Pricing by on-the-books, checking-in no-show bookings, and countless rounds of reworking the budget—these are just some of a hotel and hospitality revenue manager’s worst nightmares.
NB: This is an article from IDeaS
What’s even scarier is the continued use of dirty, under-qualified data by revenue management professionals in the hospitality and travel industries. In other words, these hospitality revenue management nightmares are coming true.
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As part of a recent study, research firm Gartner found that “Organizations attribute poor data quality as the cause of an average of $15 million in annual losses.”
Gartner also found that “60% of survey respondents did not track losses and, therefore, do not know what the impact [of poor data] is on their business.”
In the spirit of Halloween, I share three of the top revenue management nightmares (and survivor testimonials) faced by hospitality professionals.
Grab a flashlight. Here we go.
The exorcism of dirty data
Every exorcism movie teaches us that you first need to identify the possessing demons before expelling them.
If you think your data is haunted by inadequacy and misleading numbers, start by identifying if these three common data demons have infested the business.
Poor data input – Entering the wrong information into databases can cause nightmares. Incorrectly entered information includes incorrect booked dates (vs. stay dates), nationality (vs. country of sale), and incorrect marketing segmentation. Incorrectly entering these categories often leads to poor forecasting and costly revenue strategy mistakes, such as selling the wrong product at the wrong time through the wrong channel.Not tracking lost business – If your hospitality organization fails to track lost business from group wash, early departures, or cancellations, the perfect sellout is doomed. Tracking and forecasting lost business enables hotels to avoid unnecessary complimentary upgrades and aim for that ideal 100% occupancy.Tracking channels as a market segment. Each channel sells an array of rates, such as the Best Available Rate (BAR) and advanced purchase. Yet, we know that these two examples’ booking and buying behavior aren’t the same. When these two rates get segmented together, it becomes difficult to distinguish which of the rates is performing, which isn’t, and how to better sell each.
By implementing concrete data standards and best practices to improve data hygiene, hotels can expect revenue and market share growth resulting from better insights and precise strategy execution.
See how the Vineyard Hotel Group grew its RevPAR by 1.2% using the abovementioned methods.
The pricing “Pontianak”
Where I’m from, “Pontianaks” are murderous vampires with deceiving appearances that lure in victims. The same can be said for poor pricing structures that can cause hotels and hospitality businesses to bleed revenue and market share.
All revenue managers face the common challenge of obtaining quality research and analysis to determine the competitiveness of a proposed pricing structure within a market.
It’s also crucial (but often forgotten) to know the price sensitivity bands for each product. Investing the time to know the pricing bandwidth and not solely relying on gut feel would enable hotels to know their price limits without negatively impacting their brand and market positioning.
Frequent reviews of your structure against the marketplace and your booking data offer two ways to help you remain competitive and relevant, as was the case with the Ritz London.
Ghostbusting inefficiency with automation
In the 1980s, the Ghostbusters leveraged technology to capture and trap their ghostly encounters more efficiently.
But what ghosts haunt a hotel’s productivity?
One inefficiency that continues to bleed revenue managers is siloed data in different formats and independent systems.
For example, the spreadsheet reports to the property management system for rooms, and then a different point-of-sale system reports for restaurants.
Revenue managers then spend hours collecting the data from multiple sources.
Then, revenue managers spend even more time unifying reports, analyzing information, and producing the total revenue insights for single or multiple properties.
All this manual work is akin to the Mr. Stay Puft marshmallow man from Ghostbusters. The thing of comfort from Ray Stantz’s childhood turned into one of the most destructive ghosts faced by the Ghostbusters.
Leveraging analytics and advanced decision-making systems help hotels avoid leaving money on the table.
Automation not only collects and unifies data. It gives insights into revenue opportunities and regular updates to illuminate the most current state of business.
Automating basic revenue management tasks saves hotel and hospitality professionals valuable time and increases profit protection planning across the entire organization.
In the end, automation help hospitality leaders save time to focus on advancing total revenue strategies and align their teams toward common profit goals.
Wake up from your hotel revenue management nightmare
Hospitality organizations worldwide are leveraging the power of automated revenue management to overcome their worst nightmares, and you can too.
Wake up from your revenue nightmares by exploring the possibility of automated revenue management today.
The post Three Nightmares For Hotel Revenue Management Professionals appeared first on Revenue Hub.
