Contributed by Nicole Adair, Director of RM Services, SHR
Did you know?
Almost half of all OTA bookings are now done via mobile devices?
Travel apps and booking channels have exploded while booking windows have become shorter.
Add it all up and what have you got?
The perfect storm for more uncertainty in forecasting and budgeting for revenue managers. Luckily, you can fix this situation, but only if you know how to work things the right way.
In a recent live webinar featuring myself and my colleague, Christie Crawford, Director of Revenue Management for SHR, we explored how budgets, booking windows, and (of all things) Artificial Intelligence (AI) are now converging to your hotel’s advantage. Surprised? We were too.
Here are the highlights:
(Listen to the full webinar recording for some really fun anecdotes from our own hotel experiences!)
Budgeting—Are You Looking at the Right Information?
You can’t arrive at the right answers without asking the right questions, right? (Don’t answer that one.)
We’re talking about tough questions, like;
What new inventory is there in the market?
Which existing inventory has been renovated?
What special events happened this year that won't repeat next year, and vice versa?
Have any major business campuses or venues opened or closed?
And Then There’s the Travel App Explosion
Like I said in the beginning, it’s shocking how apps have and continue to explode in number and frequency of use. It may sound unbelievable, but…
80% of travelers in the U.S. are now searching for trips using their apps, even when the actual booking is made elsewhere. But believe it.
This situation raises three main problems. Luckily, they do have solutions.
#1 When apps make it harder to forecast:
- Track the booking patterns of your hotel
- Track lead times by day of the week
- Be sure to separate Holiday lead time
#2 When guests expect lower rates closer to the arrival date:
- Use Flash Sales, but carefully
- Offer Value Ads as last-minute discounts
- Explore foreign travel markets with longer booking windows for new opportunities
#3 If when you drop rates, those who booked early want the discounted rate:
- Try not to discount below the Advanced Purchase discounts
- Make sure Advance Purchase discounts are non-refundable
- And above all else….don't panic, because there is one more thing you need to use….
AI to the Rescue?
Making friends with AI is smart for so many reasons, and contrary to what you may have heard, it really will NOT take over your job. What it WILL do, however, if you use it right, is help automate manual tasks that take up your time. Also, it can help you handle day-to-day adjustments, and ultimately allow you, as the revenue leader we know you are, to focus on big picture strategy and manage by exception.
This chart shows who is actually using RM tech. Surprising, isn’t it?
Key Takeaways You Can Start Working on Now
They say the best strategies come from devoting enough time upfront to planning. When it comes to revenue management, it couldn’t be any truer.
To get you started off right, here are three do’s and a don’t:
- DO invest time in gathering your data for budgeting
- DO budget on a day-by-day basis, preferably by segment
- DO embrace tech and use AI to your advantage
- And we’ve said it before, but it bears repeating…DON’T panic!
So, get going, and start planning your revenue takeover today. You’ll be glad you did!