Revenue Management Strategies for Your Hospitality Property

02nd Jul 2019

This video posted by Keystone Hospitality Property Development

 The core approach to revenue management is to optimize the turnover of your hotel’s inventory at the optimal price. And by inventory, we mean everything you sell to a guest, including rooms, food & beverage (F&B), spa & wellness, a golf course if you have one, special events, and even car parking if you charge for it.

Hotel revenue management is a process that involves controlling and optimizing all revenue sources. Among these, revenues from room and meeting room rentals, restaurant services, and ancillary offerings are key. In essence, hotel revenue management ensures that the hotel makes as much money as possible by maximizing sales, optimizing pricing, conducting competitive marketing strategies, and making data-driven business decisions.

As part of hotel revenue management, data analysis plays a key role. Hotel owners and managers need to continuously monitor data on room utilization, number of reservations, pricing, sales performance, and competition in the market. Based on the information gathered, they can change strategies, such as adjusting prices, package deals, or promotions, to attract customers and increase revenues.

Undoubtedly, nowadays, hotel revenue management is increasingly complex due to high competition and the availability of advanced technology. Hotel owners must skillfully analyze data and be familiar with marketing, technology, and customer relations. Therefore, modern technology and revenue management systems can be vital to achieving success and increasing revenue in the hotel industry.

Efficiently managing rates and availability while watching on all the different key performance markers takes training and talent. You need to understand revenue management and I’m here to guide you. Your guest room is a perishable product. For this reason, pricing and customer happiness remain an extremely important variable along with a well-organized revenue management strategy.  It’s important to note here that ‘optimal’ price may not necessarily mean the highest price. For a successful business, there’s often a balance to be struck depending on market conditions, including elements like seasonal demand – for example in low season a hotel will generally focus on optimizing the use of its room inventory, whereas in high season or during demand peaks the revenue manager can look for revenue opportunities more focused on price. We will talk more about these types of strategies later.

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