lines, which you can toggle to show or hide: Blue line: Your current rate Green rate: Average rate of properties in your market/competitive set which have been booked on Vrbo Gray line: Average rate of properties which remain available on Vrbo Yellow line: Number of searches for your market on Vrbo The graph also contains two stacked bars: Light gray bar: Current occupancy of properties in your market, based on Vrbo data Turquoise bar (above the gray bar): Forecasted occupancy of properties in your market, based on Vrbo’s historical data, seasonality, and trends When you hover over one date on the graph, you’ll see the actual data points that correspond to each line and bar.   How do you use MarketMaker? You can use MarketMaker in two ways: to make targeted rate adjustments and to gain a better understanding of market trends. MarketMaker offers rate recommendations when its algorithm detects a gap between your current rates and the market’s occupancy or rate trends. These rate recommendations can be found in the “opportunities” section. While looking at either the portfolio (list) or graph view, you may notice properties with “opportunities.” On the graph, the “opportunities” will be shown in blue just above the calendar row.      Using MarketMaker’s recommendations, you can adjust your rates up or down - in line with market demand and trends - without needing to do all the research to come up with those recommendations on your own. The other way to use MarketMaker is to study market behavior. The graph view displays some great data about market demand in terms of search volume, and you can also get a sense of your competitive set or market’s occupancy trends. These findings can help you determine high and low demand dates so you can adapt your own strategies - both on Vrbo and on other channels - to capture as much demand as possible. Knowing which dates are in high demand can lead you to change not only your prices, but also your minimum stay requirements, fees, and content to be most competitive.   What are MarketMaker’s limitations? While MarketMaker certainly presents some compelling information, it has one major limitation: the data is pulled only from Vrbo, and the changes you make to your rates will apply only to your Vrbo listing. For hosts who list properties on Vrbo only, that’s totally fine, but many hosts use additional booking channels besides Vrbo. In some markets, Vrbo represents just a small slice of all searches and bookings, so we recommend that you take the data with a grain of salt.  Another limitation of MarketMaker is that it requires manual input. You can only make use of MarketMaker’s rate recommendations by acknowledging each recommendation manually, and if you have several properties, the time needed to click through these recommendations and stay up-to-date can add up quickly. Airbnb’s Smart Pricing tool offers similar rate intelligence functionality, but it’s fully automated. Property owners and managers who use third-party dynamic pricing tools, such as PriceLabs or Wheelhouse, spend much less time adjusting rates, since these tools also adjust rates automatically. However, some hosts may prefer to stay in full control of rate adjustments, so the manual nature of MarketMaker could be a benefit. Overall, MarketMaker is a nice addition to the Vrbo host dashboard, but it’s important to remember its limitations. MarketMaker can provide several benefits to property owners or managers who use Vrbo exclusively, but for hosts with larger portfolios or listings on multiple sites, the manual work needed to apply its recommendations is simply too big of an undertaking. The market data, however, can be beneficial for any host, especially to show search volume on high and low demand dates. Have you used Vrbo’s MarketMaker? We’d love to hear about your experience with this tool!  

What Is RevPAR? Breaking Down the Hotel Industry's Favorite Metric

by
Hotel Tech Report
1 month ago

Anybody who's worked in the hospitality industry knows that we are prone to confusing terminology. Terms like CPOR, ADR, GSS, NOI, GOPPAR leaves hotel students dizzy studying for final exams.  There's good news though, by the end of this article RevPAR will be a breeze. RevPAR is the queen of all hotel management KPIs (key performance indicators) because it helps us compare different hotels apples to apples.  If your hotel's occupancy is higher than the next property in your compset it may be because your rates were too low and vice versa.  RevPAR or revenue per available room helps us understand performance by combining both occupancy and ADR (average daily rate). Hoteliers love using RevPaR because it helps us understand in a single metric how we're doing relative to similar hotels when adjusting for number of rooms.  When RevPAR is growing our hotel revenue is increasing; however, a rise in average room rate may actually not increase revenue if occupancy has fallen In this article we'll show you how to calculate and interpret RevPAR with ease and this article is designed for both industry veterans and those who are newer to the hotel industry.   What is RevPAR? (Revenue Per Available Room) RevPAR is a straightforward hotel performance metric that tracks how much money a hotel is making on its rooms. It’s correlated directly with a hotel’s Average Daily Rate (ADR) and its Occupancy Rate.  For a given period, you can calculate hotel RevPar using these RevPAR formulas: RevPAR = ADR x Occupancy Rate OR RevPAR = Total Rooms Revenue /  Total Rooms Available During Period To influence RevPAR, you can increase ADR and/or occupancy. In general, a higher ADR and occupancy rate means more revenue per available room. There’s a limit, however. At some point, the higher rate will reduce demand and push occupancy down.  The way consumers respond to pricing is known as the price elasticity of demand. Hotel prices are fairly elastic, which means there are other factors that influence hotel demand curves: Income, geography, macro employment levels and hotel category also shape how rate changes occupancy rate (and thus RevPar).  In other words, it's complicated. Sometimes, a higher ADR results in more bookings and a higher RevPAR. Like during periods of high demand, when inventory is constrained in the local market and consumers are far less price-sensitive. Luxury hotels also have more pricing power than budget hotels.  Even within luxury different types of hotels will command different rates based on attributes like amenities and reviews.  Similarly branded properties (all else equal) typically command higher RevPAR than independent boutique hotels (assuming it's with a strong brand). To see how this plays out, let's consider a scenario. You’re the revenue manager at a four-star hotel in New York City. Business has been slow and so you're considering dropping your rates to increase occupancy. Your RevPar for the same period last year was $280 ($350 ADR * 80% occupancy) but you’ve been running 20% under year-over-year occupancy for the past 6 weeks. Your forecast for the next month shows a RevPar of $180 ($300 ADR * 60% occupancy).  To close this revenue gap, you decide to drop your average rates to $250. Over the next week, bookings accelerate and forecasted occupancy goes up to 70%, which means RevPar is now $175 ($250 * 70%).  Wait, what?  Yep, you dropped your prices and now you're actually making a bit less money per available room than you were before. This might not seem like a big deal; more revenue is good, right? Wrong. You need to keep profitability in mind so that you don't drop rates to increase occupancy...and actually make less money because it costs a fixed amount of money to service each additional room. As you can see, revenue management strategy is complex; you need to make sure that pricing decisions don’t inadvertently affect overall profitability. RevPar is one data point within a broader analysis. You must have a broad base from which to gather real, accurate insights on your hotel’s performance -- and which revenue strategy works best for a given period of time and for specific business goals.   RevPAR Variants: NRevPAR and TRevPAR To get more nuance from RevPar as a core hotel metric, consider its siblings: Net Revenue Per Available Room (NRevPar) and Total Revenue Per Available Room (TRevPar). These variations can help you maintain an accurate and useful analysis of your current revenue strategy.   NRevPAR  This metric is total room revenue minus the cost of distribution. Here’s how to calculate a hotel’s NRevPar: NRevPar = (Total Rooms Revenue - Related Distribution Costs) / Total Rooms Available This metric could be calculated for a specific time period, channel or segment. For instance, you could track your net revenue from OTAs and then compare it to direct bookings. This is a helpful comparison, as direct bookings also have a distribution cost. From the technology required to handle direct bookings to performance marketing and other demands generation efforts, direct booking certainly isn’t free.  NRevPar aligns revenue, marketing and management around profitable distribution. All things equal (such as demand and caliber of guest), inventory should be allocated to the lowest-cost channels first and then onwards based on the overall cost of each booking.   TRevPAR  Many hotels aren't just places to sleep; guests can eat in a restaurant, enjoy happy hour at the bar, relax at the spa or book a tour at the concierge. To get a more accurate picture of the hotel’s overall performance, use TRevPAR, which is the total revenue per available room.  Here’s how to calculate TRevPAR: TRevPAR = Total Revenue During a Period / Total Rooms Available You can use this metric to see how well you were doing at generator incremental revenue from food and beverage and other on-site amenities. The higher the number, the more money you are capturing from each guest. And if TRevPAR is trending lower, it's time to do a deep dive and investigate the root cause.   Tactics: How to Influence Your Hotel’s RevPAR There are two ways to increase your hotel’s RevPAR: Increase your room rates (higher ADR) or put more heads in beds (higher occupancy %). As we saw earlier, there's a delicate balance at play. If you increase your rates too much, you risk lower occupancy. If you focus on occupancy only, you'll likely need to lower your rates. Here are some tactics to help you maintain this balance. Ultimately the top way to improve RevPAR is by utilizing a revenue management system like BEONPRICE which can help you price rooms more efficiently and maximize the balance between occupancy and average daily rate.   Tactic 1: Increase ADR (Average Daily Rate) You don't necessarily need to remodel your hotel operation to increase ADR, even minor (yet targeted) improvements to the guest experience can boost online review scores which help prospective guests justify paying more for your rooms relative to the competition. Optimize your channel mix. Frequent data-driven channel optimization is a great way to boost ADR. Make it a habit to compare your average rates across your major booking channels so that you can focus on higher rate channels first. This comparison not only includes your OTAs and metasearch but also direct bookings. Use that comprehensive benchmark of channel performance to prioritize channels that deliver a higher ADR. For instance, if metasearch is performing well, you may want to reallocate Facebook ad budget to TripAdvisor.  Upsell more. Are you doing enough to maximize revenue from every booking that you earn? Effective upselling is one of the most straightforward and impactful ways to increase average rates. Among the most effective upsell techniques is email marketing, which can be automated to send pre-arrival emails that entice guests to upgrade their experience. Each upgrade, whether sold prior to arrival or at the front desk, pushes your ADR up.   Tactic 2: Increase Occupancy Adapt to demand. It's pretty easy to increase your rates when your market is busy. It's during those slow periods where you may want to focus more on your occupancy rate. Talk to your OTA market managers about running promotions. Build outreach campaigns targeted to specific segments, such as groups and corporates, that can efficiently fill rooms. Also, be sure to let automation amplify your efforts: revenue management systems like BEONPRICE will automatically make pricing decisions based on real-time market- and property-level data. Your prices will be based on the latest data and you can make adjustments as needed Market to loyal guests. Your most loyal guests can bring your occupancy up (and are often less price-sensitive than a transient guest from an OTA). Nurture these relationships over time so that you stay top-of-mind. Then, when you’re looking at a less-than-desirable forecast, create a promotion for past guests. By focusing on this segment, you can put heads in beds without resorting to discounts on third-party channels.  

