By Chris Baniewicz
The demand for travel is back on the rise, and hoteliers around the world are seeing occupancy and daily rates shooting back towards pre-pandemic levels. After two years of downturn, hotel revenue leaders are eager to maximize performance revenue and make up for lost earnings.
In order to do so, hotels must adapt to a landscape that has evolved significantly from pre-pandemic times. They can no longer expect traditional revenue management practices that rely on historical data to stand up to today’s unpredictable demand conditions and travelers increased preference for flexibility. A shift to revenue performance, which entails maximizing demand, revenue and profitability by using forward-looking market insights, is critical for those hotels that want to remain competitive and generate revenue.
Expedia Group asked 200 hotel revenue leaders around the world to weigh in on how shifting to a technology-lead revenue performance approach can help hoteliers and other accommodation providers navigate price and planning decisions in today’s unpredictable market. Here are seven key takeaways:
- Stay ahead by staying informed. Understand your competitive landscape and how it may have evolved since the start of the pandemic when potential customers search and book and stay informed of changes in your market so that you know how and when to adapt.
- Hone in on opportunities in the market. Identify dates that stand out and review your price positioning in comparison to your competitors.
- Use price and market intelligence to capture more bookings. Ensure your pricing optimizations are in line with what’s happening in the market by reviewing the search demand, market occupancy and the average competitive prices.
- Analyze revenue performance to know if your property is ahead or behind the market. By analyzing competitive price intelligence and market performance data together, you can better understand when customers are booking and what price they are responding to.
- Investigate further to target more customers. Look at competitor rate details such as cancellation policies and promotions before taking action and, if in doubt, wait and review again tomorrow.
- Take action before it’s too late. Whatever action you decide to take, whether it’s increasing prices or offering greater flexibility in cancelation policies, consider the impact of your actions and update your forecast accordingly.
- Make sure your technology stack is up to snuff. Staying on top of and analyzing the range of data required for an effective revenue performance approach takes sophisticated technology. Operations that don’t have the resources or in-house expertise should look to leverage third parties, such as outsourcing revenue management.
The shift to using forward-looking metrics, such as search demand, current market occupancy and market forecast, is increasingly essential to help operators identify patterns of behavior and make better-informed decisions for a market edge. Access to sophisticated revenue performance technology and the right approach can take out the guesswork and play a critical role in helping revenue managers drive demand, mitigate loss and set their properties up for success.
Chris Baniewicz is a partner revenue performance manager for the revenue performance solutions team at Expedia Group.
This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.