10 Revenue Management tips

While perusing the aisles of a retail store the other day, I walked past a couple eyeing a display of discount electronics with some interest.

“Think Jerry would like this?” the man said to his wife, picking up an item.

“I guess so,” she said quizzically. “But what for?”

“His birthday,” the man replied.

“His birthday? Wasn’t that months ago?” she asked.

“Well yeah—in May.” He paused. “Better late than never, I guess.”

In a similar vein, I just found an e-mail incubating in my inbox that I’ve been meaning to cover for more than a month. For an online journalist, a month might as well be an eternity. (I can hear my managing editor grinding her teeth as she reads this.) But hey, better late than never, right?

The e-mail outlines the top 10 revenue management tips for independent hoteliers—though I would argue it’s something every revenue manager should consider. Full disclosure: The info comes from Evolution, a revenue manager service provider. But like I’ve already mentioned, the content bares mentioning.

1. Everyone’s listening. Facebook and Twitter are important, but don’t forget that Internet itself can be social media. There are infinite channels to track your brand or distribute to potential guests. Revenue managers often don’t have the time to monitor every one, but that’s no excuse to neglect them all. Implement an effective social media strategy to monitor what your resources allow.

2. Choose the right distribution channels. The idea is a no-brainer, but effective implementation is a bit trickier. Consider: channel distribution potential, distribution spread and cost, ease of channel management, marketing exposures, technology used.

3. Invest in your own website. Your most important distribution channel is your own website. Is your site optimized for SEO or pay-per-click campaigns? Identify what keywords your audience is searching for based on demand, season or market influences, and make sure your webmaster is following through in implementation.

4. Value is king. In a price-sensitive market, value is the most important factor for guests. That doesn’t mean you have to sacrifice rates, however. Develop value-add packages and length-of-stay discounts.

5. Better relationships mean better profits. Don’t try to do everything on your own. Invest time in building strong relationships with all of your distribution partners including online travel agents, consortia programs and corporate accounts.

6. Know thy audience. As the economy emerges from recession, the booking and travel habits of your target market might evolve. Are you targeting the right clientele? Could you attract higher spenders? Once you’ve identified your target market, look at how they book their holidays: Are they booking last minute or are they looking for early bird deals?

7. Look to the future. It’s important to look ahead and understand how economic and seasonal changes will affect the way people book your hotel. Respond to changes with targeted and differentiated rates and packages such as attractive last-minute offers.

8. Make sure you’re in the loop. The world of revenue management is constantly evolving and is more competitive than ever. Stay ahead of the fast-paced nature of the industry by attending conferences, events, seminars and trainings.

9. Dare to take risks. Revenue management is all about selling the right room, to the right customer, at the right time and for the right price. Getting this all right involves taking a few risks. Just make sure you’ve thought about the consequences, and, if it goes wrong, learn from your mistakes.

10. Set your targets and budgets early. Now is the time to set your revenue management targets and budgets for next year. Don’t do all the work yourself, though. Collaborate with other departments and always communicate your revenue management objectives to your colleagues—in particular the sales department to ensure you are all working towards the same goals.