EyeforTravel is now Reuters Events - LEARN MORE
2013 saw revenue management at the top table but the work is ongoing
Revenue management emerged as one of the most sought after disciplines in 2013, as EyeforTravel.com hears from Hyatt.
Be it for handling a bigger mandate within a hotel group, preparing RM teams for the future or garnering incremental revenue via smart up-selling, in 2013 RM has been taken very seriously.
Here EyeforTravel’s Ritesh Gupta talks to Paul Murray, vice president revenue management, Hyatt Hotels & Resorts – Americas, about the role of RM going forward.
EFT: In 2013 what would you count as the major developments in RM?
PM: The first impression of 2013 is performance and a couple of aspects stood out:
· In the Americas, we experienced continued growth of demand and restricted growth of supply which has led to higher occupancies and growing ADR. Group performance lagged to expectations, but transient travellers made significant gains.
· Another area of intrigue is the merchant OTA landscape and the emergence of Booking.com in the Americas as well as the recent agreement between Travelocity and Expedia to consolidate rates and availability. It will be very interesting to see how these changes take shape in 2014 and whether there will be more opportunity for hoteliers to wrestle market share back to our own brand site and voice channels.
ËFT: How is RM’s role in a hotel organisation expected to shape up in 2014?
PM: The role of RM varies from one organisation to another, but one trend that is similar is the long-term growth of the field in the hotel industry. Depending on where an organisation sits along the continuum of revenue management integration, I would look to 2014 to see a strengthening of core capabilities and technology in the transient segments, continued contributions into group pricing and evaluation practices, and growth into F&B forecasting and meeting space optimisation.
EFT: As an RM professional what do you see as the emerging challenges?
PM: As we continue to improve big data capabilities, it is easy to see how the role of RM can become overwhelmed by too much information and experience minimal improvement of decision making. One key, in my mind, is finding ways to leverage data to lead revenue managers quickly to action – rather than providing hotels with access to a black hole filled with unending information.
Another important factor will be the ability of an organisation to deploy meaningful training that is both easy to consume and provides clear guidance about managing best practices in pricing and inventory management.
Without a strong knowledge base combined with action-oriented information at the hotel level, many advances will quickly fall flat.
EFT: In what way do new avenues for revenue generation - like mobile distribution, big data/analytics for up-selling – impact RM as a discipline today?
PM: Both mobile distribution and improved up-sell capabilities are growth areas for the hotels industry. However, both require significant investment in development and implementation. So, I don’t expect to see quick shifts in either area. While up-sells have long been an opportunity for hotels, mobile advances are new and therefore it will be important for hotel chains secure these opportunities before they become consumed by OTAs and other competitors to reservation process.
EFT: How is the industry gearing up to maximise ancillary selling/non-room related revenue?
PM: Hotels perform well in selling packages that include revenue streams outside rooms, whether it is golf, parking, spa treatments, or F&B. There is also growth in the area of delivering amenities to a guest room which are sold prior to arrival.
EFT: When it comes to evaluating forecasts that eventually maximise yield and profitability, what trends do you see emerging?
PM: The key opportunity in forecast accuracy and optimising revenues for hotels lies in the successful blend of human and machine. Calculations built around revenue management processes and philosophies are critical to the success of a revenue management.
But we cannot solely rely upon full automation of a machine without tight interaction of the revenue manager. The human element brings information that cannot be ascertained quickly through numbers, such as strategy changes, changes in demand patterns, supply changes, shifting dates of events and so forth. So, the trend in this arena is on both fronts. How do we improve system generated forecasts so they become more reliable? And, how do we build systems that allow revenue managers to interact with these forecasts so that they can be as accurate as possible?
On one hand, we need better algorithms and based on more data elements. On the other hand we need intuitive systems and strong training to make sure we can integrate the revenue manager into the forecasting process so that results are as accurate as possible.
EFT: How can access to real-time information improve the role of the senior RM executive?
PM: While day-to-day management of hotel revenue management strategies lie directly in the hands of hotel-based revenue managers, access to real time information is a key element senior RM executives use to guide organisational strategies. On a regular basis we are accessing live data across all of our brands to improve forecasting accuracy, measure performance to forecast, manage short term strategies based on performance monitoring, evaluate opportunities based on reported industry performance levels, proactively interact with volume account RFP processes, and measure real time performance of actuals, booking pace, and segmentation.