Posted January 27th, 2016
Yield management is hardly a new concept. Airlines have been using supply and demand data to maximize their revenues and profitability for decades. A fast-growing number of hotels, resorts and other lodging properties have followed suit with their own variation of the game. In most cases, their efforts have been a resounding success and their technology investments in what is commonly known as Hospitality Revenue Management have paid off in spades.
Hospitality Revenue Management is fueled by the rapid growth of big data processing, advanced analytics, demand forecasting and pricing optimization models and next-generation technology platforms. These combined capabilities and technologies are helping to automate the pricing recommendations and decision-making processes that enable not only better inventory management and increased room occupancy, but higher revenues and profitability across all parts of the hotel, resort or other lodging property.
In recent years, Hospitality Revenue Management has gone from being an undertaking with uncertain financial upside potential to being a strategic imperative with predictable revenue outcomes. Indeed, when properly executed, the practice can be used to deliver very substantial increases in top-line revenue growth and profitability. In fact, according to research conducted for this Smart Decision Guide, the implementation of Hospitality Revenue Management results in a 9 percent average increase in revenue per available room (RevPAR) for large and very large hotels. That percentage increase can translate into millions of dollars in additional profit on an annual basis.
The 2016 Smart Decision Guide to Hospitality Revenue Management seeks to educate hotel and resort owners, operators, property managers and others who aim to bring the science of next-generation Hospitality Revenue Management to their businesses.
Just to be clear, the goal is not to teach pricing strategies or forecasting techniques. The nuts and bolts of how to apply the principles of capacity management and duration control or use displacement analysis to calculate group rates or develop rate fences is not the focus of this Smart Decision Guide. There are educational programs specially designed for that purpose, some offering a large curriculum of related coursework. There is also a sizable body of literature on the topic authored by industry practitioners, solution providers, consultants and academics, many of them sporting PhDs in statistical analysis and computational and behavioral science.
That said, gaining expertise in Hospitality Revenue Management generally requires that one not only acquire the requisite knowledge base but also actually spend time practicing revenue management in a real-life hotel environment.
The 2016 Smart Decision Guide to Hospitality Revenue Management provides a roadmap for achieving increased hotel revenue and profitability by leveraging next-generation revenue management technologies and capabilities. The key takeaways include insights for evaluating and selecting the right solution and/or services in the context of a hotel or resort’s specific needs. It also includes practical advice for putting the right organizational resources, business processes and performance metrics in place to help ensure continuous performance improvement.