More and more hotel owners are realizing the value of revenue management. It was a long time in coming though. For many, they believe that managing their revenues was a “waste of time” or something they would “look into someday.” Savvy owners are quickly finding that being strategic and educated when it comes to managing revenue is a critical component of maximizing the complete revenue.
Sometimes the negative stance regarding a solid revenue management program comes from a property’s management. Though this may seem odd, it stands to reason. They are normally busy doing their day-to-day running of the hotel and the last thing they want is something added to their plate. Plus, when a business owner is intent on revenue and building it effectively, they can change the structure of the team to maximize efficiencies. Wise hotel owners however, understand that managing revenue is not a wasted activity; rather, it is a money-building investment.
Though implementing a plan to start revenue management can be harrowing, at its full potential it improves efficiency of the entire operation—both financially and work-wise. For example, if a hotel’s management team can accurately project bookings, they can ensure that the right number of workers are on cite that day/s to properly service the customers. They won’t over-employ (lose money) or under-employ (lose their level of customer service.)
Understanding the critical nature of keeping customers happy is a huge part of managing efficient revenues. By looking at booking patterns, an owner can undercover the move valuable market segment for his established hotel. For instance, let’s say a hotel normally books on weekends and attracts middle-class-income customers. There is no value in advertising to big-budget clients who want luxury 5-star accommodations. Its revenue is better served speaking directly to the market it is attracting naturally and capitalizing on the segment.
Beyond customers, revenue management also allows money to flow to the proper areas of the hotel business. Maximizing customers means maximizing income. Maximizing income means more revenue to channel into reinvestments to the hotel for better services and products. That in turn, can increase the customer base. The value of working with revenue and proactively planning it comes full circle.
Revenue management is a useful tool to not only maximize production, but to stand apart from hotel owners who have not yet discovered it. In any business sector, finding an edge over competition is a way to separate a brand from the masses.
In the hotel business, it is critical. Just think of how many options people have when it comes to booking rooms at a hotel. With thousands of competitors, all hotel owners need to focus on their competitive edge. Revenue management may be the one thing that truly sets them apart and allows them to continuously thrive.