"There is no greater sin than not having a robust and scalable data management strategy"
Published: 16 Apr 2008
Revenue and Pricing Strategies in Travel, TDS Europe 2008 Special
The integration of customer data into the day-to-day operations of Revenue Management is a slow process and extremely challenging one, both in terms of technology and people.
So what are the main challenges in overcoming the same?
From a hotel's perspective, Millennium Hotels and Resorts' Regional Director Revenue Management Europe Nayan Peshkar considers the quality of the captured and management of the data as the main hurdles.
"The first challenge is one that most of us will be familiar with - Legacy technology and/or processes fail to adequately capture the intelligence that is necessary for future consumer interaction in order to maximise the lifecycle revenue opportunity. I will focus more on the second challenge i.e. that of data management," Peshkar told EyeforTravel.com's Ritesh Gupta.
"More often than not, database management is a complex task due to the fragmented nature of technology platforms the data is sourced from. Having a customer data integration hub philosophy using a standard set of protocols for connecting applications seems to be the preferred way of the future for hotel companies. Systems could be built on a service-oriented architecture and applications could be connected through cost effective means such as via the Web. Such a robust approach will give hotel companies a 360-degree view of the consumer as they will be able to integrate all of the customer data into one database, thereby ensuring the quality and accuracy of the data," he said.
According to Peshkar, who is scheduled to speak during the Revenue and Pricing Strategies in Travel conference to be held in London on 20 and 21 May this year, this structure will allow for efficient integrations with property management and POS systems, automated revenue management and marketing platforms.
"An effective data management initiative relies on a combination of people, process and technology to provide data stewardship, which identifies data quality and data integrity as corporate priorities. There is no greater sin than not having a robust and scalable data management strategy," said Peshkar.
A section of industry acknowledges that the biggest challenge for RM is the fact that it is much too tactical in its nature? Many RM managers' main focus is on "what do I have to fill tomorrow". In order to retain profitable customers, it is critical that lifetime value is being incorporated into the RM systems. Are hotels focusing on customer-centric pricing models to sustaining long-term growth?
On the same, Peshkar said Revenue Management practices place a lot of emphasis on capacity constraints, time cycles, and price variables.
"If one were to go by this view alone, any reference to the "right consumer" is limited only to their ability to pay the optimal price. In some ways, this approach may be deemed to be short term, transactional biased and product-orientated. This traditional approach to revenue management does prohibit the development of relationship marketing with its supposed significant end rewards," he said.
Peshkar added, "However, a shift from this myopic approach is easier said than done simply because it is difficult to quantify the life time value of a consumer. The appetite for developing and maintaining a mature CRM system whose logic discriminates between profitability and loyalty is another critical factor. The current raft of generic hotel guest loyalty programmes do go against basic revenue management principles. I believe the industry has the capacity and appetite for "positive discrimination", where loyalty benefits are linked to profitability indices of consumer sets. This way, we can reward the purchase behaviour of (profitable) consumers while keeping true to the nature of revenue management."
Peshkar is scheduled to speak during the Revenue and Pricing Strategies in Travel conference in London on 20th May. The conference is part of Travel Distribution Summit Europe 2008 to be held in London on 20-21 May. For more info, click here –
http://events.eyefortravel.com/tds/revenue-management-conference.asp
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