Revenue Optimization (43)

The most significant impact might not be operational, but psychological. Why? Because it's the hotel industry's fault. Let me explain:For years, hotels have trained guests to treat bookings as placeholders: reserve today, decide later.

In my view, the Full Prepayment Model is not the future of hospitality. While full prepayment has been practiced for decades for charter vacations, extended beach vacations and unique experiences like safari tours, it’s definitely not user friendly as far as plain hotel bookings are concerned.  Merchant bookings - fully prepaid bookings - at both Expedia and Booking  now represent over 70% of the total gross bookings. Improved cash flow, controlling the price the customer pays, opportunities to bundle hotel stays with air, transportation and experiences are some of the reasons for the OTA preferences of the merchant model.

The biggest impact of full prepayment is that booking a hotel becomes a much bigger commitment for guests.Hotels benefit from fewer cancellations, better cash flow, and more predictable occupancy.But guests may book less often or take longer to decide because they must pay upfront.Trusted brands like Marriott International and Booking.com may benefit most, while smaller hotels could struggle more with guest trust.BNPL services may become very important because they make upfront payment feel more flexible and less risky.

In many ways I look at this as an extension of Expedia. I suppose another clip on the ticket on the way through, which I can only imagine will make an Uber hotel booking more expensive.Is more distribution opportunities a good thing?

The big winner here is Expedia, adding another marquee player to its affiliate network. Uber will join other significant affiliates of Expedia, together with Chase Travel, Walmart Plus Travel and numerous airlines, tour operators, cruise lines, etc.

For hotels already locked into aggressive distribution deals with Expedia, this is a warning signal, as it reinforces intermediary power at precisely the moment the industry has spent years trying to rebuild the direct guest relationship.

The Cloudbeds data is striking, but let’s be honest — a 21.8% OTA cancellation rate isn’t just a distribution problem. It’s a relationship problem. OTA bookers aren’t disloyal by nature; they’re simply responding rationally to a system that hotels helped create.  When a guest can book a hotel through five channels and find five slightly different prices, they begin to treat their reservation like a placeholder, not a commitment.

What can hotels do to decrease their cancellation rates?  Maintain Rate Parity! If travelers find a lower rate for your hotel on the OTAs, they can cancel their direct booking and be tempted to book your hotel on the OTA or be lured away by a competitor with lower rate or better value.  Maintain Market Parity!

High cancellation rates – particularly for OTA bookings – are a growing challenge for hotels. They make planning harder, put pressure on rates, and often lead to last‑minute discounting that hurts overall performance.

This stage of AI evolution is not just predictable, it was inevitable as it addresses the very natural consumer expectation to be able to complete the transaction within the same app without having to click out. UCP in itself is not the biggest disruptor (AI search is).

Google's Universal Commerce Protocol (UCP) absolutely could pave the way for a meaningful shift in hotel distribution in the next 24-36 months. Its impact will depend heavily on both technological readiness and traveler adoption.

There's a significant gap between what's technically possible and what consumers will actually adopt, especially for high-involvement decisions like hotel bookings. For commodity purchases (cables, everyday items), delegating the entire process to an AI agent makes sense, but hotel bookings for holidays is a different story.

This is a pivotal shift. The issue is no longer which channels we use, but who controls the guest narrative and the data behind it. Hotels will not win by fighting OTAs on scale or ad spend. We win by aligning revenue, marketing, and sales around a single guest intelligence strategy using data to drive relevance, not just reach.

OpenAI, Google and Perplexity will reshape this landscape again. Nobody knows how exactly but 2 years from now the picture will be very different.

Stop playing the OTA game—change the game with the product. Yes, third parties are taking control of search, booking flows, and traveler data—but copying their playbook won't reclaim the guest relationship. If you try to "out-CRM" Expedia or "out-loyalty" Airbnb, you're choosing a scale game you can't win.

Hotels don't need another mega OTA, rather, they need partners who create real value. Airbnb's shift into hotels is less innovation and more defense. With Booking.com dominating STR volume and commissions rising, Airbnb is simply repositioning to stay competitive.

