5 Key Trends for Modern Revenue Management

5 KEYTRENDSFOR MODERNREVENUEMANAGEMENT

NETAFFINITY .COM

Maeve Walls

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One: Increasing Profitability

Two: Seizing the Moment with Book Direct

Three: Planning Ahead

Four: Better Data (Tools)

Five: Technology

THETRENDS

5Today, we’re going to take you through 5 key trends in revenue managementtoday. We won’t be looking at the timeless fundamentals, but rather at currenttrends and strategies. These are the ones that are vital to strong revenue growth,and they are the ones you should take advantage of if you want your profits tosoar.

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The past few years have given birth to a wide variety of revenuemanagement ‘best practices’ and tools. What’s the equation for success?

Two of the major factors affecting a modern revenue manager’s success arethe tools they're using & how well RMs are integrating their knowledge withthe big picture.

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INCREASINGPROFITABILITY

1The focus has shifted from 'heads in

beds' to maximizing ROI for eachchannel.

VALUE VS COSTThe focus on profit today is all about maximizing ROI onevery channel, both online and off. How do you do that?

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When you know the true value and cost for each channel, you candevelop a clear strategy. Without accurate cost-of-acquisitioninsights, you cannot know if your pricing strategy is the one thatwill bring you the most profits.

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OTA SPENDCALCULATOR

CLICK HEREFor online channels, try an OTA

spend calculator to start evaluatingthe cost of your channels, and the

potential savings of increasingdirect bookings.

KPIs TO WATCH

Measure traffic per source

Measure traffic per device

Measure New vs Returning ratio

Measure traffic per location

Conversion rate of visitors to bookers

Conversion rate of searchers to bookers

Don't forget drop off points in the sales funnel!

Identify key pages at the start of the funnel

HOTEL WEBSITE TRAFFIC HOTEL WEBSITE CONVERSION RATE

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KPIs TO WATCH(more )

Set a target for direct bookings - especially on

key demand dates

Maximum bookings through each channel

Net ABV per channel

Net ARR per channel

Max commission you are willing to pay daily -

link these to rate bands if possible

BOOKINGS PER CHANNEL PROFITS PER CHANNEL

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RESOURCESTO GET YOU STARTED:

Adjusted RevPAR - why it's better than RevPAR

Methods to calculate distribution costs

3 tips: dynamic pricing, automation & non-pricing strategies

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Evaluating offline resources like phones and walk-ins is, insome way, a bigger challenge. It's not as simple as takingaccount of commission alone, and you don't always haveaccess to the advanced data available online.

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THE BOOKDIRECT

MOVEMENT

2Time to seize the day.

With heavy hitters like Marriot, Hyatt and Hiltonputting their Book Direct campaigns front & center,the message is being heard loud and clear.

WHAT MAKES UP AGOOD BOOK DIRECTSTRATEGY?

A clear statement - not a few USPs marked with ticks

Part of the overall marketing message for the property

Embraced by all departments

Seize the opportunity to sell the consumer on the merits of

booking direct

Not purely price-driven: focused on value of the product

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THECONSUMERVIEW

Consumers should see bookingdirect as getting the best price

through reward programs.

They should also be aware thatOTAs might actually be driving up

prices as hotels raise prices tocover commission costs to OTAs.

The bottom line?

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Booking direct increases customer loyalty,which raises the lifetime value of the guest.You also have much lower costs peracquisition, and the chance to build a closerrelationship with guests.

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PLANNINGAHEAD

3Look down the road.

5 YEARS.That's how far you should be looking ahead.

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Just like our lives outside of work, we need shortand long term plans to be motivated and focused.

Think about what's needed to achieve your revenuegoals, and how best to implement them.

GET APLANNERWhat's the first step? A really good planner. Use a monthly

planner to detail out the focus for each month, and the key

activities taking place that month.

Make your plans in conjunction with ongoing revenue

strategies, to make sure you're maximising potential returns.

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BETTER DATA(TOOLS )

4The noise has started to drown

out the signal. Let's fix that.

BIG DATAThere is a need for robust reporting & analyticaltools to support hoteliers dealing with big data.

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There's no shortage of data today. Instead, there'salmost too much. How do you collate that amount of datainto a useful format, and how do you use it to inform andqualify decisions quickly enough to matter?

Lennert de Jong of citizenM hotels recently

discussed the need for better data tools:

"We should not have data discrepancies between

our finance systems, PMS, forecasting systems,

and CRM... the roles have changed and so have

the responsibilities."

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THE FOCUS :The most important focus for RMs today is thedata the aggregate, and how they aggregate it.

Independent hotels have the advantage here: theylive by the grace of guest feedback, and they havethe decision-making power and ability to moveswiftly that chains do not.

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USEFUL TOOLS

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There should no be issues over whether revenue is'technology spend' or 'marketing spend.' Instead, hotelsshould build an integrated system that lets them see thetrue value of each channel.

Customer Relationship Management SoftwareEnterprise Resource Planning SoftwareOnline Reputation Management Software

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TECHNOLOGY5Let automation free you up.

THE OPTIONSYour options range from revenue management systems to channelmanagers, benchmark reports, rate shopping tools, review systems andeverything in between.

Look at your business intelligence gaps & research which systems helpyou best reach your goals.

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When you’re making your plans, there is no shortage of techoptions that are targeted at making revenue analysis andaccurate decision-making an easier task. Some are solid, someare trendy, and others may just be style over real substance.

AUTOMATIONAGEAs a recent article from IDeaS illustrates, a day in the life of arevenue manager with automation is very different from a day in thelife of a RM without automation. RMs without the benefit of anautomated revenue management system are often “handcuffed” tomanual data entry, more focused on logistics than strategy, andrelying on more limited data than the RM benefiting fromautomation – not to mention the work-life balance issues!

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The bottom line?

Automation, properly done, frees you up to doanalysis, make long-term strategies, and gives youaccess to more usable data for decision making.

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THANKYOU !

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