Hospitality Innovation is Thriving Despite the Crisis (Q2 Innovation Report)

by
Jordan Hollander
2 months ago

Innovation is alive and well in hospitality. Don't believe us? Check out the 47 new hospitality innovations that we cover in this report.  In the age of coronavirus we all catch ourselves thinking that the world is coming to an end from time to time. Don't worry, this article has nothing to do with coronavirus (but it's hard not to address the elephant in the room these days). In order to keep this article COVID free, let's run a scenario analysis using Hotel Tech Report's Innovation Wager™.  The wager considers four alternate universes based on two axes.  On our X axis we consider two worlds: Scenario A considers optimal decision making if the hotel industry does not recover, Scenario B considers what to do if you believe that it will. On our Y axis we consider what happens if we improve the way we do business with new technology and processes.  The wager shows us that in any potential outcome, it's always in our interest to improve the way we operate our businesses.  The only unacceptable outcome is the one where the world does not come to an end and we do not improve our tech and hotel operations processes.   So the next question is how did we choose our Y axis (i.e. update my hotel's tech and operations)?  The math is simple, if your hotel group's breakeven is at 25-30% occupancy and you're currently running at 0% you are essentially racing against time to hit that occupancy.  Global travel demand is unfortunately out of your control, so what can you do to get there as quickly as possible? You can improve your margins to lower your breakeven occupancy by getting more efficient at your property.  For this you may explore technology like keyless entry or staff collaboration tools to help your slimmed down team do more with less.  You can sell long term group business today to bring deposit revenue in ahead of those bookings and for that you'll need airtight sales tech and processes.  You could also get more efficient at acquiring guests to hit that 25-30% occupancy rate faster. In this article, we showcase 47 hospitality innovations that have been launched in the crisis.  As you explore ways to improve your margins, get smarter at guest acquisition and more - this list can put you on the cutting edge.  We've divided the article into five categories: Revenue Management Innovations Marketing Innovations Operational Innovations Guest Experience Innovations Sales and Meetings Innovations     BONUS: Look for the contactless badge next to products in the innovation report to identify technologies that will help your hotel go contactless, boost your recovery efforts and prepare now for the inevitable changes that are coming.  The tools have functionality that will enable you limit human physical contact to pre-emptively prepare for new government regulations and even more importantly, guest expectations.   Q2 Innovations in Revenue Management   1. OTA Insight Market Insight Tool OTA Insight’s Market Insight tool offers a smarter way to predict demand and price your rooms accordingly. Market Insight gathers and analyzes data from hotel web searches, flight data, events, holidays, online reviews, weather forecasts, and alternative lodging inventory to give your revenue team location-specific insights segmented into different customer groups. Learn more about your target guest’s booking intent and use real-time market trends to capitalize on revenue opportunities before your competition. 2. SiteMinder Insights SiteMinder Insights allows hotels to be smarter about their sales and marketing strategies while maintaining their brand integrity. This tool has monitoring and reporting capabilities that provide hoteliers a single place to access clear and actionable data on their local market, business performance and guests. This integration can help hoteliers make more informed decisions about hotel pricing and distribution, based on impartial data, as well as reveal insights that help get ahead of the competition. 3. Infor Price Optimizator Infor Hospitality Price Optimizer (HPO) is a mobile-first app that helps hotels price their rooms in a more accurate and timely manner. The algorithms that drive the app replicate the approach the guest takes to book a room: the system data from star ratings, location, pricing, and reviews to select which hotels are the valid competitors that should influence the pricing decision. he system automatically detects seasons and events for a dynamic pricing solution that updates throughout the day as needed.   4. HotelIQ Monthly Forecasting HotelIQ has been working on a Monthly Forecasting & Budgeting Tool that can generate forecasts and budgets for up to 12 months at a time. The platform pulls your real-time PMS data to use as a baseline, automating the burdensome task of maintaining spreadsheets and forecasting by hand. Easily edit figures, track performance, and generate market segment level forecasts and budgets.   5. IDeaS RevPlan IDeaS RevPlan is a total revenue forecasting, planning and enterprise consolidation tool. RevPlan can automate scientific forecasting, budgeting and financial submission for your entire property – from rooms to food & beverage and other income revenue streams. Save time and manual effort while driving greater profitability: RevPlan provides hotels the ability to forecast accurately and precisely.   6. RateGain MarketDRONE RateGain is launching MarketDRONE, a new feature for its rate intelligence platform OPTIMA. MarketDRONE tracks intra-day rates and rate-plan changes by hotels in real-time. Whenever a competitive hotel makes a rate change, your revenue manager receives an alert. Hotels are constantly changing rates for existing plans and introducing new rate plans close to check-in-date to sell off their unsold inventory and maximize revenue. As such, a revenue manager, on an average, may lose $1,000 or more per day by not acting on these intra-day market changes in real-time. With MarketDRONE, revenue managers do not have to pull out rate shopping reports on a daily basis to make the strategic decisions. The instant alerts provide them the market insights on the fly and basis that they can take the recommended actions on the go.   7. HotelTime Instant Reporting HotelTime Solutions is debuting Instant Reporting, a reporting and forecasting tool that helps revenue managers working at multi-location properties get a clear picture on their distribution. It aggregates data on key metrics across different properties. This tool makes it easy to get accurate reports, merging revenue center statistics at the chain level.   8. Hotelchamp Demand Tracker Hotelchamp’s new demand tracker will give revenue managers insight into how much demand there is predicted for future stay dates in their hotel. Set up automatic alerts to be notified when demand increases for a specific stay date. Get insights for a specific demand period to better predict trends in revenue.   9. HotelPartner Synergy Model HotelPartner’s synergy model is a new service offering for individual hoteliers that combines manpower, technology, and expertise in one package. The firm will offer a revenue management tool as well as the team to use it; the synergy model offers a blend of consulting, technology, and a revenue management solution tailored to your property.   10. 5stelle Business Intelligence 5stelle* is introducing a new business intelligence tool that provides 18 interactive dashboards. Get reporting on your reservation lead time, month-to-date revenue and occupancy, RevPAR analysis, and more all in one place.   11. Fairmas Advanced Revenue Planner Fairmas Advanced Revenue Planner simplifies the planning and controlling of all hotel revenues, either by market segment or by account line item, on a daily or monthly basis. The platform is built for different user groups – from department managers who need to plan on the operational level, to revenue managers for a detailed view of the total hotel, and to the general managers who can refer to its consolidated view. The  Pickup Planning feature allows a different way of planning that may be a more realistic approach depending on the day-to-day situation (e.g., How many more rooms do I still need to pick up to achieve my goal?).     Q2 Innovations in Hotel Marketing   12. Revinate Guest Data Platform Revinate’s Guest Data Platform is another take on consolidating guest information to deliver the insights hotel managers can use to drive direct bookings, provide a great guest experience, and increase profit. The Guest Data Platform combines guest data into rich, unified profiles that can inform your sales and marketing campaigns.   13. SHR Maverick CRM SHR Maverick™ CRM by Sceptre Hospitality Resources LLC is a new CRM system that unlocks information from third-party providers. This CRM shows your hotel data about customers no matter where they booked: direct, or through an OTA. Maverick gives hoteliers access to clean, consolidated guest data, including user behavior and booking habits. The platform includes a loyalty and rewards platform and integrates with Windsurfer CRS, Windsurfer CRO, Windsurfer IBE, and a built-in Campaign Management Platform.   