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Article by Ahmed Mahmoud

The Future of Revenue Management with the OTA's Part II, Rev+ by Expedia

Revenue Your Hotel 22 February 2019
In our previous article, The Future of Revenue Management with the OTA's we highlight the rules of revenue management, and the professionals who practice it on an almost-continuous basis. The role of OTAs and online distribution in revenue maximization has gained unprecedented importance. Of lately, hotels have started implementing formal revenue management guidelines, roping in committed professionals to sharpen and focus their revenue generation processes and augmenting their profitability. Hotels are using advanced travel technology tools for handling their hotel revenue management.The role of Expedia in Revenue Management System Managing rates and keeping your hotel on top of competitors in the hotel industry is difficult. Rather encouragingly, the OTAs appear to be taking note of this with Expedia the latest to jump on the revenue management tools.As a global business with more than 200 travel-booking sites globally and nearly 385,000 lodging partners worldwide, Expedia has the necessary scale to provide partners with comprehensive and accurate analysis that makes a difference to their business. In 2016 Expedia launched Rev+, a revenue management system allows hotels to gauge their rates against competitors over the course of 90 days, alongside other market factors with A forecasting tool will allow properties to view demand for a market based on data points captured across the portfolio of Expedia Inc. brands, whilst a notification system will alert hotels to changes to rates over the course of the last 24 hours. Along with three great guides to help growing the direct bookings: a cheatsheet with 10 metrics to improve hotel distribution activity, using hotel apps to build loyalty, and an analysis on how to keep the customer at the heart of your business.Rev+ is a revenue management tool designed to provide actionable data and insights to empower partners to make smart decisions to optimize their revenue. Rev+, an essential tool for revenue managers, comes at no additional costs for hotel partners, and does not require additional sign-up.Current features for Rev+ by Expedia includes:Price Calendar: A comprehensive view of a hotel's pricing relative to their competitive set you now have the option to view your property's pricing data by any seven days, a full month or the next 365 days.With more enhancement, Expedia created the 7-Day graph view that makes it easier to follow key pricing and demand metrics, showcased in a graph format. It also enables revenue managers to overlay booking performance on top of the public data displayed to compare how demand and pricing impact performance. The 7-Day view is available for any 7-Day period in the upcoming 12 months, not just preset week views.Price Optimization: With price alerts color-coded, quickly learn which days your price may be too high (orange) or too low (teal) vs. your competitive set.Market Demand Score: Hoteliers can view future demand for their market based on millions data points from the Expedia, Inc. family of websites and it's affiliations.Market Occupancy Forecast: This feature replaced Market Demand Score to provide more information about compression. Expedia data analysis can estimate how many rooms will be sold in a destination, on a specific date, in the future.Daily Market Alerts: An alert system that helps Hotels to find the most recent and relevant changes in their market or it is a notification to the hotels of changes to public prices in their market within the past 24 hours.Alerts: Or Priority Dates , at a quick glance, to know which days have alerts, for example, events you should be aware of which might be in high demand or low demand i.e. new year eve so hotels can take actions for the price strategy .With the alerts for competitive set price changes, market's occupancy and opportunities for optimizing your prices, the alert can be set to receive it inbox by mail at least once a week, you can view alerts in your inbox and decide if you need to login to Rev+ to further analyze your hotel pricing strategy and possibly to take next steps of actions for your hotel pricing strategy.Revenue managers even can decide which alerts they want to receive and how often by customizing the Market Alerts.Daily Snapshot: Additional insights about what is happening on a specific day; including forecasted demand and know events.Average Competitive Set Rate: Or Competitive Price Grid where hotels can know and follow competitive set's rates are low or high and follow the pricing trends for the market over the next 365 days.Market Occupancy Forecast: In Graph view or Heat Map view, see what the market compression or occupancy looks like over the course of the next year.My Property's Rate: See how your daily rate compares to the rates on other days at your property.Price Optimization: A feature that alerts revenue managers when hotel price could be optimized for that day to help improve the revenue performance.Property Analytics: A feature that helping revenue managers to create a more intelligent marketplace by providing relevant data to help better run business from revenue managers point of view. This flexible reporting tool allows monitoring the property's revenue performance in the marketplace and among competitors.Property Analytics evaluates three primary metrics to track and compare revenue performance and suggest actionable items to address concerns: Visibility - to See how your property is showing up on Expedia Group sites and learn about tools to help get seen more often. Conversion - When travelers view your property, make sure they like what they see and want to book a stay. Guest Value - Per guest, revenue varies. Appeal to the highest value travelers with valuable tools and add-ons services.The Rev+ tool continues to become more intuitive with every new enhancement version so revenue managers can better understand and interpret the data being highlighted their property. With the new design, Rev+ it brings focus to features and details that aim to help revenue managers to improve revenue performance in a clear, direct manner. In addition to that, Rev+ now automatically highlights details in the market around occupancy, pricing and events, providing insights into hotel's performance, with more accuracy than ever before, Highly engaged Rev+ users saw an average 10% incremental revenue growth.Although Hotel revenue management is all about supplying and selling the Right Room to the Right Client at the Right Moment at the Right Price, in order to best meet market demand, but hotels have always faced the issue of perishability. An empty room from yesterday cannot be sold today, or an empty room doesn't generate revenue. In addition, with more competitors and channels than ever before, hotel revenue management solutions have never been so important for dealing with increasingly dynamic market conditions.Revenue management helps to predict consumer demand to optimize inventory and price availability in order to maximize revenue growth. The purpose of Revenue Management is not selling a room today at a low price to sell it tomorrow at a higher price. Revenue Management also means selling a room at low price today if you do not expect higher demand. Revenue Management challenges the resources in the importance of gathering information about the market so that you can be proactive and not reactive.By understanding the market and the factors that affect hotel demand forecasting, understanding your hotel booking patterns, your hotel position in the market in relation to your competitors, and future events, you can create your own hotel revenue management strategies for optimizing your performance by increasing revenue, occupancy and your RevPar index.Hoteliers need to remember that OTA's want to increase the number of reservations, room nights and revenue they sell in each market. They want to book more rooms in your hotel than their competitor OTA's which mean a high commission for them.
Article by Ahmed Mahmoud

