As the travel industry rebounds from the Covid-19 pandemic, accommodation operators around the world are beginning to see green shoots of demand. With occupancy and daily rates beginning to rise back towards pre-pandemic levels, revenue leaders have their sights set on maximising revenue performance to make up for previous lost earnings.
But the world has changed considerably in the years since the pandemic began and traditional revenue management practices that rely on historical data have proven unfit for today’s unpredictable demand conditions. As such, a shift to revenue performance – maximising demand, revenue and profitability through the use of forward-looking market insights and demand indicators – has become essential. Operators have found it increasingly necessary to use metrics such as search demand, current market occupancy and market occupancy forecast to identify patterns of behaviour from which they can make more informed pricing decisions.
We spoke to 200 revenue leaders across the globe to better understand how leveraging technology with a revenue performance, rather than a traditional approach, can help hoteliers and other accommodation providers navigate price and planning decisions in today’s fluctuating market context. Here are some of the key lessons.
● Stay informed and stay ahead. Understand your competitive landscape, how it may have changed since the onset of the pandemic, when potential customers search and book, and stay informed of changes in your market so that you know how and when to take action.
● Spot opportunities in the market. Identify dates which stand out and review how your price is positioned in comparison to your competitors.
● Get price and market intelligence to capture more bookings. Ensure your pricing optimisations are made in the context of what’s happening in the market by reviewing the search demand, market occupancy and the average competitive prices.
● Review performance to know if your property is ahead or behind the market. By analysing competitive price intelligence and market performance data together you can better understand when customers are booking and what price they are responding to.
● Investigate further to target more customers. Look at competitor rate details such as cancellation policies and promotions before taking action and if in doubt, wait and review again tomorrow.
● Take action before it’s too late. Whatever action you decide to take, whether it’s increasing prices or offering greater flexibility in cancellation policies, consider the impact of your actions and update your forecast accordingly.
● If you don’t have the technology, get it somewhere else. Staying on top of and analysing the range of data required for an effective revenue performance approach takes sophisticated technology. For operations that don’t have the resources or in-house expertise, they can access this technology through third parties. For example, hotels can outsource revenue management. Another example is Expedia Group’s Rev+ solution, which is accessible to all its partners as it tries to democratise access to revenue performance technology.
In today’s rapidly fluctuating market, optimising revenue performance through analysis of forward-looking metrics and indicators is more important than ever. Without access to sophisticated revenue performance technology that can help predict trends, hoteliers will be comprehensively beaten at the pricing game by larger or more savvy competitors. But with the right solutions and tactics, revenue managers can help mitigate loss, drive demand, and position their properties for success post-crisis.
Written by Chris Baniewicz, Partner Revenue Performance Manager, Expedia Group
