SUPPLIER OPINION
The changing face of revenue management in hospitality
IDeaS has led from the front when it comes to expanding revenue management for hospitality operators, says senior advisor Neil Corr
What is the norm today? Working closely alongside clients over the years, IDeaS has identified that successfully achieving total revenue performance requires not only looking at technology, but also look- ing at people and processes. IDeaS clients often express to us the challenges found around thinking about change management and the different structures, processes and approaches required to work effectively with technology. A common revenue management area of
focus that many hoteliers are addressing is today’s “big data challenge.” Hoteliers embark- ing on this challenge for the first time may begin by progressing from their manual and spreadsheet-based methods that exist in aid- ing business decisions. This progression often involves the utilisation of multiple data sources, and becomes extremely labour intensive with outputs that quickly become out of date. With revenue management maturity con- tinuing to develop, organisations are mov- ing towards an environment where decision support systems can be leveraged with more optimal effects. This entails more granular rec- ommendation outputs. More importantly, this also involves using more high-level analytical engines. Regardless of these requirements, some of these decisions may still fall short of fully embedding into a system’s optimisation or forecast, making the validation of the Return on Capital Employed (ROCE) difficult. Nowadays, the norm is the expectation of hospitality revenue management practition- ers to become innovators. But to achieve this recognition of innovation, fully integrated soft- ware systems are required. These capabilities, delivered by best-in- class systems, will enable revenue managers to move to a ‘managing by exception’ model. This empowers them to demonstrate strong performance measurement, a greater benefits estimation and accurate ROCE.
Innovations and the IDeaS approach IDeaS has been at the heart of revenue manage- ment developments (see timeline above, right) and driving innovation along the way. Revenue management has evolved significantly in the last few decades, with more hotels aspiring to achieve total revenue performance. The incorporation of social media metadata
into the revenue optimisation and manage- ment process can be seen in the latest inno- vations. IDeaS added online sentiment into its system’s Best Available Rate (BAR) recom- mendations in early 2014.
“The
incorporation of social media
metadata into the revenue optimisation and
management process can be seen in the latest
innovations”
The impact is clear from a distribution chan- nel standpoint as well. Travellers are becom- ing more attuned to reading online reviews or relying on recommendations from friends on where to stay. Embassy Suites released its 2013 business travel survey showing that over 75% of respondents indicated online reviews as “critical” when preparing for business travel. In any geography, some hotels are more appealing than others and will retain trav- ellers no matter what. However, hotels with superior reviews or social recommendations can begin to use that reputation to trump the flag outside the building for a growing group of influenced travellers.
How IDeaS systems help
There is an increasing pressure on providers to deliver enhanced capabilities in their solu- tions to cope with the increasing demands of revenue management objectives in hospital- ity today. IDeaS has reacted to these market requirements, which include: ●Forecasting total unconstrained demand ●Robust demand and market relevant pricing decisions
●Achieving optimal business mix ●Accounting for cancellations and non- arrivals
●Evaluating the profitability of groups, conferences and events
●Managing a complex distribution network
The ultimate goal for IDeaS clientele is ena- bling the organisation’s commercial leaders and revenue managers to focus on profit opti- misation: moving away from sifting through reports and complex spreadsheets towards a business environment where dynamic excep- tion alerts are the norm.
www.ideas.com
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