The end of the year may be fast approaching; however, skilled revenue managers have been reviewing the year ahead as each day rolls into system range.
While it is important to reflect on and analyse the impact historical yield and marketing strategies have had on your business, it is also important to jump into 2019 with excited anticipation as all the groundwork your revenue managers have been laying down will soon be coming to fruition.
To maintain a positive momentum into 2019, Ive highlighted 10 key areas of focus over the year ahead to help with your profit optimisation.
10 challenges to embrace for 2019
1 Whats your revenue optimisation plan?
Business may slow down a little as staff go on holidays during the festive seasons, however, revenue optimisation continues 24 hours a day, 7 days a week. Take time to ensure there is adequate coverage and outline key critical functions that must take place while your revenue strategy team may be on leave.
2 Channel costs and optimisation
Lets make 2019 your year to really get on top of all your distribution channels costs, including loyalty programs and direct booking channels. Understand your costs, economies of scale and improve knowledge on the type of customer each channel can and does attract. When, where and volume booked is absolutely critical information to ensure you are optimising the right mix of channels at the right time for your business.
3 Clean up your backyard
While a focus on costs is important, there is also a lot of work to be done in our own backyards from a revenue-leakage perspective, resulting in easy money walking out the door.
The 2019 challenge will be to tighten-up high yield spill, low yield spill, dilution and inventory spoilage, all of which results in millions of dollars in lost revenue each year. Also important will be to ensure that everything about your direct channels are providing the most favourable experience and at the very least offer perceived value for the customer.
4 Operational efficiencies
Legacy structures, legacy mind-sets and legacy software solutions must go! Review operational efficiencies and communication, book your own property to test the process, have a colleague stay and critique the in-house customer experience, ensure every revenue generating asset in your property and the staff that manage these have a revenue management mindset and work together.
5 Leverage the customer journey
Analyse the customer journey at all touch points and remember they will want to interact with you in different ways. Map out customer journeys and have offerings to entice them to book. Look at your property through fresh eyes, identify under-utilised assets, create a market and drive profits from them, this includes testing revenue management principles on food and beverage outlets and conferencing spaces (if you havent leveraged this already).
Invest in your people and this will lead to improved profits. The business discipline of revenue management demands highly skilled business analysts with exceptional skills in revenue management and distribution knowledge but they should also be experienced in data analysis, digital marketing, consumer psychology, critical thinking and innovation.
They must also possess exceptional communication skills to influence decisions by educating key stakeholders on their concepts and ideas. Appropriate education is key to develop and hone these skills as well as improving enablement and engagement.
7 Find your revenue rock star
Your organisation has a diverse talent pool mix and employees from across the business should be encouraged to contribute revenue generating ideas. The 2019 challenge is to put a call out to your staff for these ideas and at the same time identify the next revenue generating rock star in your property.
8 Psychological strategies
This really needs to move forward in leaps and bounds in 2019 for many properties. Increase your knowledge on pricing and consumer psychology and incorporate as many strategies as you can into your pricing structures, marketing campaigns, website copy and voice reservation scripts. It is time to shake things up with fresh eyes on all areas of your business including terms and conditions and policies.
9 Improve forecast accuracy and guest review scores
Forecasting and pricing are two critical functions of revenue management and requires the ability to determine demand projections at various price points at various times in the market across various distribution channels. Demand is also critically impacted by online reputation data, which in turn impacts forecast projections and price positioning. Forecast accuracy is a key performance indicator for revenue managers and assists in controlling operational costs, effectively determines displacement and calculates the value proposition of business across all channels at any given point in time.
10 Add layers to your data story
If you currently focus primarily on your own propertys internal KPIs and results to determine future strategy direction, then consider expanding your data sets to include market share benchmarking data and market share growth, competitive value assessment data and customer insight data by origin, booking source, total spend, lead time, length of stay, booking volume, booking placement and channel cost, you may find your initial strategy takes a whole new direction.
Although the changing booking landscape has caused disruption to the process of revenue management, an effective strategy is achievable, provided sufficient time is dedicated to the process.
Availability of time has always been a huge challenge for the revenue management process in the accommodation space, however, the fact remains that revenue management is not a set-and-forget process – it is a constant work in progress.
The good news with technological advancements is that we have access to so much more information to support and guide our analysis and decision-making.
We have the ability to learn so much more about our customers and their needs and wants than ever before and use this to our advantage, especially with creative price-driven initiatives and driving ancillary revenue still a large source of untapped revenue for many operators.
The integration of revenue teams with sales and marketing as one fluid unit is also incredibly important, as is education, to keep up with the pace of change.
The key is to also recognise and know your limitations, if you want the lolly shop but the budget wont allow for all the lollies you would like to stock, then partner with and foster good relationships with those that can take things further for you.