Brought to you by IDeaS Revenue Solutions
This article is taken from IDeaS eBook Revenue Perspectives: Quick Hits for Strategic Revenue Insights. Vol. 3 Enhancing Non-Room Revenue. Download a copy here.
Hotel revenue management today has a rather established set of tools, business processes, and expertise to support effective room revenue optimization. Revenue Managers are generally comfortable with the theory and technology in rooms revenue management for their strategic planning and day-to-day decisions. However, when it comes to managing meetings, events and other ancillary revenue streams which for most hotels makes up 40-60% of their revenue, the science of revenue management is still at its infancy.
With the advent of big data and new analytical technologies the current data-driven approach to optimizing revenue performance is no longer sufficient. Thus we hear many hotels beginning to talk about the emerging approach of the future, Total Revenue Performance (TRP). TRP builds upon rooms revenue management to add automated revenue management capabilities to other vital hotel revenue streams.
Total Revenue Performance Approach Introduces New Complexities
Total Revenue Performance has always been the aspirational vision for hotels worldwide and it is becoming increasingly within reach for hotels, beginning with meetings and events revenue management. Whilst there are several areas of overlap between guest rooms and meetings and events revenue management, there are many areas which are different. Examples include:
- The mutual impact of the demand that exists for both guest rooms and function space on one another
- There are many revenue streams with different levels of profitability
- Function rooms accommodating different capacities in different set-up styles
- Demand and Wash expectations are difficult to predict
- Upgrades are not as desirable as they are in guest room bookings (nobody wants to have an intimate boardroom meeting in a ballroom)
- Multiple internal teams are involved in the management of this inventory
- Each of these items brings some key considerations for expanding your revenue management practice into function space revenue management.
Getting Started in Function Space Revenue Management
When getting started with function space revenue management, it is recommended that you take a holistic look at your team alignment, business processes, and technology requirements. Here is a quick list of questions to get your hotel thinking about function space revenue management:
- Are your cross-functional teams of sales, catering, and revenue management aligned and working effectively?
- What educational and training support is needed to ensure that your teams successfully manage your function space inventory in a scientific and methodological way?
- Do you prefer establishing sales and catering management processes into your revenue management team or expanding your revenue management practices into your salesn and catering team? How could you accomplish both of these?
- Do you have effective market segmentation for meetings and events and is it being used consistently?
- Are you regularly and reliably updating your systems as booking status changes?
Tools and Technology:
- What tools, technology, and systems will be required to support my teams?
- How will a new tool fit into the day-to-day operation and decision making?
Such questions are critical to answer for revenue managers, general managers, and sales and marketing teams to monitor all revenue information from a shared and centralized discipline. This perspective allows these teams to coalesce their efforts around a single, common goal: driving better revenue performance for the organization as a whole.
Interested in joining a free workshop on this topic? You can even bring your own data to work on during the workshop so that you can take home an action plan to start your meetings & events revenue journey!
- Kuala Lumpur, 14 Aug: http://go.ideas.com/revmeupkl18
- Brisbane, 16 Aug: http://go.ideas.com/revmeupbrisbane18
- Sydney, 21 Aug: http://go.ideas.com/revmeupsydney18
- Seoul, 23 Aug: http://go.ideas.com/revmeupseoul18
- Hong Kong, 28 Aug: http://go.ideas.com/revmeuphk18
- Bangkok, 29 Aug: http://go.ideas.com/revmeupbkk18
Seats are limited! Register today!