Today we decided to look at the history and evolution of pricing in hotels and distribution. It used to be that hotels and resorts were rolling the dice in their efforts to meet guest room demand. Revenue management years ago only focused on one area: guest room revenue. When it was introduced to the hospitality industry, it was designed to fill rooms as quickly as possible. It had no real view to the long-term effects of these decisions. The role of a revenue strategist has evolved greatly over the last 30 years, and today it’s the priority of an entire team; a central part of operations that drive many decisions in cross-functional departments.
Revenue management, as we know it today, is more than just room revenue. It encompasses the full spend of the guest in all revenue centers including guest rooms, dining, retail and gaming spend. Knowing the potential demand for a given sales period is determined by many factors including historical trends, current events and the current pace of bookings, to name a few. The many tools used by leading revenue management companies can now assist hotels in all manner of ways. A leading revenue management technology can help put in place a range of strategies to help hotels deals with third-party booking sites, sales and marketing strategies and even assist in providing different levels of ongoing staff support.
Although business challenges continue to evolve, they still center on the need to increase profits, productivity and responsiveness to market changes while also improving the guest experience.
As guests are looking to their hotels and resorts to offer more services, the traditional PMS is becoming increasingly limited. It’s focused on only the details associated with the guest’s hotel stay – and that’s about where it stops. For years, this was all that was needed. But what about guests who don’t charge to their room, don’t partake of amenities and don’t dine on property? There’s a lot of missing detail, essential data that a traditional PMS simply doesn’t capture.
Hotels and resorts are switching to a real-time, data-driven Revenue Strategy – thanks to new cloud-based technology solutions. Properties with this ability can yield by market segment, distribution channel and room type. Moving away from “one size fits all” discounts off a fixed BAR (Best Available Rate) and instead generating personalized guest offers to reward loyal members or to spur direct bookings. This enables hotels to capture incremental revenue by adjusting rates when warranted. With this set of strategic data, businesses can offer personalized services to guests that result in the highest yield possible.