14. D-EDGE CRM D-EDGE launched Guest Management, a CRM tool that integrates with the brand’s existing CRS product. Guest Management offers hoteliers a way to centralize data from your PMS, CRS, website, and other sources into one guest profile. By consolidating all data about each guest in one place, your team can more easily send specific, customized offers to guests, driving guest satisfaction and loyalty. 15. Dailypoint Content Bot The dailypoint Content Bot is a tool which pushes email communication finally to an individual experience with each guest. The bot pulls data from guest profiles in dailypoint to select content pieces from a library, offering individualized, concierge-style recommendations based on each individual’s unique needs. Content Bot allows your marketing team to get hyper-focused with messaging. Send a newsletter customized per person, rather than per target group.   16. Suiteness OTA Distribution Suiteness launched a partnership with Booking.com for travelers to book connecting hotel rooms and suites through Booking.com. When connecting rooms are available, they are booked 3.3x more often than multi-bedroom suites in the same hotel. Customer segments like families and groups are heading to AirBnB in droves because they demand more space and don’t want to risk showing up at your property only to find out they can’t get connecting rooms. Give them peace of mind and you’re more likely to win their booking.   17. RoomRacoon Integrated Upselling RoomRaccoon is developing an integrated upselling tool for its hotel management system.  This will allow clients of its HMS to offer add-ons like breakfast or room upgrades prior to arrival.  While there are quite a few standalone upselling tools on the market, RoomRaccoon is one of the first HMS players to offer this functionality.   18. AskSuite Booking Engine Chatbot AskSuite’s latest integration syncs your booking engine with their chatbot to recapture a guest who may be having trouble booking directly. For instance, if a traveler tries to book a room on an unavailable date, the chatbot will automatically respond with a message that there are no rooms available and suggest the next earliest date with availability. Or, the chatbot can be set up to suggest a nearby property from the same chain that does have availability. This integration helps your reservation team work more productively, captures more direct bookings, and standardizes customer service messaging on your site. Asksuite is also in the process of building a Smart Chat Distribution tool that can matches a reservation agent to an open chat, helping large reservation teams coordinate their responses to individual customers. Your property defines specific rules – using triggers such as language, communication channel, type of inquiry, and more – and the algorithm uses these qualifiers to send an open request to the right customer service representative. The goal is to improve your property’s customer service and make it easier for your team to work efficiently.   19. Profitroom WebAssistant Profitroom’s WebAssistant is a new tool for creating and maintaining your hotel website. The tool is built specifically for the hotel industry, with templates designed to set up booking pages that drive direct bookings as well as unlimited data transfer and automated free updates. This website builder is an option for hotel properties that do not have the budget to work with a digital marketing agency to set up their site.   20. Quicktext Lead Generation Quicktext’s chatbot aims to improve your sales cycle by generating new leads for your sales team. When a customer engages with this chatbot, the program checks your CRM to see if this user exists; if they do, the tool will add any missing contact details and customer interests as determined through the chat interaction. If this is a new customer, the bot will upload insights into your CRM that can be used by your sales and marketing team to send more personalized offers and marketing messages. The Quicktext bot interacts with 9% of online visitors each month; if you have 3,000 visitors every month, Quicktext will create 270 new leads to whom your team can market.   21. myhotelshop GmbH Link Travel Ads myhotelshop GmbH recently launched Link Travel Ads, a metasearch marketing platform for hotel chains, booking engines, and hotel marketing agencies. This tool is built specifically for properties that have struggled to run, manage and report metasearch marketing campaigns. Link Travel Ads will take you through the process from start to finish. With this tool, one account manager can manage campaigns for more than 500 different properties, with reporting and invoicing all in one place.   22. Experience Hotel Dedupe Experience Hotel, like D-EDGE, is trying to solve the problem many hotels have: multiple entries for the same guest. Hotel brands that have multiple properties with multiple data sources (the restaurant, spa, reservation system, etc.) tend to have duplicate profiles for the same guest in their PMS. Experience Hotel’s approach is Unified Customer Repository (UCR), a system that can identify all the duplicates in your guest list and combine every guest's details in one single profile. This allows your team to see an entire guest history in one place, and use insights from multiple sources to deliver personalized messages and offers.   Q2 Hotel Operations Innovations   23. hotelkit Facility Management Hotelkit debuted a new Facility Management platform that enables maintenance teams to  plan, schedule, and track corrective and preventive maintenance tasks. The tool help maintenance managers allocate resources such as time, money, and employees more effectively, and can automate and oversee daily maintenance routines. Get data and reporting on energy consumption or wear and tear of equipment to predict future expenses.   24. Mews Online Check-Out Mews Systems now offers an online check out feature aimed at reducing lines at the front desk and streamlining your property’s operations. Guests can checkout online without having to stand in a queue before departure; the platform sends housekeeping an alert once the guest has left, and your revenue managers can start upselling early check ins. Mews Online Checkout gives time back to guests and hoteliers alike with essential automation to guests who are in a hurry and hotels who are trying to turn around rooms.   25. HelloShift Inventory Management HelloShift is introducing Inventory Management to systemize the process of ordering and maintaining your stock of hotel supplies – parts, tools, equipment, linen, guest amenities, and more. Store detailed information about your supplies (warranty, brand, model, etc.), automate reordering, and reconcile inventory levels with regular checks. Reduce error that can lead to over and under-stocking, and reduce costs associated with ordering the wrong amount of supplies.   26. Bookboost Multi-Property Inbox Bookboost Guest Messaging added an all-in-one inbox with multi-property function that integrates messages from a number of channels into one inbox. Manage messages from your website, email, Facebook Messenger, Whatsapp, and more in one platform. This allows one team member to oversee one unified inbox – a big gain in efficiency, especially for multi-property hotels.   27. Sertifi eConfirmations Sertifi eConfirmations allows travel companies to send payment digitally to travel suppliers (e.g., your hotel). Receive corporate credit card payments, virtual card payments along with the corresponding payment instructions, and guest information, such as check-in time and room preference, all at once – quickly and securely. All payment data is tokenized and transferred in a PCI compliant manner. Offer a smooth, hassle-free payment experience for corporate travelers.   28. Beekeeper Task Management Beekeeper’s Whispr Partnership will help frontline workers learn their job duties more quickly and help add consistency to your operations. Whispr transmits “motivational audio messages”, as well as work instructions in your employee’s preferred language through Beekeeper’s operational communication platform. Facilitate communication between your housekeeping team and management in an innovative and authentic way.   29. Telkonet Ecoinput Telkonet introduces EcoInput, a simple way to save energy and reduce your costs. EcoInput turns any light switch into an energy management device. Using the Zigbee wireless protocol, lighting can be controlled locally – e.g., guests can use the light switch as normal – or remotely via software or mobile control. Add sustainability and energy savings to your property without sacrificing guest experience.   30. Hoxell Quality Operations Hoxell has a new tool called Quality Operations. With Quality Operations, members of your team can send messages, create and assign tasks, and digitize workflows to improve productivity. The platform aims to streamline housekeeping activities, create direct communication channels, and improve reporting by reducing friction in communication and knocking down siloed reporting structures.   31. Mister Booking Payment Automation Mister Booking’s Payment Automation feature offers a simple way to process payment from your Hotel Management System. All credit cards collected as guarantee from OTA or booking engine can be verified and pre-authorized directly from the PMS. Automate advanced payments for all non-cancellable and non-refundable reservations, according to their payment conditions. It will save your team time by automating the administrative burden of payment verification.   