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that help co-ordinate sales at multiple proper- ties and synchronise with your property man- agement system (PMS). Today’s hoteliers are increasingly demand- ing fully integrated revenue systems encom- passing
automated controls, external data analysis, daily analytical updates, real- time decisions and optimisations. A sys- tem will usually forecast demand then make relevant demand and market pricing deci- sions, determine the optimal business mix, account for cancellations and non-arrivals, evaluate the profitability of business oppor- tunities, such as groups, conferences and events, and manage an increasingly complex distribution network.
Systems analyse big data by looking at,
for instance: ●Past occupancy rates ●Revenues ●Customer segmentation ●Market share information ●Customer satisfaction ●Past weather conditions ●Holidays and events ●Competitor activity and price information Nowadays, your revenue strategy needs to be particularly robust as demand is increas- ingly dependent on outside elements, such as customer reviews.
What’s hot Revenue management has evolved from managing transient rooms to total revenue
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“Along with data-driven decision-making capabilities, these systems can manage price changes, overbooking, marketing campaigns and strategic adjustments”
management across the organisation. This includes meetings, events and catering reve- nues, which can amount to as much as 60% of a hotel’s overall revenue (and in some cases, much higher).
The incorporation of social media metadata
into the revenue optimisation and manage- ment process is also more widespread now. Since early 2014, revenue software company IDeaS, for instance, has added online senti- ment – or opinion mining – into its system’s best available rate recommendations. From a distribution channel standpoint, travellers increasingly read online reviews or rely on recommendations from friends on where to stay. Embassy Suites Hotels’ 2013 Business Travel Survey showed that more than 75% of respondents said online reviews were “critical” when preparing for business travel. Note too that social media can even affect brand loyalty programs. Corr at IDeaS says:
“Shared content online can carry more weight than a loyalty card. Some guests will be unaf- fected by social media and will stay true to the brand; however, casual preferred-brand travellers will weigh social media versus brand loyalty and factor price heavier in their decision-making criteria.”
As most revenue managers now know, a bad review can cause an immediate drop in conversion, affecting booking windows and channel shift strategies. “Along with the changing demographics of travellers and the impact of social media on other channels, the impact goes beyond leisure rates booked directly or through OTAs and metasearch sites [Google Hotel Finder, Kayak, TripAdvi- sor and so on],” adds Corr.
Managing the OTAs
One big reason why your system needs to be solid is to balance the business you get from online travel agents (OTAs) and third parties. Many hoteliers are still paying 15%-30% commission to OTAs, so it is important to take a balanced approach. Consider this as a marketing or guest-acquisition cost that helps first-time guests to find your hotel and then book. After that, your own system needs to kick in to make sure they make return book- ings through your own site. You have a problem if past guests continue
to book your hotels through an OTA, or where OTA partners inflate the cost of pay-per-click (PPC) activity for a hotel by competitively
Technology Prospectus 2016 | 41
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