Revenue Management Takes Center Stage during Bad Times

It is said that a good brand will prosper in good times but it will be one of the first ones to struggle during adverse economic conditions. One of the reasons why include its price. Traditionally, price has always been pointed out as the culprit that determines whether a hotel will survive or not. However, during today’s times with the internet and globalization, this need not be accurate.

Particular attention should be given to online hotel distribution because it can lead to profit optimization and increase RevPAR. Using technology to make things happen will maximize current resources and competitive advantage even during the tough times. Though the sentiment today can be described as “declined”, “down”, or “depressed”, this doesn’t necessary imply that this spells the end of major hotel brands.

Take the example of the Asia Pacific region. Hotel transaction in the area was actually down in 2008 from its high in 2007. But this does not signal its doom though because on the fourth quarter of the same year, 2008, hotel sales actually grew marginally. Revenue management plays a significant role in this. In addition, certain hotels even take the weather into consideration.

For example, if stormy weather and dark clouds are predicted, hotel revenue managers know that customers are more likely than not, will stay indoors and search online for the best travel deals. These hoteliers also realize that once online hotel sales become the norm as customers become used to it, they will need to adapt. There is an advantage because shorter lead times will result from it.

It should also be noted that as lead times become shorter, previous historical data will no longer be relevant as it used to be. It will have limited value for the future so more extensive data gathering initiatives for yield optimization may be required.