Q2 Guest Experience Innovations   32. Crave AppLess Mobile Crave unveiled AppLess™ Mobile, a tool that gives guests access to guest services through location-specific QR codes. Guests simply scan a QR code and choose from the services you offer. Create multiple custom QR codes and post them at different points throughout your property: for instance, a QR code for ordering drinks at the bar, a QR code for catering in a meeting room, a QR code for more towels by the pool. AppLess™ enables frictionless digital experiences for consumers to access services on their own devices, without the need to download a mobile app. Includes payment technologies such as Apple Pay and Google Pay.   33. SuitePad Premium Docking Station SuitePad has two new products to share, the SuitePad Premium Docking Station and the SuitePad 10" Tablet. The SuitPad 10 is a premium version of their previous model, featuring a 1920 x 1200px resolution screen, larger battery for longer use, and 2GB of RAM for smoother content delivery. The docking station includes new features such as a bluetooth speaker, in-room presence sensor, and telephone handset. These features increase your property’s ability to send offers to guests at the right moment, and provide a premium in-room technology experience.   34. Volara Google Interpreter Volara introduced Google Assistant Interpreter Mode for Hospitality, a partnership with Google that facilitates real-time conversations with guests through instant translation. The tool translates between 29 different languages to help your staff welcome guests from diverse language backgrounds. Improve the guest experience and solicit reviews in multiple languages with this quick and easy translation platform. 39. TrustYou On-Site QR Feedback TrustYou’s On-Site Solutions Beta is a new product that solicits feedback during the guest stay using a QR code or short URL. This survey tool proactively asks each guest about their stay, escalating any issues occurring at your hotel for immediate attention. One hotel property that tested this product was able to increase their post-stay review scores by 3.8 points by asking for feedback in real-time.   35. Travel Appeal Destination Report Travel Appeal’s On-demand Destination Reports are tailor made for independent and chain hotels, DMOs, and tour operators looking for deeper information about their territory. These reports are available for any city, region, or territory within a few days, and can be used to analyze visitor groups, sentiment scores, trends, competitors, online channels, seasonality, and more. Compare different time periods (up to three years back) and learn about the reputation of the destination, individual sectors (F&B, retail, experiences, and more), and what topics are most discussed in relation to your specific area. Know what to highlight in your marketing campaign and help your concierge team craft the perfect experience for your guests.   36. LoungUp WhatsApp Messaging LoungeUp debuted its new WhatsApp Messaging function, adding a new way to communicate with guests. Use this tool to initiate contact with each customer before they arrive over WhatsApp. Send guests a way to check-in in advance, pay their deposit, book a shuttle to the hotel, or offer an upgrade. Automate some of the time-consuming administrative process and offer real, conversational exchanges with guests. With 1.5 billion worldwide users per month (as of January, 2019) worldwide, WhatsApp is the number one messaging platform, ahead of Facebook Messenger (1.3), Wechat (1.1), Skype (0.3), Snapchat, Viber and Line.   37. Zaplox Mobile Check-in Zaplox Premium iterates on Zaplox’s original product with new mobile-check in and mobile key functionality. This app integrates with most leading PMS and lock systems to streamline check-in. The custom-branded app allows your property to connect with guests before, during, and after their stay. Guests can use the Zaplox app to check-in, preauthorize their credit card, and complete the guest registration before they arrive at the hotel. Includes mobile keys with integration with lock vendors ASSA ABLOY, dormakaba and SALTO systems as well as large PMS providers, such as Oracle, Agilysys, protel, StayNTouch, Maestro, and more.   38. MyStay Mobile Check-in MyStay Check-in Agent is a tablet-based software solution that can make your check-in process 100% digital at the front desk and anywhere at your hotel. The tablet scans guest documents, and then prompts the guest to add missing information, agree to house rules, and sign the check-in card. This increases the accuracy of your guest data, streamlines the check-in process, and allows your team to focus on the guest experience rather than data entry.     Q2 Sales & Group Travel Innovations   39. OPERA Sales & Event Management Oracle’s OPERA Sales and Event Management Cloud (OSEM) helps hotels reduce the extra time spent managing data entry related to events. OSEM provides a single view of all a hotel’s event booking details and revenue across rooms and event spaces for easier audit and analysis. Properties can increase their event revenue by optimizing inventory, bookings, streamlining logistics and providing smooth event logistics. The tool helps streamline operations, increase communication and cooperation across departments, and respond faster to customers.   40. Atomize Group Booking Pricing Module Atomize announced fresh updates to its Group Booking Pricing Module with a tool that helps revenue managers to instantly calculate the optimal rate for groups. This module now presents both the total recommended price and displaced transient revenue for the group, along with details such as prices per room type and date. A separate module introduces the ability to email yourself the group pricing recommendation for future reference.   41. MeetingPackage Analytics MeetingPackage has a new analytics extension for meetings and events bookings that allows you to advertise your meetings and events the same way you would advertise your hotel rooms. The analytics extension allows Google Analytics to track the full customer journey, capturing the total revenue of the meeting/event. Measure the booking process from the very first ad click until the event date, and make smarter marketing decisions on Google, Facebook, and LinkedIn to drive valuable direct traffic.   42. SABA Hospitality Digital Conference Tool SABA Hospitality’s SABA Conference is a digital conference tool that provides automatic answers to the questions and requests of conference hosts and attendees directly to their mobile devices. From conference information, directions and amenities, and information on the surrounding area, all information is easily accessible in multiple languages, and can be presented in any format (e.g. links, videos, text, maps and images). Users don’t need to download a thing, making it easier for conference organizers to ensure all relevant information is received by attendees. Hosts and property operators simply enter the relevant information, and the platform presents it in a branded and engaging way.   43. EVENTMACHINE Instant Quote EVENTMACHINE IQ Instant Quote automatically plans and quotes events based on a few simple inputs, like date or event type. Rather than tasking an event manager to manually select and calculate event spaces, catering and equipment. Eventmachine IQ can reduce that manual effort. Get instant, custom quotes emailed in a professional PDF proposal.   44. Get Into MoRe Strategy Dashboard Get Into MoRe has built a new Strategy Dashboard advises whether or not you should allow an inquiry to proceed with booking your events space. One small event could easily reserve a space and prevent a more profitable, large event. Strategy Dashboard uses a red light/green light system to tell you if an inquiry is worth accepting – or if you should hold out for another booking request.   45. THYNK Meetings Management THYNK has a new product, MYCE, a customer-centric meeting events and venue management system. The flexible, cloud-based system uses Salesforce to automate the sales process follow-up with task automation and two-way integration with your PMS, POS, and other applications. Assign tasks across departments and add the group booking module to make it easier to manage event bookings.   Q2 New Innovations in Food & Beverage   46. Bbot Smart Ordering System Bbot Smart Ordering system allows guests to order room service on their phone from their room without downloading an app or signing up for a new service and integrates with popular hotel PMS and POS systems.  Guests order and pay for food + drinks right from their room without having to call down, which means you save on labor and menu management.  Bbot recently rolled out new PMS integrations including Mews & Opera.                   47. Apicbase's Production Planning Tool Apicbase’s Production Planning tool streamlines kitchen operations at your property by making food production reliable and repeatable. Save money and reduce food waste by up to 30% with automated to-do lists, real-time inventory updates, and a function that allows your team to predict how many quantities will be needed at each meal. Prep only what you need and make the most of ingredients in your pantry to lower your food budget.  

