REVENUE MANAGEMENT

Revenue Management can be defined as the application of disciplined tactics that predict consumer behaviour, optimise product availability and price products to maximize revenue growth. Revenue Management can help hotels to:

• Assess future consumer behaviour under dynamically changing market conditions.
• Determine the most effective way to price and allocate inventories to reach each and every future consumer.
• Communicate this data instantaneously to hotel distribution outlets.
• Serve as a decision-support system for operational functions, such as pricing, reservations and marketing.
• While information technology is a key part of revenue management, it is more important to first establish sound Revenue Management principles and cohesive managerial structures and to abide by them, and then evaluate and invest in decision support tools and systems that will fit into those processes.

In General:

• Ensuring rates are bookable for a rolling 12 months
• Ensure you have retail rate choices that are competitive for both the business and leisure customers – use fencing or rules to keep business customers paying appropriate price point and leisure at a competitive price point
• Create packages that make sense for your market and analyze production to ensure the packages are meeting the needs of the customer segment – if they are not buying – is it marketing related or not the right package elements?
• Negotiated rates should be loaded for 15 months to avoid rates going dark during RFP and/or acceptance process – and proposed rates pre-loaded during RFP process
• Room cost analysis to determine profitability of different sources of bookings
• Is your guarantee/cancel policy competitive?  Shop your competitors to ensure you are not too lax or too restrictive with your general policies
• Ensure the guarantee and cancel policies are consistent across channels and websites
• Ensure front desk agents are trained to overcome the question of “is there a lower rate available?” at check in to avoid rate trade down

For Assistance and Strategic advice on: Rate planning and availability; Rate structure; Positioning in the market place; Developing travel agent relationships; Maximising returns; Corporate rate loading and RFP’s; Consortia development; please contact us at support@navarinoservices.com.