Hotel Revenue Management: Collaboration is Key at Rainmaker OPTIMIZE2017

Author: Dom Beveridge

This week I was interested to read an article in Hotel News Now entitled "Collaboration needed for revenue management in 2017".  The article covered a recent "Connect with HSMAI" event that took place in my native London last week.  The event - and hence the article - focused on an expert panel of hotel distribution of distribution and revenue management experts, covering a range of mostly marketing-related topics.

The discussion piqued my interest because the convergence of revenue management and marketing is top-of-mind for me and for Rainmaker right now, as we prepare for our annual user conference, OPTIMIZE2017, the theme for which will be "Revenue Management & Marketing - The New Power Couple".  Over the last couple of years, it has become clear from our customers that the organizational lines between revenue management and marketing have been becoming blurred.  As one of the HSMAI panelists put it, "there remains a battle for the hearts and minds of customers," with direct booking conversions the prize.

The quest for direct bookings is top of mind for revenue managers and it's an area that will be addressed directly by Rainmaker's Vikram Singh in a session: "Strategies for Winning the Direct Revenue War."  This presentation - designed for revenue managers - will focus on some of the proven tactics for ensuring that hotels are getting their fair share of direct revenue.  Covering topics like: distribution strategy; managing your digital assets and agencies; how/when to use PPC and SEO and how much to worry about rate parity, this session will both provide a wealth of tips and tactics and will set the scene for a broader discussion about the interplay between revenue management and marketing.

Of course, the marketing component of revenue management runs deeper than conversion tactics.  Revenue management and marketing are now both data-intensive enterprises.  As we see smart revenue managers digging deeper than ever into booking data, they naturally uncover opportunities to change tactics and improve future demand, which leads us naturally into the realm of marketing.

Imagine, for example, a hotel whose future demand is generally lower than expected for some future period.  This trend would first be predicted by demand forecasting - a revenue management process.  It would then fall to revenue management to make the pricing decisions that will optimize predicted revenue, based on predicted demand.  In the case of a shortfall in demand, the general trend would be for prices to fall.  But dropping price is not always the right thing to do.

In our imaginary hotel, there may be an underlying problem that affects our ability to convert demand or to attract demand in the first place.  What if there is a particular source market that usually provides a significant share of bookings.  If we could spot that shift early in the booking cycle we could take marketing actions.  We could increase advertising and reach out to high-producing agents in that market if the hotel is no longer getting its share of bookings.  Or in the event that demand is generally down in that source market we could shift focus and marketing dollars elsewhere.

Revenue management is all about maximizing revenue - historically it has done so through manipulating prices, but now there are more levers to pull.  Revenue managers need to make informed decisions on whether their properties have a revenue management or a marketing issue, and should be empowered to act accordingly.  The key to making informed decisions like these is the accessibility of data and the ability to analyze it.

This is another area that will get extensive coverage in this year's program.  Business intelligence has been a hot trend in revenue management for the last couple of years.  And for good reason - in the example above, a hotel could not reliably gain the insight required to change future demand without moving out outside the traditional scope of revenue management systems and processes and into the sphere of business intelligence.  Revenue management systems predict the future demand trends.  Business intelligence can expose the trend behind the trend, enabling users to understand causality and act while there's still time to impact demand for a future arrival date.

The business benefit is obvious - if you can improve demand, you don't have to discount, and revenue performance improves.  But organizations need to be configured in a way that makes it easy to act on these insights.  And this need for collaboration - the subject of the article that prompted this post - is changing the role of today's revenue manager.  We look forward to exploring this important topic at OPTIMIZE2017 the beautiful Terranea Resort in a few weeks' time.  Subscribe to our blog to stay in touch with the discussion!




OPTIMIZE2017 is an exclusive event for Rainmaker clients that is unlike any other conference you’ll attend in 2017. Year after year, people return for thought-provoking content on industry challenges and current and future trends. Attendees also have the chance to get a first-hand look at what is coming from Rainmaker before it hits the market.

Join us as we return to the beautiful Terranea Resort and take your revenue optimization practices to the next level with interactive breakout sessions and networking with your peers.

WHEN: March 8-10, 2017

WHERE: Terranea Hotel & Resort, Rancho Palos Verdes, CA



• Network with industry leaders and peers

• Hear industry leaders speak on industry trends, the economic outlook and their implications for revenue optimization and demand generation

• Learn from and share best practices with industry peers and experts

• Connect with the Rainmaker team and learn how product features can enhance revenue optimization for your business

• Enjoy the beautiful Terranea resort in early March!


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