Stape by Stape Revenue Management Strategy
Why Revenue Management is Mandatory for Hotel Business.
Revenue management strategies or Hotels
Many hoteliers still scratching their heads when it comes to revenue management, larger segments of the industry like SMEs are still not wholly convinced of its value. rather than discuss why it should be a mandatory part of your hotel’s operations, the First question we need to understand is
What is revenue management? Why is it so popular in the hotel industry?
Almost every industry out there follows some form of revenue management – some call it business analytics or pricing strategies, but the goal is the same. When it comes to hospitality businesses, however, there are three factors that make revenue management a lot more relevant.
*Limited inventory: There are a fixed amount of rooms for sale.
*Perishable resources: Unsold rooms, seats in aircraft, Seats in a movie hall in perishing every single night or within a few hours. All such kind of product is a highly perishable product.
*Customer demand: Guests are willing to pay different prices
Proper utilization of revenue management strategies can play a big role in increasing a hotel’s bottom line. Not only does better pricing improve the property’s occupancy, but it also ensures that the hotel is selling all its rooms at the highest price possible and generating the maximum RevPAR.
Proper market segmentation can make all the difference to a hotel’s revenue management strategy. By breaking down the market based on corporate bookings, internet bookings, association groups, and so on, managers can effectively determine the maximum rate tolerance for each segment. This would of course vary based on location, type of hotel, franchise/independent, number of rooms, and many other factors.
A robust revenue management strategy can increase your revenue and brand as well as it helps to sell the room at the maximum price on a particular day. Demand forecast plays an important role in revenue management. Demand and supply may affect due to various reasons. It also enables the hotel to plan ahead by optimizing manpower for periods of higher demand and avoiding over-staffing during periods of lower demand.
Price discrimination is a very important aspect of revenue management. Selling the same room at different prices to different guests can earn better revenue than a flat single price.
Revenue management today can be implemented easily with advanced, automated software on the cloud platform.
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