The concept of revenue management involves using analytics to predict consumer behaviour and sell the right product/service at the right price at the right time via the right channel to maximize revenue growth. Similar to the concept of the 7Ps of Marketing Mix, there are 4 key elements of revenue management that hotels should adhere to. The 4Ps of revenue management are: Pricing, Positioning, Pace and Performance. We will cover each element individually as part of a 4-part blog series.
Pricing is the mother of all other Ps (performance, pace and positioning) of Revenue and Asset Management. Pricing is not only the deciding factor for Performance and Profitability but also for determining the value of an asset. Accurately pricing a hotel room based on demand can help the hotel to bridge gaps in its revenue plan
Hotels should look at increasing rates for high demand days to maximise revenue generation and decreasing rate on low demand days to maximise occupancy. An on-going practice of balanced volume may help the hotel to not only increase occupancy but also help to increase yield holistically.
Key factors to consider in your hotel pricing strategy:-
In our next blog post, we will focus on Positioning and its relevance to the Revenue and Asset Management process of a hotel.