Revenue Management Strategies: Tactical vs. Strategic

by
Hotel Tech Report
3 months ago

What does your vision of revenue management strategy of the future look like? Running advanced space tourism purchase promotions on Mars hotels or last-minute deals on spaceship cabins? Okay, maybe we can’t predict that far ahead, but we can help you overcome tough economic conditions and make the most of periods of uncertainty. If you’ve ever felt overwhelmed by everything you need to handle on a daily basis or frustrated that your hotel isn’t hitting its strategic goals, we’ll show you why shifting away from tactical revenue management is the key to success in the long term. This article will uncover why strategic revenue management is so important, and how by switching to a more strategic focus, you can reach your goals without relying on last-minute, reactive tactics. In light of the current COVID-19 crisis, we’ll look at lessons learned from the periods after 9/11 and the 2008 recession to help you work toward strong rates and occupancy in the future.   Evolving Strategies of Revenue Management Before we jump in the time machine, let’s explore the differences between strategic and tactical revenue management. What do the two terms mean? Can you have one without the other? Strategic revenue management, as you may have guessed, refers to your overall revenue management strategy. Strategy has a more long-term focus, and it involves a roadmap to reach a target. For example, your goal might be to increase ancillary revenue or shift share away from OTAs toward your direct channels, and your strategy outlines how you’ll get there. Tactical revenue management, on the other hand, refers to the specific actions you take. If your goal is to drive ancillary revenue, then tactics might include setting up packaged offers with F&B credits or sending email blasts that advertise your spa specials. For many revenue managers, tactics also include setting last-minute discounts or releasing rooms to opaque channels in an effort to book any additional rooms on short notice. Of course, you can’t achieve your strategic goals without actually putting your tactics into action, so both types of revenue management are necessary. However, many revenue managers - maybe including yourself - spend so much time on the tactical piece that they don’t have the time or energy to focus on the bigger picture. The strategic revenue management tasks often get pushed to the bottom of your to-do list as tactical tasks that seem more urgent take priority.   The Future of Hotel Revenue Management The hotel industry, like the economy as a whole, is cyclical. As the economy gets stronger or weaker, so does the demand for hotel rooms. We witnessed the first major hotel industry shakeup after 9/11; during this period of decreased demand, revenue managers became more integral players in hotel operations, and their responsibilities grew to involve both tactical and strategic tasks. The COVID-19 pandemic reminds us of the dip in demand after 9/11, except for two key differences: the demand for hotel rooms now is significantly less than after 9/11, and technology is much more advanced today, nearly 20 years later. As a result,  innovative revenue management systems allow us to automate many tactical tasks, and revenue managers’ strategic minds are needed more than ever to find creative solutions to get hotels through these tough times. Based on the hotel industry’s post-9/11 restructuring, we will likely see revenue management roles and teams that have different responsibilities in a post-COVID-19 world. When demand is low, all we can think about is getting heads in beds. It’s tempting to throw out our strategic revenue management playbook and grab whatever tactics we can get our hands on. Slashing rates and giving away free nights might seem like good ideas in the short term, but if we look at rate and occupancy trends during the period after 9/11 or the 2008 recession, we discover that these aren’t good ideas at all. Deep discounting actually makes it more difficult to build rates back up since travelers get used to paying cheap rates. The best course of action is to listen to your revenue management system’s recommendations and automate the tactical side as much as possible. Instead of jumping to short-term “wins” that could hurt your performance in the long run, revenue managers benefit from using a slow period to focus on strategic revenue management. Revenue managers should take the hotel’s entire value proposition into account when setting rates, being mindful of the opportunities they can create for other departments by offering value adds (F&B credits, for example). It’s also prudent to only make rate adjustments for dates that you’re absolutely certain will be affected by decreased demand; you don’t want to sell discounted rates too far into the future in case demand rebounds by then.   What’s Needed for Strategic Revenue Management? Just like running a hotel, you can’t do strategic revenue management entirely on your own. Revenue managers that apply strategic revenue management effectively know how to leverage both technology and people within the hotel to achieve their goals.   People Though revenue managers are known for their analytical know-how and razor-sharp Excel skills, strategic revenue management offers the perfect chance to hone your people skills. How do your colleagues fit into good strategic revenue management? Get everybody on board: Before you launch any type of revenue management strategy, you need to get buy-in from your colleagues - especially the executive team. They must understand why you’re choosing certain strategies and what the long-term impact will be. If an ownership group is involved, you can even mention how solid strategic revenue management will boost their overall return on investment and make the hotel more profitable. Once everyone understands the strategy, then you’ll have the support and resources you need to put your plans into action. Incorporate other departments: It’s easy to think that strategic revenue management is only something that concerns the revenue, sales, and rooms departments. But, in reality, a comprehensive revenue management strategy can include (and benefit!) every department on property. Is one of your goals to increase ancillary revenue? Then you can collaborate with the food and beverage team on some mouth-watering special offers. Lay out a plan: Strategic revenue management involves planning and predicting what you need to do to hit your targets. But in order to create a good plan, you need to do some serious brainstorming. Together with your team, block a few hours on your calendars on a regular basis so you can get in the habit of setting aside your daily distractions to focus on the bigger picture. Thinking about your hotel’s position in the market, your services and amenities, major events in your area, and more. How can you maximize these factors? Once you understand where your hotel is currently, you can determine some strategic goals and formulate a concrete plan to reach them. It’s also helpful to include milestones and points where the team can check in with each other to keep progress moving along. Technology But people aren’t the only component in strategic revenue management - especially not when the people are as busy as you are. Revenue managers need high-tech tools and innovative systems to help them glean insights from data and streamline daily tasks. Automate, automate, automate! Let technology handle the tactical piece while you focus on strategic revenue management. A successful revenue manager uses a revenue management system like IDeaS to automate tasks like pulling and sending reports, making rate changes, and distributing rates to various channels. Think of your revenue management software as your trusty sidekick, there to assist with routine tasks and free up your time for more important things. Dig into big data: Revenue management software can also reveal information about your market, your competitors, or your guest behavior that you can use to shape your strategy. Especially after a market downturn, you’ll want to have a pulse on not only your competitors' rates, but also the demand for your market as a whole. You don’t need to spend your valuable time doing research; a technology solution like IDeaS can provide real-time insights based on market data.   Although we like to try, we can’t predict the future, nor can we anticipate exactly when the next slow period will creep up on us. But by making strategic revenue management an integral part of your hotel’s operations, you will be better prepared to weather the storm and less inclined to jump to impulsive tactics. When you focus on a strategy that reflects your hotel’s value as a whole, you can reach your strategic goals, which, in our opinion, is the best vision of the future of revenue management.  

Understanding the Demand Curve (And How It Works)

by
Hotel Tech Report
1 month ago

Property owners commonly rely on their revenue management tool to “do the work” for them, using their RMS to find the ideal mix of room rates and occupancy. It’s easy to fall into the trap of using your revenue management tool blindly without understanding how it works. As a result, however, you may be missing a strategy that will drive the absolute highest value for your hotel. Revenue management systems like BEONPRICE automate much of the revenue management tasks that would previously occupy much of your time. These systems do the bulk of the manual labor, but stop at providing strategic revenue management. This is where revenue managers need to focus their effort: and returning to the basics of the demand curve can help your team be more strategic in maxing out your property’s revenue potential. Understanding the demand curve gives decision-makers a way to anticipate how demand affects the pricing of your hotel rooms. The demand curve allows you to model travelers’ decisions and price your rooms accordingly to gain the most possible revenue from those seeking accommodation at any given time. Revisiting the basics of the demand curve can help you develop a more intelligent revenue strategy to gain more customers and beat out the compset.   What is a Demand Curve? The demand curve is a graphical illustration of the law of demand. It represents the relationship between the price of a good or service and the amount (quantity) demanded over a given period of time. The x-axis charts the quantity demanded; the y-axis charts the price. The demand curve allows you to predict the quantity demanded when you price your rooms at a specific dollar amount. There are two main types of demand curves: the elastic demand curve and the inelastic demand curve. Elasticity refers to the degree to which an increase in price results in a decrease in demand. When a demand curve is elastic, a price decrease causes a significant increase in the quantities purchased. For instance, when the price of paper towel drops by 15%, a shopper might buy extra knowing they’ll use it eventually. A perfectly elastic demand curve looks like a flat, horizontal line. Inelastic demand curves map what happens when a price decrease doesn’t increase the quantity purchased. Fruit, for instance, has a relatively inelastic demand curve; because fruit spoils in large quantities, a shopper can’t buy more of it just because the price falls by 15%. A perfectly inelastic demand curve looks like a vertical straight line. There are many variables that impact demand elasticity, especially in the hotel industry. Before we dive into those, we’ll cover a basic understanding of the law of demand to provide background your hotel can use along with a revenue management tool to improve profitability.   What is the Law of Demand? In macroeconomics, the law of demand is a principle that states that as the price of a good decreases the quantity demanded of that good will increase (and vice versa). The phrase “quantity demanded” is an important part of this definition. Quantity demanded refers to the discrete amount of a product or services – e.g., available hotel rooms, or hours of labor. Most people just refer to this as “demand,” but in macroeconomics, demand refers to the entire demand curve. The law of demand holds true as long as four key factors that influence demand don’t change. These factors include:  The prices of related goods or services (e.g., airline tickets) The income of the buyer The tastes or preferences of the buyer The expectations of the buyer (e.g., about future prices) These factors, among other things like the state of the economy and regulatory changes, can shift the entire demand curve as the relationship between price and quantity changes.   Demand Curve Shifters When the entire demand curve for a product shifts to the right, that indicates that the product has become more commercially desirable and that a larger quantity will be sold at a given price. If the entire demand curve shifts to the left, the opposite is true: the good or service is less desirable and fewer items will be sold at a given price. What causes a demand curve to shift? The demand curve graph can shift to the left or right depending on changes in income, population, and consumer preferences. Here are some examples of how this works.   Income: when income goes up, so does demand. Consumers who have more disposable income are more likely to spend it. When the economy expands and paychecks go up, consumers tend to spend more on desirable goods, leading to a shift in the overall demand curve to the right.  Population: if population goes up, so does demand – shifting the curve to the right. There are more people who want an item at any given price point, so the curve moves.  Consumer preferences: there are all kinds of things that can influence consumer preferences. Consistently negative reviews of a hotel property, for instance, can cause the demand to drop. Movements in taste change the quantity of a good at every price point. Remember, when the demand curve shifts, it indicates a shift in overall demand – not just in quantity demand. A shift left or right does not mean that the quantity demanded by every individual buyer changes by the same amount. For instance, not everyone who has a higher income will, therefore, buy an additional car. A shift in a demand curve shows a pattern for the market as a whole.   Hotel Demand Curves What does the law of demand mean for pricing at your hotel? There are many variables that increase or decrease demand, meaning the hotel industry is pretty elastic. These independent variables include average daily rate (ADR), income, change in employment, seasonal trends (i.e., demand during spring break or holiday travel periods), and rooms sold. ADR has a negative relationship to demand while the rest can positively shift the curve to the right. “For example, as ADRs increase, consumers purchase fewer hotel rooms, hence the negative sign. As income and employment increase, consumers have greater abilities to purchase hotel rooms, hence the positive direction of these relationships,” reported one analysis. However, different types of properties also have different degrees of elasticity. General price elasticity data shows that luxury rooms and high-end properties are by far the most elastic. Because these rooms are considered a luxury good, travelers are more price-sensitive to spending on expensive vacations; they’ll seek “value” when incomes are down, unemployment is up, or news headlines predict a recession. The following table indicates how elastic demand curves are for each type of property.    What do the numbers in this table mean? If the quantity demanded increases by 7% when price decreases by 10%, the price elasticity of demand is -7/10 or -0.7. In this case, expect expenditures to decrease by 3%. By understanding how guest income, employment, seasonal trends, and ADR can change your demand curve, revenue managers can price rooms effectively to capture the highest possible quantity demanded. This is where a revenue management software platform comes into play.   Revenue Management Software is the Key to Optimizing Demand Revenue management software such as BEONPRICE can help gather data points necessary to properly price your hotel rooms. Revenue management software helps your team sell the right room to the right customer at the right price, incorporating demand curve variables along with channel and timing to maximize profitability. BEONPRICE will factor in historical and market data with forecasting and predictive analytics to recommend rates for each customer segment and room type. The algorithms in an RMS help hotels set an ADR depending on real-time supply and demand information. Accurately pricing rooms with better data leads to an increase in RevPAR and Net RevPAR (RevPAR after operating costs are deducted), as well as the RevPAR Index (a measure of revenue in comparison to competitors in the market). When a spike in demand is predicted for a seasonal, such as university spring break, BEONPRICE can help set prices that account for the right shift in the demand curve.  Hotels that use revenue management systems save between 20 - 40 hours each month by streamlining manual workflows. The AI built into BEONPRICE and similar platforms can free up your team to do more strategic thinking. Leave supply and demand analysis to the robots – and get your pricing on the right track by returning to demand curve basics.  

