As the chief financial officer of a revenue technology company, bottom line financial performance always remains at the top of mind.
NB This is a viewpoint by Brian Douty, chief financial officer at IDeaS Revenue Solutions.
I think about this perspective often during discussions around our solutions and the benefits they bring to clients.
Previously, I’ve spoken about how hotel owners can use revenue management to their advantage; however, ambitious revenue management professionals can also use its analytical benefits to influence their executive management.
In fact, capitalizing on revenue management analytics is one of the best ways your hotel can increase its asset performance and value.
Below are five ways that analytics can increase bottom line performance and impress your executive team:
Making the case for automated revenue management
Automated revenue management systems provide hotels with proven results, with many hotels experiencing immediate improvements in ADR, occupancy and shoulder night increases directly upon implementation.
As a cloud-based service, and without the added expense of local hardware, automated revenue management systems are a low-risk investment for hotels. And with end-to-end client support provided by revenue solution partners, hotels work closely with experienced industry professionals who deliver guidance and insights.
Automation also opens your hotel organization up to even greater improvements in its overall revenue management culture; the advancements in people, processes and technologies through the use of automation make the overall investment go even further.
Choosing business that brings maximum revenue
Advanced analytics detect demand patterns that are not readily visible to the human eye. These include distinctive patterns in length of stay, days to arrival, seasonality, cancellations, and more. Assessing hotel demand from an analytical viewpoint gives you the ability to improve revenue performance based on valuable insights – not on a gut feeling.
Analytics inform hotels of the actual demand that can be expected, allowing you to accept longer staying business. This also helps your hotel maximize onsite spend. These critical insights improve your overall revenue strategy - giving you a complete handle on your hotel’s total demand, what it can accommodate and who you want to accommodate.
It’s vital that you accept the business that drives the most overall revenue. Increases in revenue performance always catch the eye of senior management.
Pricing public rates with confidence
Owners expect more than just high occupancy. Successful hotels see beyond simply achieving “heads in beds” and understand how their public rates affect all related business – including linked and derived business.
Advanced revenue management systems help establish the right pricing balance to drive optimal bottom line performance. It is critical to employ a revenue system with the analytical capabilities to handle all of a hotel’s business complexities.
Evaluate your system’s analytical abilities to balance price, time effects, demand, linked rates and other relevant market data (such as reputation scores and competitive rates.)
Winning the game with a full house
Hotels often avoid overbooking in fear of walking a guest. However, this results in missed occupancy at your highest ADR and revenue opportunities. Using analytics that understand the wash patterns of your market segments allow hotels to plan ahead and overbook to proper expectations. It also helps hotels gain a thorough understanding of their cancellations, no-shows, early check-outs and group business (by room type.)
It is not enough to simply acquire a reservation for every room a hotel has to sell. Advanced revenue management analytics can help your hotel establish an optimal upgrade strategy, too – allowing you to determine when to offer premium upgrades (rather than comping them) or when to deploy greater length of stay controls (rather than relying on limited manual controls from your PMS.)
Bagging the best group business
Group business drives additional profitability when accepted under the right conditions and at the right price. Disrupting your normal guest booking patterns by accepting less profitable group business that displaces higher valued transient business can be a costly mistake.
Advanced analytical systems assess the displaced inventory (both guest rooms and meeting rooms) and the profitability a group inquiry brings versus the profitability of its displaced business. These insights allow you to confidently accept the pieces of business that will drive optimal revenue increases for your hotel in the long run.
NB This is a viewpoint by Brian Douty, chief financial officer at IDeaS Revenue Solutions. It appears here as part of Tnooz's sponsored content initiative.
