What is the meaning / definition of demand oriented pricing strategy in the hospitality industry?

In the Hospitality Industry, prices for services do not have to be permanently set. They can be adjusted, depending upon how many rooms, meals, etc. are needed by customers at any a particular time. This is what Demand driven Pricing is all about – the price of something changes depending upon how much demand there is for it at a given time.

So, you can see that dynamic Demand Pricing offers a lot of flexibility to hotels and other types of businesses in the Hospitality industry, which can only be a good thing!

Let’s look at a specific dynamic pricing strategy example:

A hotel in Wimbledon (London, UK) wants to make as much money as possible during the world-famous Wimbledon Lawn Tennis Championships. They know that demand for rooms and other services will be very high during that time in summer. So, they plan to increase their prices then, in parallel to demand escalation.

The economic ‘law’ of supply and demand is straightforward and universal. When managing revenue, making a pricing strategy Demand-Based is essential – a hotel can alter its room rates at different times of the year, instead of always being frustratingly stuck at one pricing level.

When demand is high, prices usually increase.
When demand is low, prices usually decrease.


Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.

Posted in Hotel Management

Hotel Mistakes; 5 common sins in Hotel Revenue Management

I have been in this hotel revenue management game for more than 2 decades now. And after all these years it still gets me anxious when I see hotels not performing at their full potential. So I have put together a list of 5 common mistakes made in revenue management in hotels, resorts and hostels.

Unfortunately, making just one wrong move can prove detrimental to your top and bottom line results. You could easily suffer less-than-stellar KPIs and lackluster market performance.

Here are several common mistakes we have noticed in hotels, to help avoid losing revenue potential in your hotel:

It is imperative to understand your target segment typical booking window when rolling out an offer. Failure to do so won’t help produce your desired revenue results and may even cause a complete flop of a promotional campaign. Missing out on key booking windows, even by as little as one day, is a catastrophic mistake and can be avoided by taking advantage of dashboard and reporting features in revenue management software.

Timing is not the only thing that is essential here.

The Xotels team more than anyone else is focussed on ‘speed to market’. Time is of the essence. We aim to be more dynamic and work faster (more output) than our competitor hotels. Slow implementation times are costing money. Dynamics is what can get you ahead.

Make sure you also pick and choose actions that actually generate revenue. A lot of time can be spend on many topics. The question is however how much does it bring in return to the bottom line. Unfortunately in many hotels a lot of time is spent on meetings, actions and promotions that don’t generate revenue. So measure what works, and ditch what doesn’t.

Efficiency and effectiveness should not be underestimated.

We agree on the importance of the Room Occupancy, of the understanding the business demand, and the need of to tracking on the pricing of the competitors, but the key for success on Revenue Management is on analyzing the ARR (average room rate) daily while improving the occupancy.

Too much focus on only Occupancy or ARR (average room rate), could erode the business.

In the end the bottom line is what counts. So a Revenue Manager should always be tracking the impact on the NRevPar (Net RevPar) or GOPPar (gross operating profit per available room).

Failure to change rates can prove to be a major revenue losing mistakes made by hotels. Static rates prevent you from reaching your full revenue potential. Instead, rates should be changed often to reflect supply and demand in order to maintain a steady pace of bookings. Extraordinary high demand can throw an additional level of complexity into pricing decisions. Understanding that extra demand is not necessarily going to be on top of your typical business demand is essential.

Haphazard pricing is also a common downfall for managers. By merely relying on a “gut feel” with no analytics behind your decision, you are only increasing your chance of making mistakes as well as missing out on other increase of revenue opportunities.

Hotel managers often fail to measure the impact of pricing strategy, something that can be easily achieved with the correct revenue technology and software. Revenue management software help you make data-driven decisions by providing vital information such as the booking history and details of rate discounts. With these solutions, managers can ensure they have a hotel revenue maximization while still offering competitive and attractive rates for guests.

Trust me when I say, the machine can help you uncover things you might not notice yourself that easily …

Understanding booking patterns must also include gathering data from OTAs. While they may have been dreaded and feared by the hospitality industry at first, third party booking sites’ popularity gives hotel managers no choice other than to embrace them.

You have to use them to your advantage, as distribution channels. This means that you do not simply jump on the bandwagon with any promotion or feature they are trying to sell you (background article). But rather you pick and choose what coincides with the strategy you have laid out for your hotel.

