How to manage your revenue management channels

This article is part one of a three-part series on revenue management. Look to next week’s technology newsletters for part two and three.

The right channel for revenue management is the channel with the highest contribution, said Erik Weller, SVP of education for Itesso. “The highest net contribution channel is typically the hotel’s own website, but they have to compete with the likes of Expedia, which spends billions to compete with hotels,” he said. “OTAs may deliver high reservations but it’s at a high cost.”

To increase revenues, Weller suggests, hotels need to promote and serve products that OTAs cannot support, such as guest recognition, room upgrades and other unique, on-the- fly packaging that brands can accomplish.


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“The Mandarin Oriental has a great silent guest appreciation program—they just know who you are,” he said. “You order a drink at the bar in one Mandarin hotel and at the next Mandarin hotel they know what your favorite drink is. That’s how hotels can take back ownership of the brands they sell. Technology can enable hotels to deliver on that promise.”

Joel Carver, CEO of the Carver Hotel Group, agrees that it’s no longer just revenue management—it is channel management and total-yield management. “Hotels need to maximize their yield—who’s the customer, what’s the price point and what’s the cost to acquire that customer,” he said. “Catering spaces, bars and restaurants and rooms all need to be utilized effectively.”

Carver believes hotels can increase revenue management by valuing every guest, especially in group sales, as casinos do, but hotels need to adapt this to the leisure consumer as well.

Ultimately, the best way to increase revenues is to crunch more data about what each guest is doing in the property, said Shayne Paddock, CIO of ZDirect.

“Hotels need to know what guests are doing on premises and online, and track that spending to respond to their behavior,” he said. “They need to find the best time to upsell that guest and time the offer accordingly. They need to track the best channels for that guest and use the right channels that guest wants to use.”

“Big data and real-time analytics need to be optimized for the best and most intelligent upselling and ancillary results,” he added.


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