In an ideal world, hotel revenue management and marketing teams would work in tandem to drive direct bookings, optimize net RevPAR and improve the bottom-line. Yet, the reality is that operational and time pressures combined with differing KPIs often see these two mutually beneficial teams working separately.
Important insights that could help choose between running a promotion or changing rates is often not considered worthy of sharing, making overall decision making less effective.
But change is afoot. Hotels are recognizing the transformative opportunities of aligning their revenue and marketing teams around a data-driven strategy that goes to the heart of the hotel’s business success and revenue intelligence tools are at the heart of that change.
Here, we explore the key components of achieving synchronized revenue management and marketing teams that deliver tangible performance improvements.
From competitive to collaborative
A lack of communication between revenue management and marketing has often led to a sense of competition between the two disciplines each using their own set of metrics to try and outshine the other.
Imagine if they combined their data analytical skills, creative approach and in-depth knowledge of their product. How powerful that would be.
Achieving that requires a change in mindset, the breaking down of barriers and a realization that it’s a win, win for both teams.
And, it’s not just better alignment of revenue management and marketing that delivers revenue and bottom-line benefits. Having all teams aligned around a single source of trusted, dynamic data ensures all employees become more focused on profitability and the need to be more efficient.
The General Manager can balance out the sometimes competing priorities of different departments – whether it’s the sales team’s focus on driving volume to fill the hotel or operations’ commitment to guest experience – by having a clear view of the entire hotel’s performance, everyone can understand how their actions influence the overall performance of the hotel.
As hotels refocus on ways to drive further revenue from their rooms and optimize their bottom-line, teams have little option to explore how they can work more closely together. With new technology such as revenue intelligence tools providing easier access to the same data, bridges are being built…
A joint purpose
The role of marketing and revenue management has seen seismic changes in recent years with both becoming reliant on big data and increasingly focused on personalizing the guest experience.
By fostering a collaborative approach, agreeing on joint strategic objectives and formalizing how the two will work together both teams can benefit from the other’s insights and activity – enhancing not only their results but also how they are viewed by the leadership.
Data should be at the heart of the strategy with regular meetings ensuring approaches are measured, managed and evolved.
Both disciplines have a slightly different focus which complements the other. Marketing is focused on the guest with an in-depth understanding of their key personas such as demographics, how far in advance they book and why they are booking. They use this data to tailor activity to appeal to each segment through the most effective channels.
Revenue management has the best understanding of booking data, distribution strategy and demand trends. They have a strong understanding of how booking patterns and historic demand impacts pricing strategies.
With revenue management and marketing aligned around the data, monitoring it around the clock and sharing their insights, both teams become more agile and able to identify and respond to opportunities quickly.
Increasing direct bookings
Revenue intelligence has been shown to increase direct bookings. Strategic rate matching combined with highly personalized hotel packages and services are helping hotels to increase visitors and sales on their brand.com.
This helps them to have a greater influence on their guests’ experience much earlier – optimising opportunities to increase revenue and build greater loyalty. Additional revenue opportunities can include room upgrades, breakfast and additional services and packages.
Unlocking the power of guest insights
Investing in technology such as revenue intelligence tools is providing hotels with an ever more detailed understanding of their guests.
A combined stream of data from sources such as Google Analytics, channel breakdown, pickup reports, property management systems and other revenue streams such as food and beverage enable both revenue management and marketing to build a sound understanding of their guests.
This ensures all activity is focused on increasing direct booking, maximising revenue opportunities during their stay and building loyalty to encourage return bookings and recommendations.
Activity can include:
Booking behaviours: revenue managers can work with marketing to identify key booking trends and create marketing campaigns around those. For example, if historical data shows that families tend to book six weeks ahead of school holidays then campaigns can be timed accordingly.
Booking evolution: exploring how your and competitor pricing has impacted bookings is crucial. If hotels witness a spike in website views, for example, without the same percentage converting into bookings then price may be an issue.
Tailored packages: understanding why guests are staying at the hotel is a basic requirement for marketing and enables them to create targeted packages. If demand increases when there’s a show on at the nearby theatre – a theatre package can be offered to attract more guests.
Low demand: every hotel has days that perform less strongly than others. Understanding when these are enables marketing to promote availability – running offers, a flash sale or increasing the hotel’s prominence on social media, OTA channels and metasearch.
Upselling: activity doesn’t end when the guest books a room. For many hotels, there are significant opportunities to enhance revenue from its restaurant, bar, spa or even casino. Working together revenue management and marketing can identify these opportunities and take steps to improve the performance of these areas.
Adding value instead of reducing price
While price will always be a critical component of every hotel’s distribution approach, with better alignment between revenue management and marketing hotels will become less reliant on reducing room rates to secure bookings.
Instead, drawing on actionable insights from improved data will optimise the guest experience right from the moment they first come into contact with your brand to after they have stayed with you – increasing direct bookings and building a pool of loyal visitors.
Every hotel will take its own approach to better alignment between revenue management and marketing but the is a growing acceptance that whatever route the path to successfully increasing top and bottom-line results requires these two disciplines to work in partnership.
How can revenue intelligence tools help hotel chain owners and operators develop data-driven teams? Read our blog to find out.