To be fair, one could argue Airbnb has already been functioning as an OTA for years. It facilitates transactions, controls the marketplace, shapes pricing behavior, and now they are onboarding more hotels and aligning its commission structure.

I believe we're at the point where it really doesn't matter anymore how many OTAs we have. It's gotten so bad for hotels that it almost can't get any worse — and it barely matters which one of them is draining our margins or taking over our guests.

Brilliantly articulated. This is exactly where the conversation needs to be moving forward. The era of chasing topline numbers is over, today's commercial leaders are being judged by flow-through intelligence, not occupancy percentages.

We've been having these conversations for about 20 years now. A lot has been said and published on this topic, including my own articles, podcast episodes, webinars, and even dedicated chapters in my last two books. The answer, at least to me, is obvious: until RMS providers build true profit optimization capabilities into their products (which requires proper data flow for the missing pieces of the equation), we're not going to move forward.

The ambitious vision for Total Profit Optimization is not a destination we are equipped to reach today. It's not a pipedream, but a strategic challenge demanding a phased, constructive approach. The core issue is a structural disconnect stemming from the historical focus on Rooms: The Talent Evolution: We currently possess excellent Rooms Optimizers, whose skill sets were sharpened by focused toolsets and market dynamics.

The shift toward experience-based booking is absolutely transforming the game. AI can finally solve the paradox of choice. Hotels can now showcase everything they offer but in a way that's targeted and relevant. Don't sell me a romantic getaway when I'm traveling alone.

There is a massive industry gap here. Full stop. Discussion about this capability in the industry is topical. Those in a position to enable it are few, if even thinking about it. Packages are a clumsy solution to the underlying problem of being able to successfully deliver rooms digitally.

If the game has shifted...so must our KPIs. Today's revenue leaders must zoom out and focus on TRevPAR, capturing not just what happens in the room, but around it. Whether you're luxury or budget, you can take advantage of experiential revenue, something that thanks to digitalization, every hotel can play (and not only ultra-luxury resorts).

If the real question is about skills, mindset, and capabilities, then here's my take: Skills: a Revenue Manager today must think strategically, not just tactically. Revenue management is about defining where the business should go in terms of product and revenue in the next 3–5 years.

A broader skill set — especially in marketing — is becoming increasingly beneficial. Since specialized tasks can now be handled perfectly by AI, commercial roles are moving closer together. This shift makes broad, cross-functional skills more important than ever.

The Revenue Manager we need today looks very different from the one many hotels still have in place. The role can no longer be defined by Excel spreadsheets and static reports. The markets move too fast, the data is too complex, and the opportunities are too big to leave in the hands of manual processes.

"Velocity analytics" and "Anomaly detection" sound like cutting-edge tech, but these are just fancy names for basic common sense: watching your booking pace and noticing when something's off. The bigger issue is our industry's obsession with historical forecasting.

This is one of the greatest opportunities the hotel industry has ever faced. Forecasting should no longer be treated as a static spreadsheet, it's more like a live stock market dashboard, where dozens of variables are in motion and projections shift by the hour.

As a seasoned Revenue and Profit Optimization professional I would like to reitarate (which I have already expressed in my book Hospitality 2.0 and other publications): travel demand has always been uncertain, and history never repeats itself.

Since when it's a good thing for the government to determine commissions in the private sector? Commissions are charged in many industries: from insurance to sales to real estate. Why doesn't the government regulate them all? And why decrease the commissions by 25% and not by 19.5% or 26.8%?

I firmly agree that, in many cases, the fees are excessive and that OTA's have exploited the industry's vulnerabilities—particularly targeting independent hotels and softer brands. That said, I do not believe government intervention in commission structures is the answer.

It certainly sounds appealing at first. Let's protect the poor hotels from high commissions but if we've learned anything from economics it's that government price controls tend to create more problems than they solve. Take the example of rent controls.

I was shocked by the claim that there were hoteliers linking their property websites' "Book Now" buttons directly to the OTAs. In hospitality we had a few cases like these back in the year 2000. But now, 25 years later? First, direct bookings are cheaper than OTA bookings.

