As far back as 2010, revenue management guru Sherri Kimes of Cornell University foresaw the rise of total revenue management within the hospitality industry. This, however, remained a distant dream for many as hospitality businesses have struggled for more than a decade to develop metrics, processes, systems, and programs to drive total revenue management performance and culture within their organizations.
Having a unified tech stack is not only a “need to have” today, but it’s also critical for hotels that are trying to consolidate and standardize data from all revenue outlets and systems (PMS, POS, sales and catering, etc.) Gaining clarity into each revenue outlet’s future daily performance at the segment and/or meal period level for better strategic planning is necessary. It requires hoteliers to acquire the right modern technology and expertise to kickstart and continuously enhance total revenue management practices.
Efficiently and quickly updating forecasts to reflect current market conditions and consumer trends will help hoteliers manage resources and reduce waste. Various budgeting iterations cannot be accomplished without the proper technology in place.
Hoteliers are demanding technological innovation to address the pressing challenges of the day as accurately as rooms, including forecast and budget, food and beverage (F&B), and other income streams. Addressing these challenges will allow property-level teams to sell more and increase profitability. It also enables them to provide optimal staffing levels and capture and service predicted demand. Finally, by removing silos with holistic automation, forecasts can be delivered directly to finance.
The Opportunities
Our industry is moving closer each year to a unified technology stack. Data partners and savvy hoteliers know the importance of unifying data streams. But improving strategic commercial decision-making through dynamic forecasting and insights for all revenue streams, including rooms, F&B, ancillary services, and meetings & events, is not an easy lift. It requires a concerted effort from the top down to develop a total revenue management culture.
Today’s innovations in revenue management technology have delivered the capability for total revenue forecasting and budgeting that transforms how the hospitality industry forecasts and plans rooms, F&B, and other lines of business that drive greater profitability.
According to stats from AMR Research, a three percent increase in forecast accuracy increases profit margin by two percent. Being able to forecast effectively requires a reliable overview of your organization together with the ability to monitor the factors that will influence your future sales.
Having access to a total revenue management platform means more access to data to help align teams with common KPIs. These insights also support better management of forecast and budget iterations, managing staffing requirements and procurement schedules, and proactively reducing wastage and costs.
Automation Delivers Freedom, Efficiency, and Profitability
Automated systems give revenue managers freedom and flexibility without having to worry about daily optimization. But automation does not replace the role of a revenue manager. Instead, it elevates their work and provides managers with new opportunities to lead using data.
The revenue manager and the system they use should be a symbiotic relationship. One without the other is inefficient and lacks a holistic strategy. Automation is the present and the future, and embracing it is the only way revenue managers can reach the full potential of their role. They are not servants to the machine but the person behind the curtain.
So, as we move ever closer to a unified tech stack to ensure clear insights across all revenue channels, we are beginning to realize the freedom and efficiency that data integration can bring to the hospitality industry. What is more essential than that?
Sponsored by IDeaS.
