The importance of hospitality management is immense. And if you work in the hospitality industry, you must have heard or used the term “revenue management strategies.” The term “hotel revenue management” refers to a strategy for increasing a hotel’s revenue.
This process includes:
1. To forecast demand, use metrics related to hotel revenue.
2. Create a dynamic pricing model.
3. Increase the hotel or resort’s revenue as much as possible.
While revenue strategies are relevant to all industries, the hospitality sector is a better fit for the term because there are more factors under its control that can increase profits. These parts include varying levels of demand, fixed costs, and perishable inventory. Each of these factors can be predicted using the right data to discover the advantages of strategies.
Simply put, when it comes to pricing strategies, hotel revenue management strategies eliminate the risks of guesswork. Similar to revenue management in the hospitality industry, let’s get familiar with “Revenue Growth Management” also known as “Net Revenue Management”. It helps in boosting net revenue and helps in driving sustainable and profitable growth from your guests via many strategies like promotions, pricing, etc.
Key Statistics:
1. Revenue Management Market size was valued at US$ 14.98 billion in 2020.
2. The total revenue will grow at a CAGR of 9.7%.
3. Revenue Management market size will reach US$ 28.64 billion by 2027.
Below we will see how pricing and revenue management strategies can boost the asset value of your hotel and how.
Why Revenue Management Strategies Are Important for Hotels?
Image credit – Trekksoft.
What is revenue management in hotels? Revenue management is a process that helps a firm make the most of its profits. It helps them set their prices and handle their customer base. Revenue management and pricing in hotels are vital for success because it:
1. Allows them to identify the best time to sell rooms.
2. Helps to find out what the market value of a room is.
3. Manages the hotel revenue.
A hotel revenue management system helps hotels to make the most of their revenue. It helps them to optimize their popularity by pricing accurately and eliminating under or over-pricing. Hotel owners can use revenue management systems to make decisions about how to increase their revenue. It helps them track their revenues and makes informed plans for the future of their business.
Partner with Revnomix – The Best Revenue Management Company in India
How Revenue Management Strategies Can Maximize Asset Value for New Hotel Owners?
As the travel industry has been disrupted because of the pandemic, new markets and potential innovations are being explored. The hotel development and investment pipeline have also been impacted by it. As firms struggle to deal with delaying or scrapping projects, hotels are running on discounted prices.
It’s not risk-free to invest in hotels. They need a lot of capital and thorough research in order to succeed in normal conditions. They certainly won’t do well during a sustained downturn. Hotel owners and investors need to always be aware of their market rivals and revenue management strategies. These should vary as per the hotel’s location, room type, size, etc.
These days, it’s vital to take your hotel beyond being merely appealing and providing stellar service. With the right financial and marketing strategy of a hotel to support new guests, you’ll be able to ensure long-term success. How often should a marketing plan be revisited? The marketing plan should be visited quarterly to ensure that you tweak your strategy. Searching for the best hotel marketing company? Keep reading.
Here are some ways in which revenue management for the hospitality industry can maximize asset value for new hotel owners today.
Leverage The Power of Data Today!
1) Attract the right business for your new asset
Image credit – Vipecloud.
Hotel owners are focused on increasing revenue and managing inventory in a way that maximizes their profits. Revenue management is based on setting prices of hotel rooms and managing inventory to maximize total revenue while minimizing cost and risk.
But it is crucial to remember that in order to maintain profit, hotels need to have sound revenue management strategies. Without them, the hotel will be able to sell out for a lower price which makes the asset undervalued.
To maximize the value of your hotel, it is vital to know the level of profit made by each part of the business. By managing each aspect, there is no limit to what a hotel can achieve. Attracting the right business to your hotel with the highest value will be the best for your investment.
2) Improve asset performance with revenue management
Image credit – Mckinsey.
A revenue strategy helps a new hotel realize more revenue by using data analysis to know guest preferences. It is vital to think about your revenue management systems early or as you build the hotel. It could be helpful if you consider investing in one, as it will save you time and effort during various stages of the long-term business.
Hotel owners can benefit from revenue management strategies across the hotel. It can help mitigate risk, reduce costs, and increase efficiency. Having multiple hotels with revenue management standards in place allows you to have a more focused approach and can provide better results with the right revenue management tools.
One of the many tasks of a revenue team is collecting data and analyzing it. Apart from that, revenue management’s primary focus is driving profits. It can happen through increasing sales, cutting expenses, and optimizing performance.
Revenue management is key because it can allow you to take strategic decisions, know the market, and anticipate changes. All of these need to be done in order to build a successful business. Having a focus on strategy over reports will help your hotel stand out in the market and be stronger over time.
3) Boost your bottom line
Data analytics and business intelligence are used to forecast.
Image credit – Markrs.co
Revenue management strategies can help increase the value of a new hotel or group by using key insights. It also sharpens deep analytical skills, data sources, and data modeling.