What is Revenue Management? A 2021 Guide for the Hotel Industry

by
Hotel Tech Report
2 weeks ago

In this guide to all things revenue management, we’ll cover everything from the history of revenue management to the best revenue management software, career and education options, revenue management strategies and important terminology. Whether you're considering a career in hotel revenue management, have recently embarked on one or work in another area of hotel management and want to better understand the field, our guide sets you up with the foundation you need for a successful career in revenue management!   A Brief History of Hotel Revenue Management  Airlines were the first to understand the power of segmented pricing to yield more revenue than across-the-board pricing. It all started with American Airlines, who realized that there was more value to be unlocked by tiering pricing according to specific conditions, such as offering discounts to tickets that were booked more than 21 days in advance. It was about getting the highest “yield” by more efficiently and intelligently pricing its inventory. This concept was called yield management, a term coined by former chairman and CEO of American Airlines Robert Crandall, and became what Crandall called “the single most important technical development in transportation management since … deregulation.” Yield management is an inventory-centric approach that matches the right product in front of the ideal customer at the best price.  Both airlines and hotels have what's known as perishable inventory, or inventory that can’t be sold once a flight has taken off or the night has passed. But it wasn’t until the late 1980s when hotels caught on and larger brands began to experiment with yield management. Marriott was the first mover, adapting airline yield management strategies to the hotel business and seeing great returns, as Bill Marriott Jr., Chairman and CEO, Marriott International once said: “Revenue management has contributed millions to the bottom line, and it has educated our people to manage their business more effectively. When you focus on the bottom line, your company grows.” Once other hotel brands saw Marriott's success, yield management for hotels became a common practice across the industry. Hotels became more intentional about optimizing room revenues (pricing) and occupancy (bookings volume) through variable pricing strategies based on factors like demand, booking windows, and market conditions. Eventually, this evolved into a more comprehensive approach known as revenue management, which puts the consumer at the center of the equation. It’s based on the economic concept of “willingness to pay,” which is the maximum amount each consumer is willing to pay for any one unit, item, or service. Revenue management strives for better alignment between how a hotel room is priced and what a consumer will pay.  “Revenue management refers to a business practice designed to optimize the revenue potential of an asset through all market conditions.” -Revenue Matters And it’s more than just rooms: it’s also about maximizing a guest’s total spend on property. As we’ll see below, today's revenue managers must collaborate cross-functionally to implement a holistic strategy that delivers peak profitability rather than simply focusing on room revenue.   What is Revenue Management? A lot has changed since the first revenue management system was put into place in the late 1980s. Today's technologies are far more sophisticated, able to capture  and analyze massive datasets to deliver pricing recommendations in real-time. Given this complexity, today’s revenue managers are commercial leaders that bridge between marketing, sales and operations at your hotel. They act as the glue between departments to ensure that a hotel is getting the most it can from its asset across all market conditions, navigating an increasingly complex distribution landscape to optimize revenues. “Revenue management is selling the right room to the right client at the right moment at the right price on the right distribution channel with the best commission efficiency.” -Patrick Landman, Xotels In an ideal situation -- one that produces maximum revenue -- the hotel room is priced as close to that maximum amount as possible without setting too high of an expectation or sending prospective guests to a cheaper competitor. To determine the ideal price, revenue managers use an RMS (revenue management system) to analyze a hotel’s available supply, in-market and property-level demand, as well as a consumer’s price sensitivity and demographics such as business/leisure and loyalty/transient). Today's revenue managers need these four components to build the foundation for successful hotel revenue management: Compset: Competitors’ rates are also a critical input for setting the best rates, as those prices shape the consumer's perception of the “right price” for a given stay. Together, these inputs provide a valuable baseline for hoteliers to optimize rates.  Value analysis: A value analysis puts your property in context among your competitors by comparing its location, property amenities, bring quality and reviews against those of your compset. Once you can visualize value, you can better position your property in the eyes of potential guests. Rules and alerts: Technology empowers revenue managers with  automation. Most modern software allows you to set up rules and alerts to support your strategy in an automated fashion. These rules and alerts keep your strategy on track 24/7 and  make for a real-time responsive revenue management discipline. Routine and habits: Powerful routine and habits can be to unlock revenue management genius. Revenue managers with daily habits maintain visibility and control over their strategy and make tweaks on the fly to ensure alignment between property strategy and how your software functions.   Revenue Management Jobs It's helpful to understand the various roles within revenue management, as well as their related salaries. It's also useful to understand the potential career paths and opportunities available to you as a revenue management professional. Common threads throughout each of these jobs are a data-driven mindset, a grasp of technology’s role in revenue management, and a collaborative approach to building bridges across departments. Here are relevant revenue management job titles, ranked by seniority, along with salary ranges pulled from Payscale, Glassdoor and Hcareers. Salaries can vary greatly depending on your location and work history, so consult Glassdoor, Payscale or another website to benchmark any offers you may receive! Revenue Analyst (sometimes a Yield Analyst): This position (usually more junior-level) is responsible primarily for analyzing historical data and demand forecasts through a financial lens to Make recommendations for improving revenue growth. Even though this role often uses software, it's exceptionally helpful to know your way around Excel! Many properties still rely on spreadsheets, so proficiency in traditional data analysis is a must. That's why many in this role have CPA credentials and a degree in finance or accounting. Most often promoted to Senior Analyst. [USD 40k-85k base salary plus potential bonus and profit sharing: Payscale | Glassdoor] Revenue Manager: A recent graduate or junior-level professional with a few years experience. Implements revenue management strategies and related processes to optimize revenue in a single hotel or across a portfolio. Scope includes  regular reporting, managing and expanding distribution partnerships, influencing across the organization, identifying new revenue opportunities, and optimizing processes and technologies for peak performance. Most often promoted to Senior Manager. [USD 40k - 75k base salary plus potential bonus: Payscale | Glassdoor] Cluster Revenue Manager/Area Revenue Manager: Larger portfolios will have  a revenue manager responsible for a cluster of hotels or hotels in a specific area. This person will do similar tasks as the revenue manager but expanded across a portfolio. This role requires strong collaboration and interpersonal skills to influence management in each individual hotel and align everyone with a shared revenue management strategy. Most often promoted to Senior Manager. [USD 50k-85k+ base salary plus potential bonus and profit sharing: Glassdoor] Director of Revenue Management: An experienced professional. Creates and implements revenue management strategy, often leading a small team of Revenue Managers. For smaller footprints, this role encompasses all revenue management tasks alongside the higher-level strategic role. The role can also encompass a cluster or single region. Most often promoted to Senior Director. [USD 70k-130k base salary plus potential bonus and profit sharing: Payscale | Glassdoor] VP of Revenue: Experienced and ambitious professionals often move up to the VP level in larger hotel brands. This role functions as an organizational cheerleader, developing relationships that keep revenue management at the Forefront of the organization. This person also manages revenue managers across a portfolio (and often geographies)  and must have nuanced people management skills to motivate those on the ground in different locations. There's also often lots of travel involved. [USD 91k-152k base salary plus potential bonus, profit sharing and stock: Glassdoor] Chief Revenue Officer (or Chief Commercial Officer): The zenith of a revenue management career could be as CRO/CCO. This prominent role leads sales and revenue management across an organization to deliver performance across a globally distributed team. It's an essential role that creates and drives strategy to meet or exceed revenue and profitability expectations. Sometimes this role reaches across an entire organization  or can be broken down by region, such as the Chief Revenue Management Officer, Americas. [USD 500k-800k+ base salary plus bonus and stock, based on public filings] A traditional revenue management career path would progress along the above list from top to bottom. As responsibilities increase, these roles have less defined edges. Top executives have more flexibility to craft roles ideally suited to their strengths  and different organizations have varying needs as far as which responsibilities top execs take on. Other potential career paths: Marketing: Since revenue management collaborates closely with marketing, those with strong data-driven digital marketing skills often make the jump over to the revenue management team (and vice versa). In many cases, having both a marketing and revenue management background provides a stellar foundation for entering into higher levels of management.  