The year 2020 has undoubtedly been difficult for a large number of people and companies. As far as the world of tourism is concerned, the hotel sector in particular, 2020 can be categorized in no uncertain terms as an annus horribilis. However, it is especially in hard times that it is necessary to find new ways to become competitive, to minimize losses and to present oneself at best for the recovery. Undoubtedly, to stimulate demand and increase revenues at the same time, it is necessary to optimize prices by practicing shrewd revenue management.
A definition of revenue management
Revenue management means optimizing supply prices based on demand. More precisely, revenue management aims to scientifically manage price levers in relation to maximization of employment. It is therefore not surprising that the top revenue management experts work for the world’s most famous hotels as well as for airlines that want to make the most profit from every empty seat on their aircraft. However, by using the most innovative software solutions for revenue management, it is possible to optimize prices in the right way at the right time even without having a dedicated revenue management team. A good revenue management strategy starts with an assessment of consumer behavior to optimize the sales price: rates are dynamically changed according to consumer response and other factors such as the season, the day of the week, etc. In order to implement a good revenue management plan, it is therefore necessary to be able to count on a wide range of information: the hotel’s historical data, market data, customer segmentations, reviews, anniversaries and so on. With so much data to analyze, more and more hotels are relying on revenue management software based on artificial intelligence to be increasingly competitive.
Revenue management for an increase in direct bookings
The key objective of any revenue management strategy is to increase bookings with a rate that generates profits and supports growth of the business. Each rate is thus decided from day to day, depending on the situation and by offering discounts and making promotions on different channels where necessary, and then selling at full price, or even with surcharges, when the level of employment is high and demand is really great. With good revenue management techniques, it is possible to raise the hotel’s revenues in any period of the year, even during times of a drop in demand, be it typical or exceptional.