Pre-Marketing Plan in Revenue Management Strategy

In any business undertaking, the marketing plan is seen as a crucial tool to success. But what many fail to consider is that revenue management should be an integral part of the marketing strategy and should be considered distinct from the marketing budget. Many hoteliers seem to think that the budget and the revenue management are one and the same thing. Even those who have a better understanding of it believe that the marketing budget and the revenue management strategy are interrelated and needs to be placed on the same page.

If there’s one thing you should know right now, it is the fact that this belief isn’t accurate. The hotel revenue management system needs to incorporate different revenue sources including the hotel web site, the electronic distribution channel, and the hotel GDS. In addition, it requires the involvement of all profit departments of the hotel such as the sales department. It is a revolving process that requires adjustment according to specific market conditions. This is very much unlike the budget wherein everything is set in stone.

A good hotel revenue management strategy requires profit optimization and tactics that will boost hotel sales. It should encompass everything from the cost of commissions to optimizing revenue. This means manipulating GDS, using electronic distribution channels, and allocating proper resources. Its development should enable sales to determine the inventory available in a given period and at what rate these rooms should be rented out. So how, exactly should this process work?

The Four Step Process

• Gather the Info – the process starts off by seeking relevant information that will provide an accurate forecast. The report logs from the previous years should be sorted out. In addition, a situational analysis should be completed to identity possible opportunities and challenges for the year ahead.
• Analyze Revenue Information – all revenue drivers should be looked into. Through this, those with the most potential will be identified. Currently, it is a well-known fact that a significant part of the hotel sales will come from the internet.
• Facilitation – everyone involved in increasing the hotel’s revenue should come together. This “meeting of the mind” will enable the best possible strategy to be identified.
• Revenue management strategy – after compromise, the situational analysis, and everything else, the revenue strategy should be created. The main aim is to increase RevPAR by utilizing an ideal mix of revenue, rate, and software solutions.

After the strategy has been created, it is important for the “facilitation” group to periodically meet in order to discuss the strategy. Reviewing it and basing it on reality is the key to successful hotel revenue management implementation.