As rule of thumb, make sure that you control your inventory and prices across all channels. You should not offer lower rates on more expensive 3rd party channels, than your own direct website.

Leverage OTA for global distribution and future demand trends, and stay in control!

The final word: lessons learnt on your hotel revenue management strategy
While it was a prosperous year for many in 2017, it’s also important to realize that success doesn’t come without continuous evaluation and data analysis. Hotel managers should utilize data, trends and technologies to their advantage, ensuring positive revenue results and business success for their hospitality business.

Using the right revenue management tactics and avoiding the above mistakes, will make your hotel revenue management strategy more successful.

Hope this has been helpful!

Xotels provides Revenue Management Software and Revenue Management Consulting to improve your hotel performance.

Posted in Hotel Management

PMS System and Xotels collaborating to drive hospitality revenue management

We are excited to announce that Mews PMS System and Xotels are collaborating to drive hospitality revenue management to the next level! Hotel Scienz Revenue Management Software is developed by Revenue marketing Managers, for hoteliers. And we are actively building PMS interfaces.
Today, we are announcing the final piece of the puzzle getting Hotel Scienz integrated with one of the hottest cloud-based PMS offering out there – the Mews Commander PMS.

Did you know that the 90 percent of the world’s hotel properties still don’t use a professional revenue management solution despite the substantial revenue increase that it produces? And that the main reason behind is the belief that it is too difficult to handle? It is true that to run a professional revenue management strategy and execution, takes hundreds of pricing decisions, but the good news is that the entire process can be automated to help hoteliers to make not just better but also faster decisions.

At Xotels, we are committed to help independent hotels and resorts, private luxury hotels, youth hostels, bed & breakfast and campings on having the right and affordable resource to understand their own data, and to be able to manage their strategy of revenue management more effectively. This is the reason why HotelScienz was developed. Thanks to our revenue management software there is no need to understand complex statistics and scientific data because HotelScienz does it for you.

Xotels’ dynamic and affordable Hotel Scienz revenue management tool has been helping to boost yield across a vast range of properties, from luxury inner-city boutique hotels to youth hostels to beach and ski resorts.

The HotelScienz dashboard provides you with an overview of the most important KPIs, the pick-up, demand trends and the forecast; and the data is presented in easy-to-read graphs, charts and tables. As result of its algorithm calculations, it shows demand curves and price recommendations. And least but not last, it supports internal communication with the team and all stakeholders with a daily sales / pick-up report email, and month-end reports.

“We love finding ways to make our hotels more revenue and Xotels has been a leader in that very field with their ability to boost yield at hotels using smart revenue management algorithms,” says Mews Systems Founder, Richard Valtr. “It makes so much sense for us to be collaborating with the team at Xotels as, like us, they are passionate about upending the status quo and building dynamic cloud-based technology that is actually accessible. We are excited to be integrating them into the burgeoning family of apps that our PMS is able to offer to properties of all shapes and sizes.”

“Our growing management portfolio and our non-stop search for continuously improving technology has led us to the conclusion that the best way to move forward is to partner with companies that are experts leaders at their niche to develop together the final product that can completely satisfy our customers. We are working with the Mews PMS in various hotels in different countries, and our revenue managers love the agility of this cloud based system. It provides very good options to implement a dynamic and complex yield strategy.” Remko West, founder of HotelScienz and Xotels says.

Xotels provides Revenue Management Software and Revenue Management Consulting to improve your hotel performance.

Posted in Hotel Management

Record Performance for (luxury) Independent Hotels in 2017

Looking back at 2017, it was an incredible year for independent hotels. We have measured record performance levels at Xotels. Financial results based on revenue management strategies have never been higher.

So, let us run you through 2017 at Xotels …

Total Revenue €190.295.324

Rooms Sold 1.836.117

68 Hotels

We have grown our international hotel client portfolio by 39% and turnover by 26%. An amazing year …

We have also expanded into new markets like the Czech Republic, Portugal, Italy, Greece, Curacao. Highlights in the new additions are:

San Domenico Palace – Taormina, Sicily  (a 5 star, Leading Hotel of the World)
SafeStay Hostels – a youth hostel group
Almalusa – Lisbon Portugal
Hotel Himalaia – Baqueira Beret, Spain (ski resort)
BnB Manager – vacation rental apartments

As you can see we are expanding both into 5 star luxury as well as more budget products like youth hostels and airbnb type vacation rental apartments. Revenue management adds value for any lodging sector.