Operations: Those that also have experience on the operations side of the business are especially well-suited to moving up the ranks. That's because revenue management also requires buy-in from operations, as improved operational standards and service levels lead to better reviews, stickier loyalty, and higher rankings on OTAs. That’s a much easier path for more profitable distribution! Tech: There's also a well-worn path between hospitality revenue management and technology vendors.  with easily transferable skills, industry expertise, and a broad Network, revenue management professionals make great assets for hospitality technology vendors. If that's something that you are looking to do, be sure to nurture your network and develop the proper skills required for your target role.   Revenue Management Terminology & Metrics Revenue management can be a confusing area of the industry, with plenty of jargon. As you get started with your revenue management career, become familiar with these essential revenue management terms. We’ve also included some helpful industry benchmarks to provide a deeper foundation of understanding. The most common metrics used to measure hotel performance: Average Daily Rate (ADR) shows a hotel’s pricing trends over time. It's especially helpful when benchmarking price competitiveness and pricing trends against other hotels. Average length of stay (ALOS) is the average amount of days stay at the hotel during a particular period. Booking window, or how far in advance guests make bookings. Booking window acts as an anchor for making pricing decisions, as booking patterns  Cost of Acquisition shows you how much it costs to acquire a booking, such as paying a channel or travel agent’s fees and commissions. Occupancy rate shows the percentage of rooms filled in any given period. It's a measure of demand.  Revenue per available room (What is RevPAR?) tracks how much room revenue is earned per available room in the hotel. It’s rooms revenue divided by rooms available. Recently, TRevPAR has gained popularity, as it divides a property’s total rooms and non-rooms revenue by rooms available to track “total revenue.” Other revenue management terminology: Allotment: Refers to any block of  pre-negotiated rooms purchased and held by a third party, such as an event organizer, wholesaler, operator, travel agent, or OTA. Best Available Rate: The base rate from which other segments are priced. Commissions: Amount paid to intermediary for each reservation made. Comp set: This is the competitive set of similar hotels that you benchmark against.  Days Before Arrival: Number of days before guest arrives. Displacement Analysis: Calculating the cost of accepting group bookings today compared with the loss of potential full-price bookings  at a later date. Fenced rate: Rate with specific limitations, such as no refunds or cancellations.  GDS: The Global Distribution Systems (Amadeus, Sabre, Travelport) connect travel buyers and suppliers in a centralized interface, charging access and per- transaction fees. Market share:  Percentage of local market your hotel has compared to the competition. Online Travel Agency (OTA): Digital-only travel seller, such as Expedia and Booking.com, that offers booking directly to Consumers and business travelers. Pace: Being “on pace” means that bookings are happening as expected and on track for meeting booking targets and/or demand forecasts for a particular date. Price Elasticity: How responsive demand for your hotel is based on changes in its price, as in does demand drop when prices increase? More on price elasticity in the hotel industry. Rate Parity: Strategy for maintaining the same rate across all channels; rates are the same, they are in “parity.”  Segment: A subset of either past guests for potential guests used for marketing purposes, often derived from a hotel’s CRM data or digital marketing campaigns. Shoulder Date/Season: Time in-between busy seasons or busy periods, such as weekdays or the fall/spring. Benchmarks/Statistics Customer acquisition costs: These benchmarks show how customer acquisition costs affect revenue performance. Recent data from Kalibri Labs Shows that hotels keep the following amounts of every dollar paid by a guest: 97.3% from property direct, 93.4% for brand.com bookings, 94.5% from group bookings and 83.4% from OTA bookings.  Impact of loyalty bookings: Loyalty continues to be a great source of business for hotels. In 2019, according to Kalibri Labs, total US loyalty contribution increased to 56.2%, which is up 17% since 2016, when book direct campaigns began. The power of reputation: Another Kalibri Labs data analysis found a correlation between review score and ADR: in 2019, properties with lower consumer review scores saw decreases in ADR. Channel mix: Each country has its own consumer preferences as far as where they book travel. To see the top revenue makers in different countries around the world in 2019, SiteMinder’s annual review breaks it down.  Cancellation rates: D-EDGE found a 40% cancellation rate in 2018, with Booking.com having the highest cancellation rate of OTAs: 50%. Another win for direct bookings, cancellations from a properties website where the lowest at 18.2%.   Revenue Management Training There's certainly a lot of powerful technology available to revenue managers. These tools can actually make it possible to learn on the job and, with enough dedication, to become relatively proficient at the job without formal training. Even so, revenue management is an analytical role with a foundation in statistics and math (and lots of Excel formulas!). For those looking to make this a career, it can be extremely helpful to have a formal degree that emphasizes your credentials --  especially if you're looking to go into a bigger global brand. There are also plenty of certifications that can boost your professional credibility without investing in a dedicated degree. Some options to consider: Dedicated degrees: For those just starting out in hospitality, it can make sense to invest in a dedicated degree. For those later in their careers, It may make more financial sense to pursue certifications, which we’ll cover below. The top three degree programs, covered below, offer not just top-notch education but also global alumni networks and helpful placement services to fast track your revenue management career:  Cornell: The School of Hotel Administration offers a 4-year undergraduate program in hotel administration, covering a core curriculum, electives (such as hospitality leadership and real estate), and 800 hours of real-world industry experience via the Statler Hotel, an on-site teaching hotel. Cornell also offers 2-year graduate degrees, Master of Management in Hospitality, Master in Real Estate and a Masters of Science, as well as a post-graduate PhD in hotel adminstration.  EHL: Based in Lausanne, the EHL is nearly always the number one or number two hospitality management school. EHL offers four degrees: a 4-year Bachelor in Hospitality, a 16-month Master in Hospitality (with courses spread across Switzerland, Hong Kong and the U.S.), an 11-month full-time Executive MBA in Hospitality, and an MBA in Hospitality that’s 80% online, 20% on-site in Switzerland.  EHL also has a new campus in Singapore that offers a bachelor’s degree with one semester in Switzerland, followed by an internship in a country of the student’s choice and then completing the degree on the Singapore campus.  UNLV:  Las Vegas is one of the world's premier hospitality destinations. There's a lot of situational value to be unlocked from  going to school in this environment. UNLV is also regularly recognized as one of the top hospitality schools in the world, due in part to its diversity of curriculum that includes casinos and gaming. For undergraduates, there’s the 4-year Bachelors in Hospitality Management, with concentrations in Gaming Management, Meetings and Events, PGA Golf Management Restaurant Management. For advanced degrees, there’s the 2-year Master of Science in Hotel Administration, the Executive Master of Hospitality Administration (with a focus in either hospitality or gaming), and a 2-year PhD program for hospitality management. For the ambitious post-graduates, there’s also a program to earn both an MBA and a Master of Science. Certifications: Continuing education doesn't necessarily require a full degree program. Many universities and organizations offer certifications and online learning that can help keep your skills sharp. A few to consider:  CRME: This is the formal Certified Revenue Management Executive certification from HSMAI, a global association of hospitality sales and marketing professionals. It's a widely recognized and trusted way to prove proficiency at revenue management. To be eligible for this degree, you must be an industry professional that can prove a certain level of expertise. Once approved, you’ll receive a study guide that covers the evolving dynamics of revenue management, which is the basis for an online exam that determines certification. The cost is $450 for HSMAI members and $625 for non-members.  CRM: Also by HSMAI, the Certificate in Revenue Management is a starter course for those just starting out in the field or current hotel staff considering a move into revenue. The online course covers the fundamentals of revenue management, from pricing strategy to forecasting, segmentation and business intelligence. The cost is $350 for HSMAI members and $500 for non-members.  Cornell: For those looking to take advantage of Cornell's reputation without having to take classes on site, there’s the Hotel Revenue Management certificate teaching the basics of revenue management and the certificate in Advanced Revenue Management covering segmentation, pricing decisions and revenue strategy. Both are two weeks and $3,600. For executives pursuing continued development, the university also offers a variety of other online-only certificates, ranging from leadership to F&B management, as well as three-day classroom programs. CHRM: The educational arm of the American Hotel & Lodging Association offers a course to become a Certified Hospitality Revenue Manager. The digital course is for those with at least 6 months experience or an advanced degree, and requires passing a 125 multiple-choice question online exam on forecasting and planning, strategies and tactics, statistical analysis, e-commerce and online distribution. The cost is $300 for AHLA members and $375 for non-members. ESSEC via Coursera: You don't necessarily have to go to a physical school to get the certification. This Coursera specialization, taught by professors from ESSEC Business School And created in partnership with Snapshot and Duetto, takes up to four months to complete and includes modules on hotel demand management, distribution and revenue management, as well as a case study. Students can audit the class for free but must sign up for Coursera’s $49/month plan to earn the official certificate for placement on resumes and LinkedIn.   