Hotel Revenue Management: Solutions, Best Practices, Revenue Manager’s Role

What is hotel revenue management?

  • Customer segmentation
  • Demand forecasting
  • Yield management
  • Dynamic pricing

Customer segmentation

Demand forecasting

How demand forecasting works during peak and low demand periods

Yield management

Yield management tactics

Dynamic pricing

Dynamic pricing strategies for hotels

Revenue manager: job description

  • Market analysis and segmentation
  • Competitor analysis
  • Customer behavior analysis
  • Historical and current data analysis
  • Yield management
  • Revenue performance forecasting
  • Daily and monthly reporting
  • KPI tracking

KPIs in hotel revenue management

Revenue management software solutions

  • Detecting the most profitable pricing options
  • Demand forecasting
  • Analysis of lost revenue due to overbooking or cancellations
  • Revenue reports by KPIs
  • Collection of historical inventory data
  • Channel- and segment-based revenue analysis
  • Day- or week-based performance analysis

Best practices in hotel revenue management

1. Shift to profit management

2. Using data analysis and predictive analytics

Data and forecasting in revenue management
Source:
Snapshot

3. Channel and overbooking management

4. Driving direct bookings

Elements of driving direct bookings online
Source:
Vizzly

5. Mobile-driven booking

Hyatt mobile app interface
Source:
Thinkmobile

6. Using AI and chatbots

7. Generating ancillary revenue

Interest of buying additional services by business travelers
Source:
iSeatz
Internal packaged offers by Claremont Inn
Source:
Claremont Inn

8. Dynamic packaging

Hotelerum dynamic packaging platform
Source:
Hotelerum

9. Launching loyalty programs

To sum up: steps to increase a hotel’s revenue

  • Create or engage with a data science team to focus on predictive analytics input
  • Ensure collaboration across all departments
  • Use a revenue management software or a PMS with an integrated revenue management module
  • Increase ancillary revenue by selling additional services
  • Manage sales channels
  • Adapt to current digital trends
  • Provide some perks to returning guests and those who book directly

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