Revenue Management : From the Perspective of the Hotel Industry | Entrepreneur

In the hotel and hospitality industry, it is believed that the ideal revenue management is to sell 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.

Before the internet came , room prices and forecasts were done through sheer managerial and ownership experience. With the internet and the power to crunch large data sets, revenue management has become a whole different ball game today.

Today, every bit of data about your room occupancy a couple of years ago can be scrutinized against the specific date and season to determine why you sold your room at that price. And compare it with today’s trend and determine the actual cost of the room you should be selling at.

The Need for Better Demand Forecasting

With cheap air tickets (domestic and international), travelling is more accessible to millennials and the Generation Xers. This means there’s more demand for hotel accommodation and innovation in this field. That’s why we will see innovative ideas like Couchsurfing and Airbnb come along and disrupt the hospitality industry. However, for hotels, more demand should automatically lead to better forecasts and better pricing. Today’s revenue management applications are adept at not only reviewing your hotels past sales, but also analyze competition to set dynamic pricing for your rooms.

The Future Dissects New Data Categories

Today we already have the technology to help hotel owners carefully analyze in-house data such as past occupancy rates, general sales, customer segmentation, market share information, and customer satisfaction to name a few. However, external influences such as past weather conditions, holiday seasons, nearby competitors and their prices to name a few are also being analyzed for better price determination.

The more data we get to analyze, the closer we get to see a clearer picture. Though the future of revenue management is driven by affordable technologies made available to small, medium, and large hotel chains alike, but, at the end of the day, it is up to the manager to interpret the crunched data reports and make the right decisions to influence the revenue bottom line positively.

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Revenue Management : From the Perspective of the Hotel Industry.