Revenue Management – A Game-Changing Function
Revenue Management is now being looked at as a need to do things differently. It involves a lot of risk-taking backed by strong analytics. The answer to whether one should go beyond threshold inventory levels to optimise revenues lies between a yes and a no.
THE INDIAN Hospitality segment has evolved at a notable pace and is all set to continue this course. It is an inspiring time to be a part of such a fast-moving industry, especially in terms of revenue management. Brands can benefit from obtaining the new trends that are influencing and deciding the growth of revenue in the segment. Revenue Management is now being looked at as a need to do things differently. It involves a lot of risk-taking backed by strong analytics. The answer to whether one should go beyond threshold inventory levels to optimise revenues lies between a yes and a no.
With this logic, we at Keys Hotels started working on a holistic solution to drive better revenues. We wanted to bring in a change in the thought process of how to drive better revenue versus traditional Occupancy, ARR and RevPAR modules. This thought process further needed an alignment across various levels involving Sales, Operations, MIS/Analytics and Marketing teams.
In order to bring about the change in thought process, we focused on building a team which ranged from resources who have worked with Hotels (both branded/chains and standalone), Airlines, Online Travel Agents, Aggregators and Financial Institutions. Having such diverse pool of talent, all aligned with a thought process to drive better revenues and each one of them having a unique input to focus on specific levers of revenue management, gave us an edge to not only grow the business but to also create a value chain for our business partners.
As a strategic data-backed approach, we utilise revenue management levers like booking window, a day of the week, channel mix, time of booking, price elasticity, etc. along with digital trends, online reputation scores and customer-centric approach to take decisions on price points for any date in future.
We have created a coherent inventory distribution plan across channels to maintain efficiency in our revenue management strategy. Over recent years, digital platforms (especially our own website) have become the most prominent sales channels in terms of boosting revenue and profitability. A revenue opportunity exists with a very minuscule shelf life and hence we automated the process of our pricing distribution with the help of our technology partners. The automated system understands the sensitivity of changing the price points based on levers like booking window and time of booking and implements the same even when a room gets booked at midnight. The end result is sweet as we have seen our ARRs grow in double digits (15-35%) and in some markets, we have moved from being followers to being leaders.
Change is prominent and hence we keep introducing dynamic offers depending on price sensitivity aligned with seasonality in demand. We can claim to be pioneers to
launch an offer to discount our higher category of rooms based on the live temperature of the city where the hotel is located. The activity not only increased our website traffic manifolds (300% above normal traffic) but the business generated is now a success story on the walls of our corporate office.
We believe in characteristically selling what is most feasible for our guests. To exceed expectations by offering them experiential stay, in line with what they seek, we look to further innovate by offering a pick-and-choose package which would help us create dynamic content for boosting organic traffic to our website. The services and facilities on the offer would be available for sale in the form of the shopping cart and this would assist our guests in hand-picking only what they need.
As a leading brand in our segment, our single-most important promise to our guests is to give them a happy stay. While our strategies help the guests to pick the best price and product, our operations team at individual hotels go out of their way to ensure that the guest is having a great time – right from check-in to check-out.
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