Revenue managementis a core element in working to build direct website bookings, setting out the right goals to achieve this, being committed to implementing the strategy and staying the course when doubt creeps in. Ultimately it is about optimizing the revenue potential of a given asset through all market conditions, the consequence of good revenue management is direct bookings.
According to a phocuswright white paper:
So although OTA channels are ever present there is not only the capacity to build direct bookings but also the demand for consumers to book direct.
So let’s delve into the reasons good revenue management helps build direct bookings.
A clear revenue management approach aims to remove departmental silos with the goal of increasing direct bookings and profit
It gives rise to the sales and reservation teams working together and being fully aware of each department’s goal, which is, of course, the same goal isn’t it…
Understanding what the data is really uncovering is crucial to implementing the correct decisions which are focused on the fundamentals of the overall goal – build direct bookings. Your team needs to be able to access and analyse that data at hand. Your P.M.S. and channel manager should provide management reporting applications/tools to automate the deep analysis of bookings per channel so that the end goal can be identified. Remember that the most relevant KPI’S to drive direct bookings are easier to identify when the unique property issues are identified.
Know and understand what bookings you are getting from each channel. Set out the criteria you want to analyse and compare the findings for each channel. The booking patterns analysis should include but is not limited to the following parameters per channel:
Data analysis of customers is necessary to identify your key customer segments. Different consumers from different market segments and booking channels will be willing to pay different prices. Analysis should include but is not limited to the following parameters:
Business intelligence will allow you to identify opportunities in the marketplace. It will also help identify problem dates far in advance so early action can be taken without reducing rates or having flash sales
Are you looking at the right KPI’s?
Once you know what issues you are facing you can then set the most relevant KPI’s you need to achieve your goal and build direct bookings. The actionable decisions being made and implemented are then based on the KPI results. It should always be based on the end goal instead of making reactionary decisions. You have to be clear about the end goal and then set relevant KPI’s to measure how effective the change in strategy is.
With the goal specifically to build direct booking you should be looking at these 4 categories:
The implementation of the revenue management strategy should be viewed as the most important of hotel operations. It can be a change in work practice and thought process. All team members have to buy into it, to be fully committed to it – from top to bottom and everyone in between.
Strategic elements which need to be considered when implementing your revenue management strategy include but are not limited to:
Don’t forget - KPI’s need to be reviewed on a regular basis to ensure the strategy is on track and growth is visible.
Hoteliers need to realise the potential of their revenue managers, of the true value they hold and how they control one of the core revenue sources for a hotel. They need to be afforded the resources to carry out their role to its fullest. Have you ever seen a chef go without essential equipment to make their job efficient? For a revenue manager to sell the idea that a channel manager system or business intelligence tools are necessary to improving the efficacy of the department can be much more difficult.
Remember it starts out with thorough data analysis on bookings, customers and the opportunities in the marketing place. Knowledge from data analysis enabling relevant KPI’s to be set and implementation of the plan based on the goals.
Hotels do need to work harder than ever to build their own bookings, work that done correctly is well worth it – financially!
To check out the rest of our Book Direct series, designed to optimise your hotel's direct bookings, go here.
Maeve Walls is the Key Account Manager & Revenue Specialist at Net Affinity.
Maeve has over 10 years of reservations and revenue management experience working with some of Irelands leading hotels and hotel groups. As an integral part of the Net Affinity team Maeve is responsible for managing, developing and, building relationships with our major key accounts to ensure continuous revenue growth, enhanced profitability and strategic online development. With broad experience including, revenue management, online marketing and distribution Maeve has been entrusted with initiating, developing and leading contemporary "best practice" revenue management techniques and intelligence for our clients within Net Affinity.