Looking to increase your revenue performance? Automate the tactics and focus on the revenue strategy.
In this presentation, Catala Consulting presents the evolution of hotel revenue management in the last few years and the step-by-step process to develop a revenue strategy in your hotel.
How to Shift from Hotel Revenue Management to Revenue strategy
1. FROM REVENUE MANAGEMENT
TO REVENUE STRATEGY
Thibault Catala, Founder & Managing Director Catala Consulting – 2021
2. Agenda
1. Presentation objectives
2. Catala Consulting: our story
3. The evolution of revenue management
4. How to build a revenue strategy
5. Learnings, take-aways & Q&A
2
Don’t worry, it’s short. But sharp!
4. What this presentation is all about
4
Revenue
Management
Fundamentals
• What is revenue
management?
• Basic principles
Evolution in the
last years
• From Descriptive to
Prescriptive
• New technology
available
Practical Advice
• Leverage Technology
to shift from tactic to
strategy
• How to develop a
revenue strategy
6. Our Story
WHY
We imagine a world in
which the vast majority of
hospitality professionals
have access to all the
tools, techniques and
expertise usually reserved
to the top 1% hotel chains,
in order to achieve their
business goals.
6
HOW
We provide consulting
services to hospitality
professional worldwide
that are simple and
effective.
WHAT
We offer the following
services:
● Outsourced Revenue
Management
● Hotel Revenue
Management Audits
● System
Implementations &
Upgrades
● Asset Management
8. Revenue Management is selling..
8
RIGHT
PRODUCT
RIGHT
CUSTOMER
RIGHT PRICE RIGHT
CHANNEL
RIGHT TIME
9. 9
Limited number of inventory to sell
FIXED CAPACITY
2
Differentiation in customer types
SEGMENTED MARKETS
1
Inventory not sold today has no value
Can't be sold tomorrow
PERISHABLE INVENTORY
3
High fixed costs and low variable costs
LOW MARGINAL SERVICING COSTS
4
Booking requests are tendered in
advance of date of arrival
ADVANCE SALES
5
Guest demand varies by season, DOW
and time of day
UNCERTAIN DEMAND FORECAST
6
Characteristics of Revenue Management
15. 15
Evolution in the last years
1/ Quick history:
• Start: revenue management with airlines
• Hotel: Late 1980s Marriott
• Today: total hotel revenue optimization + all
verticals (restaurants, groceries, tickets, …)
2/ Beginning:
• RM practices deployed manually (pricing,
data analytics, inventory controls, …).
• Reservations manually recorded
• Static pricing (max seasonality)
• Reservations Manager / RM
• Uncomplicated time and uncomplicated
landscape for hoteliers and consumer.
3/ Development:
• Started to introduce dynamic pricing (day,
room type, segments, ..)
• Still manual work (even more time
consuming)
• Growing distribution landscape
• RM reporting to GM (growing importance)
4/ Today:
• Complex environment (explosion of
distribution channels, user generated
reviews, real time dynamic pricing, big data,
new technology,…)
• Automation of revenue optimization to meet
new demand faced.
• RM at the centre of the attention
16. 16
From Descriptive to Prescriptive
Fundamentals remain the same
Approach has changed as technology has
become part of the revenue optimization
discipline:
- Rate shopping tools and other BI tools
- Advanced RMS (powered by AI to find the
optimal pricing by room type for the next 365
days)
Revenue optimization will continue to evolve
and grow in complexity, and will certainly
become more of a science.
The next step for Revenue Managers is to focus
on Revenue Strategy.
18. 18
Understand Hotel &
Market
Set OKR (Objectives
and Key Results)
Review Technology
operations
Implement/automate
reporting
Implement/automate
tactics
Accurate Forecasts
Develop a Revenue
Strategy
Constantly review
performance
Our Unique Method at Catala Consulting
19. 19
Develop your revenue strategy – What to include?
Demand targeting
Acquisition Planning
Customer Retention Plan
Channel Costs
Acquisition Costs
Channel Shifts
Revenue per Available Customer Value
27. Key Take-Aways
27
Revenue
Management
Fundamentals
RM becoming
more complex
Automate
tactics to new
technology
Focus on
Revenue
Strategy
Develop the
hotel Revenue
Culture
Move from
Descriptive to
Prescriptive
Demand targeting
Acquisition Planning
Customer Retention Plan
Channel Costs
Acquisition Costs
Channel Shifts
Revenue per Available Customer Value
What to include in the Revenue Strategy
Learnings from this session