Lets look at some of the room revenue calculation and TRevPAR growth results we have achieved, of which we are extremely proud of course:

Destination: extreme Revenue Growth

1           Bruges, Belgium          62%
2          Mechelen, Belgium     49%
3          London, United Kingdom          36%
4          Porto, Portugal             32%
5           Edinburgh, United Kingdom    23%
6          Paris, France   21%
7          Seville, Spain  20%
8          Zanzibar, Tanzania       17%
9          Ibiza, Balearic Islands   18%
10         Maastricht, Netherlands         16%
11        Brussels, Belgium        16%
12        Granada, Spain 16%
13        Prague, Czech Republic           15%
14        Amsterdam, Netherlands        15%
15        Santiago de Compostela, Spain 14%
16        Barcelona, Spain         13%
17        Sicily, Italy      13%
18        Barcelona Spain          13%
19        Mallorca, Spain           12%
20         Seychelles      12%

Whether it is in primary markets, like London and Amsterdam or secondary destinations in Belgium, Spain and the Netherlands, with the strong demand, Occupancy and ADR can be driven up with strategic revenue management.

We see this working in both 5 star, Leading Hotels of the World, like the San Domenico Palace in Taormina Sicily, with a 13% increase in turnover, but also for youth hostels like SafeStay, or Ladys Mile holiday park in the UK with 36% revenue increase.

Unfortunately Barcelona did not end up as expected. The market was trending up 25% year over year, however the political instability in Cataluña has pulled down annual growth to 13% only, due to heavy revenue declines in Q4. But thankfully Brussels and Paris have started the route of recovery after suffering from terrorist attacks in 2016 and 2015.

Yes, we are pretty excited about what we have achieved in 2017 with our international portfolio of independent hotels.

And 2018 is not looking to change our growth trend. We are looking at onboarding a good amount of new properties, supporting investors even more in generating an ROI on their hospitality assets.

Besides providing strategic revenue management services to hotels,  we are also a boutique hotel management company, running operations and finance.

We are looking forward to what 2018 will bring us in terms of global expansion. The latest project we are working on is the opening of a new 5 star boutique hotel in Paris. We will update you soon on our adventures at Xotels …

Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.


Posted in Hotel Management

How hotel revenue tools Drives Profits for B&Bs, Small Hotels & Vacation Rentals

Hotel revenue management has seen spectacular growth in recent years. It has become such a fundamental part of hotel business strategy that it is now on an equal footing with marketing and sales in many hotels, and it is driving hotel profit growth.

Both chain and independent boutique hotels are turning to revenue to help drive hotel performance management in an increasingly competitive sector.

Although while the hotel sector enjoys the benefits of revenue management, there is still much room for other types of accommodation providers, including B&Bs and vacation rentals to adopt revenue management. Smaller hotels too are yet to embrace it to the same degree as their larger lodging counterparts.

Of course, this is due in large part to tighter budgets, but it is important for managers and owners to consider that it is an investment whose purpose is to produce greater returns.

Here at Xotels, we have seen the results speak for themselves for other types of accommodation provider, including holiday parks and camping sites. It is however important to note that while there are similarities, there are also a number of key differences to do with revenue management among different types of accommodation sector. Vacation rentals for instance have complexities that the hotel sector does not have to face, and a good system reflects this.

How revenue management helps small accommodation providers in 3 main steps

By focusing on three main areas, revenue management helps to drive success for small hotels, bed & breakfasts and vacation rentals. These three areas are inventory management, pricing tactics and measuring hotel performance.


  1. Inventory tracking management refers to optimising occupancy levels and room rates, dictated by market supply and demand. Your rooms are your key revenue driver – your most valuable asset – and therefore, revenue managers focus first and foremost on extracting as much value out of them as possible while minimising costs.

A good revenue management strategy increases your distribution channels and ensures that no double bookings take place with automated updates through a channel management system or 2-way interfaces. This minimises human error and increases efficiency across the board.


  1. Pricing tactics include all methods used to drive bookings at all times of year (and even the day of the week and time of day), and sales from elsewhere in your establishment, such as the BAR.

