After ninety minutes of intensive debate and discussion, all agreed that change is driving hotels across all revenue and commercial functions at hotels, and will do so as far as the eye can see – with innovation the key to accelerated future progress.


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Selling the right room type at the right price


In 2017 the 142-bedroom Mandeville hotel in London decided to transition to a more advanced revenue management system – the IDeaS G3 RMS – after experiencing success with another IDeaS platform over the previous three years. “IDeaS RMS had worked


very well, but at some point, we realised we needed to be able to yield by room type,” says Enrique Pacheco, revenue manager at the Mandeville. The new functionality allows


Pacheco to boost the price for a particular room type without the rise being automatically applied to other categories. “If IDeaS G3 RMS detects high demand in a certain room type – for example,


with superior doubles – it will increase the price for that specific room type but leave deluxe rooms at the same rate,” he explains. “This seems obvious because this is what yielding is about, but no other system offered this functionality.” Since implementing the


new system, the hotel has enjoyed significant gains in performance. Senior managers noticed an instant improvement in ADR of around 3% —and a year later, ADR across all room types had risen to 5%. However, Pacheco did


face some challenges along the way. “I’ve occasionally had to explain some pricing decisions to my colleagues,”


catch-up when it comes to understanding the profile of their walk-in dining customers. “What are their preferences? How could they be enticed to visit regularly? How can hotel operators create attractive bun- dles and offers for diners? This customer segment is becoming a real growth area for hotels and would benefit from some revenue management focus.”


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he says. “For example, sometimes our deluxe rooms were actually cheaper than our superior doubles. This is all down to demand – more people wanted that specific room type, which quite rightly pushed up its price. “In this scenario, using IDeaS G3 RMS ensured we didn’t sell our superior doubles too quickly at the wrong price – and it encouraged guests to book the other room type that wasn’t moving. “Effectively, each room type


has its own best available rate, so we’re now selling more rooms at the correct rate, and we’re also avoiding overbooking a certain room type and then having to move guests to a bigger room.”


COMBINING TECH WITH EDUCATION For Kohlmayr, the biggest opportunity for 2020 is to ensure that when demand softens, the right strategies are in place to protect revenues.


“This requires close co-operation between


revenue management, marketing, sales and distribution, to not just maintain revenues but also find alternative revenue streams


to mitigate any downside risks,” he says, adding that this convergence is already start- ing to happen.


“Disparate technologies and systems are merging together at a pace unlike anything we have witnessed before and have had an enormous influence on the practice of reve- nue management. If you are not thinking of cloud-based, mobile-first and integrated tech- nology stacks, you are behind the curve. “As we see technology moving into the cloud, data becoming more accessible and generated at a higher frequency, we can also see a convergence in revenue management between pricing, distribution, marketing and loyalty. No longer is the revenue manager in a corner, crunching numbers. They are now tasked with leveraging the new capabilities of technology, AI and automation.” However, tech on its own won’t be enough, concludes Adams. “Developing a revenue management culture across the organisation is essential, with all teams understanding and buying into the concept.”


The breaking down of departmental silos


is a key element of this strategy, with data and information shared more openly across the commercial departments, such as marketing and finance as well as revenue management. “This requires not only appropriate tech- nology but education as well,” she says. “All too often training focuses on how to use the systems within the silos of the business and, while important, this should also be coupled with greater insight into the strategic impact of integrative revenue management strategies to deliver the greatest impact on profitability.”


Technology Prospectus 2020 | 17


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