Currently, the numbers of hotel revenue management theories that exist in the market are almost at par with the number of people using it. Since revenue management is also known as yield management, different people perceive it in different ways. The tasks that are implemented in revenue management can work wonders if applied rightly and constantly.
Management of the business revenues flow process should conform to the operation of the concerned hotel. Special importance should be given to the goal that one wants to achieve in this regard. The main objective of revenue management system should be maximization of the hotel revenue by making proper use of the available pockets of occupancy demand.
Application of Revenue Management System in the Industry
Some hotels consider revenue management an important aspect of their business and allocate appropriate resources. Others restrict the management process to the front office, reservations department or the local management.
The primary matter of concern here is to find that many of the people responsible for revenue management have no formal revenue management training, no definite goals or any means to accomplish their target.
Deduce the level of Competition
The first step towards implementation of the apt revenue management system is to be able to comprehend the amount of competition in the market. It is important for hotel owners to understand the work ethics of their contemporaries, more than their own.
A good way to start determining the potential of your opponent would be to follow the weekly and monthly editions of the Smith Travel research. It helps comparing data like average rate, occupancy and cost per available room of your hotel and its parallels. This will help deduce the actual position of your hotel in the market and encourage you to set targets that you want to achieve.
Principles of Traditional Yield Management
Traditional yield management involves settling on room rates and inventories based on their demand. Such alterations include historic data, present room reservations, prediction and some amount of immediate beliefs.
Historic data may often point to the fact that occupancy rates are higher during certain times in the year, irrespective of the current scenario. The primary concept here it that hotel administrations must increase room rates as the demand for occupancy increases.
Faulty Measures of Revenue Management
Generally, you will be able to figure out hotels that use poor revenue management systems. Initially, many of these hotels may keep high rates for rooms. Eventually, however, the rates are reduced when the expected occupancy rates are not achieved.
Thus, it can be proved that revenue management system need not be complicated to get desired results. In fact, hotels must assign such duties to people who have interest in this field and are quite good with numbers. If there is no one to shoulder this responsibility, hotels must seek professionals adept in Revenue Management Consulting, as such investments could work magic in future.