How Revenue Management is Changing the Hospitality Industry
One of the primary goals of any business is to rake in revenues. In the hospitality industry, businesses are increasingly looking at smart pricing options as a way of attracting potential guests and visitors. Through modern technology, hotels and lodgings can use revenue management to generate more revenues. Also known as yield management, this is a system that is designed to predict the actions of customers so as to maximize returns and boost profits. With a primary focus on the hospitality and airline industries, revenue management has changed the hospitality industry in a significant way.
Better understanding of customer expectations
By giving companies insight on the needs and wants of their customers, revenue management makes it possible for the businesses to design products in line with these needs. The shape and presentation of the product will ultimately lead to more clients demanding the services. For example, a hotel may establish that most of the customers who request accommodation services are business travelers who may want internet services. With this information, a hotel chain can provide free wireless internet within the premises.
Better coordination of company divisions
Through revenue management, companies in the hospitality industry have been able to achieve better coordination of their various divisions. For instance, employees in the sales and marketing division are able to work closely with those who provide services to customers. This means that the service representatives will execute the programs being promoted by the sales team. In the end, hotels will have more effective programs that attract customers and boost revenue.
Access to new market segments
Revenue management can help hotels to not only maximize their current market segment but also explore other market segments. This will help them to continue growing their footprint in the industry. A hotel chain that had previously focused on offering meeting and conference facilities may realize increased demand for family vacation spots. This information can help to make adjustments across their locations in an effort to make family vacation more fun.
Competitive prices
By discovering the kind of services that customers need, companies can use revenue management to offer more competitive pricing. This will help the company be more competitive than its competitors in the industry. An airline industry may discover that some of its customers are struggling to pay the current high prices and fees. In order to stand out, the airline may choose to do away with baggage fees so that customers enjoy less pressure on their wallets.
Reducing the likelihood of manual errors
With revenue management systems, businesses in the hospitality industry will be able to communicate the right prices to customers. Prices will also be updated in real-time, reducing the costs that are commonly associated with human error. A reduction in errors will also ensure better operational efficiency.
There is no doubt that revenue management has had a great impact in the industry. This means that businesses in the industry that want to stay ahead of competition should consider embracing revenue management systems.