In today’s fast paced hospitality industry, disciplines such as revenue management, digital marketing and distribution are persistently evolving and converging and this dynamically changing environment places a long list of demands on hotels. New advertising models, colossal ad budgets and a prerequisite for interesting content in bulk all contribute to the challenge of driving direct bookings to the hotel’s brand website.
Revenue management is also becoming more strategic. Today, it encompasses multiple revenue generation routes that span pricing, forecasting, budgeting and marketing. This new, more complex hotel revenue management landscape is throwing up a few hurdles such as:
- A lack of competent revenue managers
- Increased competition
- Supply constraints
- Pressure to cut costs from proprietors.
Hoteliers have to deploy new skills in management, performance measurement and technologies to overcome these challenges. Additionally, a revenue manager has to accomplish two critical tasks in order to maximize chain revenue:
- Develop effective rates and strategies to boost the hotel’s top-line
- Create and maintain a revenue management culture.
Increasingly, pragmatic technology and tools can be applied to stabilize revenue streams and optimize rates. Today hoteliers can call on robust technology like big data analytics to unleash new data driven insights that enable them to build and maintain strong customer relationships. More and more, technology sits at the heart of any agile strategy aiming to drive great ROI.
Roles taken up by revenue and digital marketing managers
A revenue manager is the first to successfully crack the target market and purchase behavior code. Naturally, they are well-positioned as far as developing an online marketing strategy is concerned. Leadership in the field of revenue management always stays in a multi-functional world, so they generally inculcate new skills arising from some of the following questions:
- Are the OTAs my toughest competition?
- What are the gaps and how can I measure them in digital marketing and online distribution?
- What new technology and performance benchmarks need to be implemented?
- How can the distribution landscape be optimized?
Revenue managers are the people who turn around a hotel’s overall performance after interacting with sales/marketing managers for further amendments. Some important reasons why revenue managers should work closely with digital marketers are:
- Firstly, digital marketers access valuable website data that can determine “early signs” of future demands and roll out future promotional offers. This data lets RMs sharpen their action plans.
- Secondly, they share data and joint metrics (such as key metrics and tools like re-targeting, RevPAR and search engine optimization) to measure performance.
- Thirdly, bi-annual joint presentations can be rolled out to help all other departments review past results, trends and opportunities within the hotel.
- Finally, a digital media calendar can be published to come up with an organized pricing and inventory decision approach.
In the long run, revenue managers and digital marketing managers can work hand-in-hand to address the new challenges in hospitality. Hence the entire drill discussed above can eventually win the hearts and wallets of travelers across the globe. That’s how revenue management policies can successfully link intangible digital marketing disciplines to a hotel’s overall profitability.
In addition to the convergence of revenue management and digital marketing, there is a need for seamless synergies across a hotel’s different departments: marketing, revenue management, finance, development and operations. The process of revenue management must be automated to let revenue managers and marketers come up with a robust strategy and methodology.
About the author
Bhanu Chopra is the CEO of RateGain, a hospitality software-as-a-service business he founded in 2004. Today, RateGain is a leader in hospitality and travel technology solutions for revenue management decision support using scientiﬁc pricing methodologies, rate intelligence, seamless electronic distribution and brand engagement. RateGain has over 12,000 global clients who maximize their revenue everyday using over 200 million rate notiﬁcations and half a billion inventory updates each year that RateGain facilitates. RateGain’s clients include independent hotels, chains and brands, e-retail clients like online travel agents, wholesalers, tour operators, car-rental agencies, airlines and cruise lines. RateGain has 550+ employees based across various oﬃces in the UK, US, India, Spain, Brazil, UAE and Thailand.
Bhanu has a master degree from Indiana University Bloomington in Finance and Computer Science. He started his career at Deloitte Consulting serving several Fortune 500 companies by helping them with their ERP, SAP, systems integration and overall IT strategy. Prior to setting up RateGain, he also co-founded Riv Consulting, a company that helped organizations with systems integration on CRM software like Broad VISION. A highly sought-after speaker, he has spoken at various HSMAI events, The Hotel Technology Conference, the China Low Cost Airline Summit, Independent Hotel Show, etc. He has also been proﬁled on the Young Turks program of CNBCTV18 is a contributor to publications like ‘Entrepreneur’ and ‘The Economic Times’.