These include price changes based on market demand, which leverages market data analytics. Other tactics include cross-selling and upselling, and different rate sets to drive bookings. For instance, these should include regular rates, promotional rates, package deals, group rates (which should offer a discount for bulk booking) and last minute bookings.


  1. Performance measurement is crucial to see where refinements can be made. For small accommodation providers like B&Bs and vacation rentals, budgets tend to be more limited. For this reason, it is absolutely critical to measure your success on an ongoing basis. Your PMS should be set-up effectively with segmentation and channel source codes to demonstrate where your revenue comes from. This way you can evaluate where you can implement improvements. A reservations system is fundamental in producing precise on-demand data and automating much of the process.

The final word

Competition levels are on the rise, notably from AirBnB and other peer to peer platforms, OTAs and rival hotels. In an ultra-competitive accommodation sector, B&Bs, vacation rentals and small hotels have to adopt and master new tactics to remain competitive.

Technology-based solutions are now replacing legacy and manual systems, and the small accommodation provider that neglects to consider them runs the risk of falling behind. On the other hand, fully embracing technology-led solutions like a revenue management system can offer your establishment an essential advantage and help drive your profits to new heights.

For your reference, at Xotels, we have taken on the Revenue Management for various small hotels and bed & breakfasts. We have seen increases of financial performance of 20% revenue growth and above. Yield management, online distribution and digital internet marketing are key parts your property needs to master, to be competitive and drive topline revenue and bottom line profit. If you need some support, we would gladly be of help …

Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.

Posted in Hotel Management

Foster your Direct Hotel Booking Strategy to Reduce OTA Commissions

Here is the fact, Direct hotel bookings have become a key objective for hotels large and small, and is one of the top recommendations at an efficient Revenue Management strategy. In an ultra-competitive sector, through moving room reservations away from online travel agencies (OTAs) and other third parties, direct hotel bookings make possible to take advantage of important opportunities such as repeat bookings, cross-selling and up-selling, and increased brand loyalty, which all ultimately lead to higher revenues and higher profits.

Does your hotel rely on OTAs for bookings? Would you prefer to have more reservations made directly with your hotel? In this article, we look at what your hotel can do to take the initiative back from OTAs (and your competitors) and implement a successful direct hotel bookings strategy once and for all.

  1. Forget about the classic loyalty programme

    Independent Hotels yet to focus on direct bookings as part of their overall business strategy can learn from the chain groups that have already invested in their own programmes to drive occupancy levels and customer loyalty. Brands such as Hilton, Choice Hotels and Marriott have reported positive results so far with their own respective direct bookings process. Hilton, as an example, added nine million more members to its loyalty programme in 2016. Loyalty members drove 56 percent of the hotel’s system-wide occupancy rates and web-direct and mobile bookings were up by 200 basis points compared to 2015. By starting your own loyalty programme, you can include incentives to drive repeat bookings such as discounted room rates.

But, will the loyalty program of a chain work for an independent hotel? Obviously not, because boutique hotels with unique hotel concepts have refined customers who look for smart deals that amaze them. For more background on our thoughts on this topic, have a look at our article hotel loyalty programs.

Through cross-selling, you can also offer promotions across the hotel, advertise additional services, products and member-exclusive package deals.

Tip: Consumers nowadays are looking for an instant reward, and don’t really like to save up points or credits. So why not simply give them a 5% discount option to sign up for. And make sure it is available directly (don’t let them wait for the sign-up confirmation email).

  1. Squeeze your communication channels

From email marketing to social media, and from hotel review websites to your own website, the success or failure of your direct bookings strategy will depend in large part on the effectiveness of your ability to harness the communication channels at your disposal.

Your hotel marketing plan and strategy can include a focus on advertising your loyalty programme on social media and via email with a focus on driving customers directly to your website. You can invest in online targeted marketing, including the use of paid campaigns on Google and social networks. Your email strategy should include an after-sales correspondence campaign to increase guest engagement, generate feedback and drive future bookings. For a direct bookings strategy to work, it needs investment, which could end up being less than the commission that you pay OTAs with more profitable results.

Tip: Send a post-stay email requesting a guest review on TripAdvisor or Google, and include a discount code of 10% off for their next stay (which can obviously be shared with their friends and family).