An Overview Of Revenue Management Strategies  Revenue managers use data from business and market intelligence tools to craft strategy and then leverage software to implement the best tactics and pull the pricing levers based on actual/forecast demand. Revenue management strategies are often blended depending on the properties priorities and current market conditions. No strategy is ever static; here are a few jumping off points for developing a property/brand-specific strategy. Yield management. As we saw earlier, hotel yield management is a strategy for pricing inventory according to demand in order to control profitability. As a subset of revenue management, it focuses exclusively on finding your hotel’s optimal balance of supply and demand for its rooms, or the point where prices perfectly match traveler demand. Proactive versus reactive. Proactive revenue management is seeking to be a market leader and leveraging historical data and future forecasts to proactively stay ahead of the competition. Whereas reactive revenue management is being a market follower and setting rates according to the competition. For instance, setting a rule to always undercut competition by 5% and using what's known as penetration pricing, or positioning your hotel as the cheapest in the market. Strategic versus tactical: Another way to look at proactive versus reactive is to think strategically versus tactical. Strategic revenue management proactively uses a sound revenue management strategy to shape all pricing and distribution decisions. Tactical revenue management is about reacting to changing market conditions with specific tactics, such as using discount pricing to boost occupancy by dropping rates or through automatic rules that adjust pricing based on specific events (competitor drops rates) or thresholds (forecasted occupancy dips below a certain percentage). Tactics generally cascade up to an overarching strategy. Open pricing. Traditional revenue management relied on static prices, using the Best Available Rate as a basis for discounts or premiums. It was fixed, inflexible and poorly optimized. Thanks to AI-enabled revenue management software, it's now possible to adjust pricing in real-time for specific segments and channels. This tech is also enabling personalized pricing, where offers are targeted down to the individual guest level. Segmentation is a key part of open pricing; revenue managers must have a thorough grasp on the nuances of their guest demographics and channel mix to fully leverage open pricing. Direct bookings. Most hotels are focused on a “direct is best” revenue strategy because hotels keep more of every booking that comes direct versus third-party. In addition to carefully managing the channel mix, as far as availability, rates, and inventory, other tactics for this strategy include encouraging positive reviews to build online reputation and WOMM, capturing more bookings direct by offering special packages or other incentives and using the best hotel software that optimizes marketing funnels. Channel-based. As software becomes more capable, it's much easier to create a channel by Channel revenue strategy that prioritises the lowest-cost channels and  limits inventory on channels that produce less-profitable bookings. There’s plenty of nuance here, but it's easier than ever to quickly open and close channels depending on changing demand forecasts.  A channel-based revenue management strategy is ideally suited to today's “total revenue” and “total profit” mindset.  Total revenue management. Last but not least is something that we've mentioned a few times: total revenue management is a strategy that optimizes all aspects of a hotel's operation for profitability. It combines collaboration across departments with data-driven insights to deliver results.   Revenue Management Consultants There are two options for hotels looking for outside help with revenue management: a hospitality consulting firm or a freelancer. Much of the decision will come down to price. Also, look for specific experience in your hotel’s category, solid client testimonials, and a data-driven approach. While there has been a rise in capable revenue management professionals going freelance on a contract basis, larger hotel groups may prefer to engage the services of a bigger firm with larger staff and broader capabilities, such as branding, marketing, social media and PR . Of course, that usually comes at a higher cost!  Here are a few firms and freelancers to get your search started. Another great place to find recommendations is with dedicated hotel organizations, such as the AHLA and HSMAI, who keep lists of members in related revenue management fields. Firms: Revenue By Design: Based in the UK, Revenue by Design offers training programs, outsourced revenue management services, and revenue/distribution audits to hotel clients across categories and geographies. Xotels: As a boutique hotel consulting company, Xotels consults independent hotels on several areas of expertise, from operations to sales and marketing to revenue management, finance, pre-opening, and brand positioning. Revenue Matters: Led by Trevor Stuart-Hill, an HSMAI Top 25 mind in hospitality sales and marketing, Revenue Matters  helps clients build a holistic approach to optimizing Total Property performance, aligning across marketing, sales, and revenue. Engagements can be strategic or full-service revenue management support.  berner+becker: The firm optimizes existing revenue management strategies through extensive audits, as well as create custom revenue strategies that can either be implemented by clients or by the firm itself. Kalibri Labs: Founded by Cindy Estis Green, who previously founded a data mining consultancy sold to Pegasus, Kalibri Labs provides revenue management consultation to hotels worldwide. It also has a proprietary revenue strategy platform that uses data from 33,000 hotels to drive its analysis and recommendations. Revenue Acrobats: Silvia Canteralla began her revenue management career in 2004 at a major international chain. Her services range from total revenue management, including dynamic pricing and forecasting, to optimizing F&B, group, and catering revenues. HotelRevBaba: Sunil Singh has 10 years of revenue management experience. He provides revenue strategy and planning services, as well as strategic support across the entire hotel operation, from pre-opening plans to budgeting. kbb consulting: Kathryn Baker started her revenue management career at Westin, eventually  transitioning into roles at Starwood and Intrawest Corporation. Since 2007, she has consulted on revenue management strategy  across a broad client base, from small properties to full-service multi-unit resorts. RevMutu: Kammelh Kishorre Founded his consultancy in 2012 has over 15 years of experience in hospitality and revenue manager within India and internationally. His services include audits, training, digital marketing, revenue management and channel distribution.  RevUp: Robert Lewis Sudakow uses his background in revenue management, ecommerce, sales, distribution, and digital marketing across multiple markets to advise properties and luxury resort, urban, corporate, boutique, and conference center categories.   Revenue Management Software and Solutions There are several categories of revenue management software that can power an optimal revenue strategy. Here's a look at some software you might want to consider for your hotel’s revenue management function. Revenue Management Systems (RMS): These all-in-one systems provide a comprehensive suite of tools to support your revenue management strategy. By bundling everything in one, RMS provides convenience and simplicity.  There's a single system to manage -- which streamlines daily operations, as well as training new staff. Key Vendors: IDeaS, Duetto, Atomize, Pace, BEONPRICE. Central Reservation Systems (CRS): The CRS centrally manages and distributes room inventory, rates and availability in real-time to both the hotel's website and third-party distribution channels (OTAs, GDS, metasearch). Key vendors: Pegasus, TravelClick iHotelier, Windsurfer, SynXis. Market Intelligence: Rate shoppers give you insights about how your local market is pricing their rooms. By keeping the pulse on competitors, you can use these insights to adjust your own pricing strategy within the context of wider market demand trends.   Key Vendors: OTA Insight (Rate Insight), TravelClick Demand360, SiteMinder (Prophet), Optima by RateGain, D-EDGE RateScreener. Parity Management:  When wholesalers distribute uncontracted inventory at lower rates onwards to OTAs, hotels may lose out on direct bookings.   so it's important to monitor how close your rates are aligned across channels. In today’s complex distribution landscape, maintaining parity is a constant battle for revenue managers. Key Vendors: OTA Insight (Parity Insight), TravelClick (Rate360), Rate Parity+ by RateGain, Triptease Parity Monitoring, Pegasus Rate Match. Channel Managers: The channel is a key part of an effective distribution strategy that prioritizes profitability. Proper channel management means balancing cost with access: to prioritize the lowest-cost channels while also ensuring that your inventory is available on the high-demand channels. Key Vendors: Cloudbeds (Myallocator), SiteMinder (Channel Manager), RateGain (RezGain Channel Manager), D-EDGE Smart Channel Manager. Business Intelligence:  Business intelligence software cuts across data silos to turn real-time trends and patterns into actionable insights. In combination with market intelligence, it gives revenue managers a complete data-backed toolkit for optimizing pricing strategy. Key vendors: HotelIQ, M3 (Insight), Scoreboard by Duetto, OTA Insight (Revenue Insight). Upselling Software: Upsells are a great way to boost revenue from existing reservations and play into the “total revenue” mindset of modern  revenue management. Upsell software makes it easy to implement upsells in guest communications. Key Vendors: Oaky and Nor1.   We hope that this guide was useful as you embark on your path to becoming a rockstar revenue manager. We’ve got plenty of resources on our blog, which covers all aspects of hotel life, from operations to revenue management. Wherever you are in your career, you’ll want to stay on top of how the latest trends will impact our interconnected industry --  and what you need to do to maintain competitiveness in both the near and long-term.