Revenue Management

IDeaS Q&A: Adapt your revenue management to changing demand

Performance, profitability and adapting to changing booking patterns will be on the minds of the AHC’s audience in Manchester in September, as the discussions focus on the theme Adapt to Thrive.

Ahead of his participation to the event, Warren Mandelbaum, Principal Sales Director EMEA at revenue management company IDeaS, shares his thoughts on the trends and data that will help UK hotels optimise profits and increase efficiency. 

AHC: What major trends are you witnessing in the UK that are affecting hotel performance?

Warren Mandelbaum: Demand patterns have dramatically changed since pre-Covid levels with vast number of hotels experiencing higher occupancies, shorter booking windows and differing length of stays depending on their corporate vs group/leisure business.

The British weather has also contributed to a change in booking behaviour and whilst numerous hotels have seen business in weeks they would not have expected, we are also noticing that hotels are picking up business in months they would normally be at low occupancy thanks to difficulties associated with air travel of late. Group and MICE business has now returned and hotels are excited at the prospect of seeing this segment grow.

The constant change in demand coupled with erratic buying behaviour is a challenge for any revenue manager trying to ensure the appropriate pricing is in place at the right time and ensuring that any sudden demand is capitalised on.

AHC: In a time of increased competition, what can hotels do to capture more guests while keeping the cost of customer acquisition lower?

Mandelbaum: Driving more direct business is always the most obvious strategy, however, this only accounts for a limited share of overall business against the OTAs. Loyalty programmes have also contributed to locking in repeat business and along with a variety of fenced and targeted promotional discounts, technology has allowed a revenue manager to restrict concessions when the hotel demand requires it.

AHC: How can hotels adapt to changing booking patterns such as later bookings, longer shoulders?

Mandelbaum: Depending on the nature of business, i.e., city stay hotels vs resorts, a change in booking behaviour can only be managed by understanding past and future trends, coupled with competitive hotel behaviour and your own hotel performance. A Revenue Management System understands these trends in real time and can capitalise on high demand dates by optimising pricing whether it be for one night or including stay-throughs to maximise shoulder nights with the use of pricing and/or restrictions by room class and room type. Similarly, where there is a lack of demand on certain days, an RMS system will constantly be keeping an eye on those shoulder nights which may be in high demand.

AHC:  Beyond room rates, how can hotels capture profitable guests and increase spend on ancillary revenue streams?

Mandelbaum: It is all in the marketing of non-room revenue generating streams such as F&B, MICE, golf and spa. Combining these offerings with added value promotional packages makes your property more attractive than the competition and more desirable to be booked over a property with an offering less desirable. If you have the luxury of promoting experiences or unique attractions of your property - all with an added value message, including a discount if booked direct, these other non-room revenue-related products will not only win over the competition but also boost your ancillary revenues.

As Revenue Management Systems evolve, the journey towards profit optimisation considering both channel costs and cost of service become even more important in discriminating which market segments are more attractive than others, leading to net profit.

AHC: How can technology support hotel businesses to adapt their business and thrive in the longer term?

Mandelbaum: Every hotel is seeking to achieve sustainable RevPAR growth with obvious increases year-on-year accounting for rising energy and staffing costs. Investing in your technology stack benefits all areas of productivity through automating mundane manual tasks, keeping head count to a minimum and allowing for more experienced strategic revenue management. It replaces tactical workloads and ensures no money is left on the table by optimising your pricing for the year ahead across every level of business including market segment and room class/room type.

With the ongoing challenges of recruitment and retention an issue for many hotels, technology payback in a matter of months proves the benefit of your investment in the shortest possible time no human is capable of replicating. 

AHC: What are you most looking forward to at the AHC?

Mandelbaum: What will the outlook for the year ahead be, and more importantly, what do the speakers and panellists suggest as the best way to mitigate risk and exploit opportunity?

With a wealth of experience and knowledge to tap into at the event, I always come away enriched with new ideas and practical strategies. The networking is second to none and I look forward to welcoming anybody interested in how technology can support your manual strategy to come meet with the IDeaS team over the conference dates.

IDeaS will be represented on the AHC programme by Michael McCartan, Area Vice President, EMEA, who will be presenting on ‘Unlocking Success: The value of a Fit-for-Purpose RMS’ on the Spotlight Stage, and moderating the session ‘Community Chest: There's Riches in the Niche’- on the Collaboration Stage.

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