  1. Let every detail be covered by a innovative hotel concept

Ask yourself, why would a guest want to return to our hotel instead of shopping around for somewhere else? What do we offer our guests that sets us apart? Do we offer an experience rather than a service? Do we have a unique history, a unique food menu, or other unique selling points (USPs) such as our hotel’s settings that can drive direct bookings? If you cannot reply yes to these questions, you clearly need to work on an innovative hotel concept.

Your USPs differentiate you from the rest and they can persuade a guest to book directly with you rather than visit an OTA to consider the competition.


Tip: Start with using your room-types as sales tools to position your hotel uniquely.

  1. Turn your customers into brand ambassadors

By offering current guests an incentive to recommend your hotel, you can drive direct bookings. An incentive can include anything from a discount on a future booking; an exclusive offer for other hotel services such as a meal, a relaxation session at the spa or a round of cocktails at the bar. You can go further and throw in a free diner if a recommendation leads to a booking, and so forth. What it all comes down to essentially is your cost of hotel customer acquisition. It might seem an expensive option at first to incentivise recommendations, but when you compare it with other sales and marketing (advertising) costs, a referral programme can often be an inexpensive method to drive direct business and, accordingly, to increase your REVPAR.

Tip: When connecting to the Wifi of the hotel, request a share with a pic or video on FaceBook, Twitter or Instagram …

  1. Put to the OTAs on its right place on your revenue management strategy

While many hotels have reported positive results from their direct bookings strategies, it is also critical to understand the essential role that OTAs still and will play. Many hotel customers are open to, and interested in, joining loyalty programmes and booking directly, but there is also a large cohort of customers who prefer to book via OTAs.  In addition, OTAs offer customers a quick means of carrying out research and comparing hotels. There will always be guests who prefer shopping around, despite best efforts to nudge them towards direct bookings. These OTA guests go a long way to filling occupancy levels, particularly in times of low activity, and their importance to the success of your hotel cannot be understated.

However, your hotel should follow its own strategy when it comes to pricing and distribution, and not pay too much attention to the ‘commercial’ advise of the OTA market manager. At no time should we give 3rd party channels rates that are lower than we have publicly available on our own website.

Tip: So this means no discounts for loyal OTA members (read Booking Genius etc), or other schemes and programs. They are designed to undercut your public BAR rate. So simply don’t do it if you want to grow your direct sales.

  1. Best Rates Direct

A good percentage of customers say they ended up booking through an OTA because they assumed (and because they did not check it) that the hotel website would have worse price or conditions (type of bed, payment method than in OTA).

That’s why hoteliers should do everything possible to highlight the advantages of direct booking on their website instead of the OTA.

Tip: Mention it clearly on your website, booking engine, emailing and advertising that to get the best rate they need to book with your hotel direct.

The final word: Foster your direct hotel bookings strategy to drive you hotel revenue

Direct bookings strategy has become essential to hotels, hostels and resorts around the world and it offers ample growth opportunity and client retention for independent hotels. It should be crucial at our revenue management strategy, turning one-time guests into loyal, repeat customers.

Be loyal to your own hotel concept. Lead your booking channels. Make your guests love you and recommend you. Spread hotel uniqueness… And see how your direct bookings and your hotel revenue increase.

And to show you it works, we will shortly share case studies of our best performing hotels which achieve over 50% direct sales.

Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.

Posted in Hotel Management

What is the meaning of BRG – hotel best rate guarantee?

BRG stands for Best Rate Guarantee.

The hotel makes a promise that the room prices found on their website are the best room prices compared to other any other sites.

Hotels implement the BRG policy (best hotel rate guarantee), to drive consumers to book directly via their own website, instead of the third party OTA. OTA’s are of course giving the same promise as they want to encourage consumers to book their hotel and stay with them.

The policy in general outlines that if within 24 hours to make a reservation for a hotel, a customer finds a reduced hotel rate for the same hotel, room type and reservation dates, and submit a qualified guarantee form, the hotel should match the rate and give you an extra discount on the room.

The best rate is of course relative, as it does not have to be lower, the same rate is also the best in this case.

Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.

Posted in Hotel Management

Booking Window definition? What is the exact meaning?

Booking window is similar to booking Lead Time. It’s the period of time between making a hotel reservation by the guests or a group and the actual arrival date to the hotel.

How to explain lead-time or booking window?

Different market segments can have different booking windows. It is important to consider the booking window to properly evaluate the financial performance of the hotel and make proper pricing decisions.