An accurate and reliable forecast prevents your hotel from making costly mistakes. A speedy or timely forecast allows you to stay ahead of your rivals and plan efficiently. While agility helps you manage unexpected changes and adjust quickly in the face of challenges as well.
Forecasts help your hotel stay organized and on top of crucial expenses and revenues. The benefits of these services add to the bottom line and increase asset value for all. Data from inaccurate forecasts can lead to bad decisions and missed targets which could end up lowering future asset value.
Know More About Our Clients & Their Revenue Management Solutions
4) Keep a holistic approach to revenue management
The interest of business travelers in buying ancillary services.
Image credit – iSeatz.
The revenue management concept cannot be limited to a tactical strategy for managing and pricing rooms. The industry needs to approach revenue management in a holistic way because practice and tech have advanced. Simply put, users reap real benefits when they do more than just find the lowest hotel room rate.
All facets of a hotel should involve modern revenue management strategies. They should broaden their horizons by focusing on group business, ancillary revenues, etc. To ensure that there is a clear focus on profit, and not just revenue, wise revenue management companies for hotels will take into account and analyze not just revenue, but also costs.
Hotel owners don’t need to be involved in a hotel’s day-to-day operations. But it is crucial that they assist in sharing the hotel’s overall goals. If the hotel is a brand-new asset, the owner’s goal might be to quickly return the investment by selling the asset after only a few years of profits and operations. To help the hotel achieve these goals, this plan would need to be discussed with the revenue management division and integrated into the overall strategy to get a high and early payout on your asset value.
5) Invest in revenue management at the right time
Image credit – Phocuswright.
The advantages of strategic planning are many. It’s crucial to invest in revenue management from the start of the planning process, even before a hotel opens its doors to the public. A hotel’s direction and the steps it will take to get there are made clear to everyone when an effective revenue management culture is created early in the hotel’s lifecycle. This makes it simple and fast to get a return on tech investment.
The best time to add revenue management is during the investment stage because it can be fully used through feasibility studies, projections, and the resulting flow-through. It can be used to create a long-term action plan and set strategies to grow your asset value as well.
Given the potential revenue increase, hotel owners should take benefit from the chance to become involved in the following.
1. Revenue management principles.
2. Creating a culture of revenue awareness.
3. Putting those processes in place all across their hotels.
Hotels can start increasing their returns and the lifetime value of their hotels and guests by using these five ways of revenue management strategies.
[Also Read: Ultimate Guide to Revenue Management Strategies for Hotels in 2022]
How Can Revnomix Solutions Help with Revenue Management Strategies?
Do you want to know about the top hotel consultants in India to increase your hotel revenue and value? Revnomix Hotel Data Analytics provides streamlined solutions to hotels to process data, make informed decisions and grow their business. We use our expert skill sets, the most recent tech, and 24/7 customer service to make the process of data analysis and revenue management seamless for our clients.
Meet Your Revenue Management Team
Revnomix Solutions is one of the leading providers of hotel revenue management strategies. These methods help reduce costs, maximize revenue, and automate processes so you have more time to focus on other areas of your hotel. We integrate AI and machine learning into your business model.
If you’re looking to improve your hotel’s profits, then a Revenue Management System (RMS) is the way to go. There are many out there from which you can choose, but make sure that you only work with the best of the best. RevSeed is one of the leading revenue management software for hotels.
RevSeed is a software that helps with hotel revenue management services and data analytics. It is designed to take the world of hotel service management to a whole new level. It connects hotels with guests, evaluates the success of each sector, and offers the best solutions.
How RevSeed works?
It offers a channel manager that forecasts data and comes up with accurate pricing of the hotel rooms as per the market and rivals. These prices are then allotted to the hotel website, and OTAs like Booking.com, Expedia, and more.
[Also Read: Ultimate Guide for Strategy Management Plan with RevSeed]
Revenue Management Strategies Are Changing the Hospitality Industry
Pricing decisions are one of the most difficult aspects of running a hotel. It is challenging to make even a single decision accurately as well. In order to execute successful revenue management strategies, you need the right tools. Investing in the right tools is a vital part of any hotel.
Hotels that are facing some difficulties lately are turning to the use of revenue management software. It allows hotels to add more value, maintain stability, and more.
Revenue management systems provide your hotel with insights into its strategies and help the business to grow. It is more accurate than manual methods, allowing for a better knowledge of these strategies. With so many ways to drive your hotel, having software that can help you optimize your revenue is more crucial than ever.
Looking for hotel management services or revenue management companies in India? Revnomix Solutions has worked with big hotels like Hyatt, Ramada, Ole Sereni, and more. So, why hire a hotel revenue manager? Save time & effort by making use of a dedicated team! Contact us to increase your revenue and profits.
Summary
Article Name
5 Ways to Boost Hotel Value with Revenue Management Strategies
Description
Revenue management strategies by Revnomix can maximize asset value for new hotels as it helps you attract the right business, boosts your bottom line & more
Publisher Name
Revnomix Solutions
Publisher Logo