The Future of Revenue Management with the OTA's

Revenue Your Hotel 10 February 2019
Nowadays hotel revenue management has become a somewhat controversial buzzword in hotel industry, back in the day, revenue management meant opening and closing availability and rates. When Online Travel Agents entered the scene, the industry became obsessed with simple adjustments of rates. Today, the playing field is drastically more complex. Modern revenue managers are experts at analyzing, forecasting, and optimizing hotel inventory through availability restrictions and dynamic rates and have, appropriately enough, become instrumental in managing a hotel's demand.With the evolve of RM keep this fact in mind. Only 12,000-15,000 hotels in the world today use a major (RMS) tool. The rest of the 500,000+ hotels out there are using either something their chains developed or their own customized Excel spreadsheet as their RMS tool.Hotels that are not using a RMS tool now will begin adopting solutions over the next five years at a much faster rate than they have over the past ten years. And RMS tools developed by the chains will have to embrace innovation in the same way RMS providers will, and this is not until even more recently have hotels begun to implement formal revenue management policies, programs and systems. Fueled by technology, the field is now a true science. Increasingly powerful computer systems can handle many tasks essential for revenue management. The growth and proliferation of the Internet has changed core communications for travelers and hotels alike.Whereas early on in the era of hotel bookings reservations were either made directly (telephoning the property/face to face) or via a travel agent, over the past few decades a larger offer of booking channels has emerged, The OTA segment is becoming a strong competitor to the individual booking sector and distribution channels; it has already taken substantial share from traditional contracted booking channels, mainly wholesalers and tour Operators.Amid these developments, the online travel agency (OTA) has arisen, changing the rules of revenue management - and the professionals who practice it - on an almost-continuous basis. The role of OTAs and online distribution in revenue maximization has gained unprecedented importance. Of lately, hotels have started implementing formal revenue management guidelines, roping in committed professionals to sharpen and focus their revenue generation processes and augmenting their profitability. Hotels are using advanced travel technology tools for handling their hotel revenue management.When we talk about OTA's They refer to Online Travel Agencies and some of the most popular ones are Expedia, Priceline, Orbitz, Booking.com, Hotels.com and OneTravel, among many others. The main goal of these organizations is to sell hoteliers the idea that OTAs are a great showcase for their businesses and, therefore, an aid to increase sells-in other words, it generates more exposure of your brand and products than the one you could create on your own. The trick? High commissions and a series of other medium and long-term side effects that you would possibly want to avoid in your business.OTAs have emerged as one of the most prominently online distribution channels among different sales channels for revenue generation, although hotels have to shell out chunks of their money to OTAs in the form of commissions. Approximately 60% of travelers comparison-shop rooms before booking, which makes OTAs a popular place to do business. In fact, the hotel industry has realized that OTAs and hotels exist in a symbiotic relationship, nurturing and supporting each other for mutual growth. Factors like OTAs have a much bigger advertising budget, access to more traveler data and more success in drawing in online traffic are the main reasons hotels are choosing OTAs as online distribution partners.Of course, OTAs have a different attitude. i.e. Expedia, Inc.'s stance is that hotels can benefit from the $3.4 billion it spends on marketing each year, OTAs can entice a different kind of customer than a hotel can. To that end, Expedia gives client hotels access to revenue-management tools through Expedia Partner Central, The OTA spent almost $830 million last year on technology alone, moving toward this launch. Now, hotels have total control over their listing, including the ability to load photos and text, see competitors' rates and spot forecasted demand in a particular city.In today's highly fragmented marketplace, competition is intense and hoteliers are constantly on the lookout for better ways to optimize their revenue. With OTA dominance continuing to grow, revenue management offers properties the opportunity to take control of their profitability.Maximizing your hotel's revenue isn't a matter of simply focusing on selling out all room in your property - those days are long gone! In today's highly competitive marketplace, strategizing to maximize occupancy over revenue could actually be detrimental to your bottom-line. Indeed, hotels that undercut their prices to sell out could actually be earning less than similar properties that employ revenue management strategies.When OTA's realized how much influence they made on the hospitality industry and it became not only a booking and distribution channels, they started to involve more and more even in the daily hotel business starting from the hotel customers behavior up to the hotel rating, take a while and think of the below and how influence become the OTA's on the hotel industry:-Guest reviewHotel ratingHotel rankingRate strategyDynamic pricingRate parityMobile searchCommunicationMarketingThe list can be extend to reach to much more, however fulfilling the job of revenue manager has never been easy. As technology advances, more OTAs come on the market, and the sales distribution channel picture becomes increasingly more complex, this fact will not change. Revenue management will need to be at once more rigorous and more flexible, working in parallel with the changing nature of OTAs.This mean that OTAs is occupy a critical spot in the revenue management mix. It does mean that their role is changing in some key ways, and that the future will likely bring changes the industry cannot yet imagine.
Article by Ahmed Mahmoud