If for example your hotel have a booking window of 30 days there might be no need to pull down your price for a certain day with 50 days of advance although you have low occupancy for that specific date.

Higher lead-time bookings tend to come from long-haul markets with flights involved. They also tend to have a higher average length of stay, meaning if your offers are designed to appeal to this segment and are sufficiently differentiated, you will gain business.

Understanding the booking window today is significant considering that the number of channels have exploded and all have vastly different characteristics. Indeed, wholesale, corporate, direct, online travel agents and MICE (meetings, incentives, conferences, and exhibitions) all act differently if you want to do your revenue management optimization. It is essential to be aware of lead times, volumes, average revenue and total revenue generated from all of these…

Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.

Posted in Hotel Management

The Top 5 future trends in hospitality industry in 2018

Hotel revenue management trends move fast. The sector has evolved at a remarkable pace and is set to continue this course. It’s an exciting time to be a part of such a fast-moving industry and hotels can benefit from taking advantage of the new trends that are shaping it.

Let’s take a look at the top 5 trends and changes that are driving hotel revenue management.

1. A shift to profit management

An increasing number of revenue managers believe that hotel revenue management has already moved to a specific emphasis on profit management. This may well be what we come to call our profession before long. A focus on profit has become more prominent as revenue managers move on from a reliance on the traditional key performance indicators (KPIs) of total revenue per available room (TrevPAR) and revenue per available room (RevPAR).

Instead, revenue managers will use gross operating profit per available room (GOPPAR) as the main KPI. This puts profit at the centre of revenue management strategy, and managers will increasingly search for new techniques to increase the profitability of their hotels.

A KPI we have been advocating of as well is NRevPAR or NetRevPAR, it is a step towards GOPPAR from RevPAR, taking into consideration cost of distribution and marketing. It focusses on a net reservation value.

ROI is the objective of any hotel investment, so it is only logical the focus on profitability and ROI will continue to sharpen.


  1. An increased focus on direct hotel bookings

    Revenue marketing managers know that one key area to drive profitability is to steer guests away from online travel agencies (OTAs) and book directly with the hotel. This increases brand recall and loyalty, and generates repeat business. It also offers a unique platform to market the hotel via direct communication channels with the customer, offer deals and upsell additional services or room upgrades.

    OTAs of course have an essential role as a reservations source but they come a distant second to direct bookings for the hotel that takes profit maximisation seriously. To persuade guests to book directly on the hotel website, the benefit must be clearly presented to the would-be guest. Why should they go to your hotel’s website instead of to an OTA? What is the advantage? This is where revenue managers will ramp up focus.

    3. Greater efficiency in use of data

    Hotels are inundated with all types of data metrics now. There are many KPIs and types of hotel big data to work with. This makes it even more important to understand how to leverage it, to cut through the data thicket and mine it for its true worth. Efficient use of customer data provides key takeaways that in turn drive business decisions.

    An RMS that encompasses data reporting and analysis tools is increasingly seen as less of a luxury and more of a necessity. This helps drive profits via the insights that efficient use of data provide.

    Revenue managers are increasingly working out new and improved ways to combine KPIs with specific data types. Software including customer relationship management and resource planning tools provide essential data and will continue to proliferate in use.

    4. Technology enhancements in revenue management

    The technology that powers revenue management systems is constantly changing. One of the most important recent, ongoing changes is the increased presence of automation. RM systems with automation are much more preferable than without. Automation increases RM efficiency and helps managers focus on driving profitability. They can spend more time on strategy, while data entry and logistics are automated.

    As a bonus, an automated system helps with aggregating and interpreting data. Other new trends in RM technology are the increasing prominence of machine learning and predictive analytics tools.

    Technology that integrates with the revenue manager’s workflow is key. This can include communication channels management systems, guest review systems and benchmark reporting systems.

    5. A continuing shift in focus to mobile

    The shift to mobile is not entirely new. 2017 in particular saw a significant rise in mobile interaction and bookings. But, it is set to rise further. 2018 will see even greater focus on mobile. Increasing revenue and profits will be increasingly dependent on a mobile website that delivers high performance.

    For this reason, revenue managers will be keen to ensure that hotel websites are optimised for customer engagement, measuring hotel performance and business generation. Moreover, websites must be continually updated and maintained for optimum performance. It will be absolutely critical to the success of a hotel in 2018.

Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.

Posted in Hotel Management

The Changing Role and Future of Revenue Management in the Hotel Industry in 5 Steps

Revenue management in the hotel industry is still relatively young. While it began in the 1990s, it has really bloomed and grown exponentially in the last decade, particularly in the last few years. In this time, it has been overshadowed by other departmental functions within the industry, such as sales and marketing. Revenue managers, in comparison, have worked behind the scenes and tended to report to these departments.

But not anymore.

Hotel revenue management is moving front and centre of the overarching business model for many hotels, and this trend is only set to rise further. In this article, I discuss its changing role in the hotel industry and what we can expect to happen in the near future.

  1. Revenue management is levelling upAt Xotels we have seen a growing trend of hotels elevating revenue management’s role. Many now look to take advantage of analytical insight and strategic knowhow that uniquely come from revenue management.

    This insight and knowhow supports key business decision-making. Increasingly, revenue managers are sitting in on executive committees, equal in status and stature to the marketing and sales department heads.

    Many hotels no longer have a revenue manager but rather a director of revenue management, having upgraded the importance and weight of the role. No longer are they reporting into the DOSM. They have a straight line to the general manager.

    2. The role will continue to expand

    Revenue management undergoes constant change, more so than other departments. This is because it is rooted in technological capability. Technology will continue to evolve and more sophisticated methods of guest analysis will come to the fore, as revenue managers keep searching for ways of becoming more competitive.

    This constant change has contributed in large part to the expanding roles that today’s hotel revenue manager is charged with carrying out. After all, it is through inventive marketing strategies that hotels can generate business. Ecommerce, social media, client engagement and relationship management have all become central to the revenue manager’s job in order to drive business.

    Some additional roles include:

    Managing the hotel’s online presence and reputation

Overseeing website digital marketing strategies

Customer communication and engagement initiatives

Technological development of the hotel services, facilities and procedures

Identifying new markets and new opportunities within current markets

Product evaluation, business development and capital investment recommendations

Today’s successful revenue manager must wear many different hats. And it is exciting to see how this will evolve further with new technologies, customer trends and innovation in hotel industry.

3. Total hotel revenue management will be unleashed

This is a concept that has been discussed for a few years, but it looks like it can really begin to take hold soon. Total hotel revenue management expands from a focus only on room revenue calculation to encompass all other hotel revenue generators.

These include the hotel restaurant, space rental, room service and leisure facilities. According to a recent study by Cornell University, 63 percent of revenue managers believe that the concept is on the verge of breakthrough.

Can you imagine how important this will be for revenue management? Its development could make it the kingmaker department in the industry at large.

4. Profit management will take centre stage

The elevation of revenue managers in importance to hotels comes down to one thing: they are uniquely positioned to help drive profits. The function is increasingly seen as profit generation rather than revenue management.

Revenue managers are pivoting to a focus on increasing profit margins rather than on increasing revenue. The ideal is of course to do both. It’s great to grow, but it’s better to do so with higher profit KPI’s.

This focus on profits will sharpen in 2018 and beyond, as revenue management uses new methods to understand guests better and improve margins.

5. Revenue managers will focus on guest analytics

The hotel sector is probably more competitive than ever before. Hotels aren’t only competing with their cross-town rivals, but inter-city and even international counterparts. Online travel agencies, the rise of hostels, and high guest demands make the industry even more competitive. So, hotels are turning to hospitality data analytics; and new technology is making efficient analysis that produces unique, valuable insights possible.

The final word: Get used to constant change

‘The only constant in business is change’ is an old business maxim. But for revenue managers, it is particularly applicable. Let’s look at just some of the recent changes to the role: adapting to the new guest expectancy of unique hotel experiences and nothing but the best service; the rise of technology-driven solutions; data analysis and use of communication channels to build relationships with guests long after they have checked out; and not least, the importance of mobile strategy to hotel success.

These represent a lot of changes, but revenue managers must continue to adapt and anticipate future trends. The most thrilling thing of all is that most hotels still don’t use a revenue management system, but they are catching on to the benefits that they are missing out on. This is great news, as revenue management is set to continue growing and to play an even more important role in driving the success of hotels.

Xotels is a leader among hotel management companies with a focus on hotel revenue management. We help independent hotels outperform their competition.

Posted in Hotel Management