Revenue
management is changing to become a more all-encompassing discipline according
to EyeforTravel’s new Aggregating DataStreams for More Effective Revenue Management report, with 71% of managers believing
that the discipline should be recognized as profit management.
The report,
which is free to download now, notes that a focus on profit will be key in the
years to come, with the industry moving emphasis away from the traditional
measures of success of Revenue Per Available Room (RevPAR) and Total Revenue
Per Available Room (TRevPAR). Instead, the industry will look at guests in the
round and consider the total profitability each can bring and aim to maximize
this. The key metric the industry will use in the future Gross Operating Profit
Per Available Room (GOPPAR) according to the report, which also notes that Cornell
University found GOPPAR is now considered the most important benchmark for the
future.
Therefore,
revenue managers will need to consider all revenue streams and also have a
better understanding and inclusion of cost factors than they have in the past. Alongside
traditional operating costs of the hotel, revenue managers will need to
calculate and include their distribution costs, which the report also found to
be a key area of concern for revenue managers.
In order to
achieve this revenue managers will need to increase their skillsets and also obtain
better technology according to the report. It found that 71% of revenue
managers felt that they didn’t yet have the tools to do their jobs effectively,
making technology investment a major area for scrutiny in the next five years.
Many of
those featured in the report noted technology and automation is needed so that
they could free up time to be spent on more important tasks, moving away from
data collection and setting restrictions to working on overall strategy,
coordination with other departments and guest experiences. This latter element
is noted as being key in the report, particularly as guest reviews can have a
direct effect on the property’s profitability.
- The effect of competitors on pricing, how to account for them and what strategies to take to get a competitive edge.
- Understanding and constructing predictive analytics.
- Understanding the costs of a business’s channel mix and how to win direct bookings.
- The state of the industry’s approach to ancillary revenues.
- The key metrics every revenue manager should be working toward.
- The future of a revenue manager’s role and the skills they will require.