The future of Revenue Management leadership: What should Revenue Manager know?

Revenue Your Hotel 6 February 2019
While the hospitality industry has an ongoing need for managers at all levels, the need is even greater for revenue managers who possess the long-term mindset, capabilities and operational understanding.The revenue management role can be distinguished by the following behaviours:LeadershipCommunication skillsVisionLeadershipFor revenue managers it's about a continued team approach. The revenue leader must point the way and by doing so, demonstrate that success is worth the risk. A key trait of an effective revenue leader is that they must not only be good with analytics, but must also be effective influencers in sales, marketing and operations.Managers who are likely to move into true leadership roles understand the value of cultivating interpersonal relationships. These relationships exist between staff and guests and also among all staff members. This helps unite a team in the common goal of delivering the optimal guest experience based on service and mutual respect.Communication SkillsRevenue leaders of the future must be effective communicators:They need to be able to clearly communicate the revenue strategy to all level of staff in the hotel be they the operations team or the sales and marketing team.They need to be practical and deliver step-by-step plans that all hotel staff members will understand and embrace.They need to be implementers and push for change by their actions, and lead by example.They need to have the ability to motivate their staff and inspire them to achieve the hotel goals.VisionOn one level, revenue managers have a deep understanding of the industry, hotel services, competitor set, and hotel history. On the other hand, they create a clear vision of the future. They are in a position to inspire others and develop a shared vision, representative of deeper aspirations. Successful revenue management supports the attraction and retention of people who share a stake in the business' growth and success.A change is comingLike any business, the future of a hotel is in its ability to grow in performance year on year. We all understand that growth comes from the top line and there is no doubt that revenue management has a significant influence on the top line.While the evolution of revenue management will present many opportunities to today's revenue leaders, it will also bring many challenges. In addition, it will likewise call for the evolution of revenue leaders. Consequently, future revenue managers will have to progress far beyond the current, stereotypical "number-crunching" skill set often assigned to the revenue management role.One of the reasons that sales and operating departments so consistently produce top-tier leaders is because these individuals often possess the people skills and leadership experience required to engage an entire hotel. This need for such attributes is not going away.It appears there may be an imminent restructuring coming to the hotel world that naturally involves the practice of revenue analytics rising in prominence. This will likely result in efficiency and growth for companies that embrace it.Today's hotel revenue managers may be tomorrow's corporate and hotel leaders or even the next hotel general manager. But before that happens, revenue managers need to improve their leadership, motivational, analytical and communications skills.

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