Online Hotel Sales Revenue Management

It is no secret that hotels are now deriving a significant part of their revenue from internet sales, either it is from electronic distribution channels (GDS), franchise websites, or even the hotel’s own home page. For this reason, many hoteliers are concentrating their efforts online. Right now, many have already re-allocated their resources from traditional channels to internet marketing and promotions with the objective of manipulating their internet presence to increase hotel sales.

Hotel revenue managers are certainly correct in this initiative. After all, the internet presents a lot of growth opportunities for hotels that are struggling in today’s tough times. In addition, they can expect their yield management to be improved and increase hotel sales.

Frustrated hoteliers should remember the saying that if you “keep on doing what you have always done, you will continue to get what you have always gotten.” In the business environment today, this means diminishing hotel revenue unless they do something about it. The internet should be utilized as an effective tool to drive hotel sales. Before embarking on this initiative though, hoteliers must realize that it is important to include the sales department because the this revenue management strategy will ensure that the product positioning will be uniform across all hotel distribution channels.

The three main stages that hotels can take include:

• Target Market Positioning – this strategy mainly involves locating new markets when the existing customers are generating less revenue. Hoteliers make the decision to concentrate on markets that used to be ignored. The new market can be composed of affinity groups or even the government.

• Market Penetration Strategy – as its name implies, this means deciding on which method will penetrate the market best. In this stage, it is critical to know the “depth” of the market to ascertain its potential and boost profitability.

• Initial Approach – this third approach entails actually approaching the market. There are two ways to conduct this: traditional and cyber. Obviously, the approach implemented in the two channels should be different. For example, in the internet, the first contact may come from travel portals or third parties while in traditional marketing; it might come from travel agencies.

The three stages outlined above is only a brief overview of what hotel revenue managers and their sales department can do to reach new markets on the internet. However, while the online marketplace presents vast opportunities, it is also quite important for hotels to keep their current clients and maintain the level of relationships they always had.