What does the future look like for revenue management in 2023 and beyond?
In the ever-changing world of hospitality, revenue managers in 2023 will need to keep a closer eye than ever on the impact of whole range of new external factors on traveller behaviour.
We all know it’s been a turbulent few years for the hospitality industry and, of course, the world beyond. Not only are we all recovering from the devastating impact of the Covid pandemic and lockdowns, there’s also the after-effects of Brexit, the cost of living crisis and Russia’s war in Ukraine pushing up global oil and food prices.
All of this and more will affect consumer spending and behaviour.
The revenue manager in 2023
Of course, revenue management, and in particular the role of the revenue manager, has undergone some seismic changes in the last 5, 10 and 20 years. Gone are the days of the revenue manager poring over an Excel spreadsheet, compiling data to identify trends in hotel rates for rooms that were booked through either travel agents or direct phone calls.
These days, successful revenue analysis involves so much more – the digital age has seen a massive shift in the way in which we can collate and analyse information, as well as the vast quantities of data that’s available for us to use.
Online travel agencies (OTAs) and mobile marketing have had huge impacts on the way consumers now search for and book their hotel stays, and the hotel revenue manager has had to keep up with these changes.
So in this ever-changing world, how can we predict what’s next for revenue management in 2023?
Bigger opportunities for smaller hotels?
A lot of smaller hotels have found it tough to compete with the big chains historically. Massive advertising budgets that dwarf anything an independent can put aside mean it’s always going to be a struggle to be seen as easily.
But smaller hotels could see themselves gaining something of an advantage over their Goliath rivals in 2023. Many smaller hotels found they were able to respond much more quickly to developments with Covid for example – bigger chains tend to have less flexibility, plus heftier overheads mean recent price hikes have hit them hard.
Hotel revenue managers who keep their finger on the pulse could take full advantage of the ever-increasing power of internet search engines such as Google and metasearch channels like Trivago and Kayak. Continually tracking consumer behaviour and trends, and checking website SEO and SEM reflects it, will ensure your digital presence is fully optimised to drive more direct sales. This is just one way that smaller independents will feel the benefits of a tech-savvy hotel revenue manager.
With the world at their fingertips, consumers are able to be far choosier about where they splash their hard-earned cash, especially as the cost of living increase curbs spending power for everyone. Hotels that have something unique, new or trendy to offer will always appeal to the discerning traveller – qualities that chains with large numbers of properties to manage will find difficult to satisfy. Good hotel revenue management that can strike the right balance between human intuition, SEO technology and website analytics will increasingly have the edge over the competition.
Social media-savvy revenue management is ever more important
Social media is yet another revenue channel that continues to evolve and grow in popularity and power. While many hotels do well at generating interest and conversing with their target audience through social media, few have yet managed to monetise these opportunities.
Being able to channel the right marketing at the right audience at the right time through social media will become more and more relevant to the hotel revenue manager’s role in the future. So again, the revenue manager who can keep up with evolving technology and behavioural trends could be the making of smaller hotels.
Hotel revenue management in 2023 – more than just the right room rate
In the past, revenue analysis was restricted purely to the price that rooms are sold and booked at. But this role is changing and growing with the technology available to us.
Revenue management now includes other revenue streams such as a hotel’s function space, spas, restaurants and other facilities. This means the revenue manager of 2023 needs to take a more holistic view, focussed more on the total revenue available per room, rather than simply looking at basic sales.
One thing is for certain: good hotel revenue management will continue to be a central element to the success of a hotel.
Is your hotel geared up to ensure your revenue managers can meet the challenges of 2023 head-on? Octopus Revenue’s online revenue management training could help to future-proof your hotel profitability. Get in touch or take a look at our courses if you’d like more information on how we can help.