OTAs are not a strategy - they're a costly crutch. The idea of abandoning direct online distribution in favor of exclusive reliance on OTAs is not only shortsighted — it's dangerous. OTAs are useful tools in a diversified distribution strategy when demand is not strong, but surrendering full control to them is a fast track to eroded margins and loss of brand equity.

Handing your business over to a lottery outcome. Sounds like a great idea! One should not outsource something mission critical to the business. If selling product isn't mission critical, then I suppose knock yourself out! There is no doubt that competing is a tough business.

This is not the first attempt for an ill-conceived differentiated pricing by the OTAs. 15 years ago Orbitz was caught jacking up prices for Apple computer and laptop users under the presumption that Apple users were more affluent than PC users.

This research is indeed intriguing. As a product manager for Lighthouse's parity management solution, I've seen firsthand how hotels use extranet promotions to offer location-specific and platform-specific discounts. However, this study reveals a fundamentally different scenario.

Why not? There are many across industry examples where location and socio-demographics impact pricing for products and services. A few brief examples - Fuel - Drive around your own town and you will find vast differences. Not to mention long weekends.

In my view, last-minute discounting is a super lazy and rookie approach to revenue management and a sure downward spiral to hotel insolvency. One question: why airlines and car rental companies never engage in last-minute discounting?

No actions that drive business to OTAs away from direct channels are good for hotels. It's a simple concept. OTAs have been very creative in finding ways to train the consumer to choose their booking channels over hotels' own websites and this is just another attempt to do the same.

Last-minute discounting is a double-edged sword for hoteliers. It can help fill unsold inventory, but it also carries significant risks that can undermine a hotel's broader revenue strategy and brand perception. From a revenue perspective, unsold rooms are a perishable asset, and this type of policy can be useful to sell those rooms.

I believe rate parity is essential for transparency and trust with our guests. It ensures consistent rates across all third-party channels, avoiding confusion and maintaining our brand's reputation. While we have the flexibility to offer special rates on our own website (a channel we fully own), rate parity helps us manage distribution more effectively with OTAs and other third parties we don't fully control (which we don't own).

I believe that hotels should have the freedom to set different rates across their distribution channels, including OTAs, without being bound by rate parity agreements. Firstly, allowing hotels to set their own rates enables them to respond more dynamically to market conditions and tailor pricing strategies to different customer segments.

Rate parity is non-sense and the RTI ( Retun time invested.) is always negative. here is why: 1. Hotels cannot answer how much additional business they got because of disparity - so easy to throw rocks as to how much money "might have been lost" vs 2.

I don't think this is a good move from Booking.com as indeed advance purchase rates (with no refunds or cancellations) have been a useful tool to attract budget-conscious guests and ensure steady cash flow for hotels. Nowadays, guests are even more price sensitive so by removing completely prepaid rates at a discount, we (they) may lose some customers directly.

In some ways it appers much like the old model of travel agent relationships and vouchers, where the hotel received the funds from the agent after the guest had stayed and submitted their voucher for payment through the accounts receivable process.

Hotel advanced booking/pre-paid rates are typically 10%-20% below BAR (Best Available Rate). These rates have always been an important strategy to put as much business on the books and to decrease cancellation rates plaguing the industry for years, reaching as high as 50% in some destinations.

I believe this is a positive step towards fair competition and gives hotels the freedom to create better pricing strategies overall. Savvy hoteliers will definitely drive stronger performance thanks to this, for the others this won't change much :) Now, let's not always blame the OTA for everything, if we really look at the NetRevPAR per channel, most hotels will be surprised to see that the NetRevPAR of the OTA is sometimes the highest one!

Great subject to discuss. The industry for too long has been a slave to parity agreements, and now the EC has created some breathing room for hoteliers to develop their own strategies as it relates to OTA's. It was almost like the tail was wagging the dog from a digital strategy and pricing perspective.

Good. High time. Most customers are price driven and want to get the best quality product at the best price. Where else should that be found, but with the producer directly? Put simply, there is no environment where it should be acceptable that the producer and provider of a product is forced to offer the same price to a third party that does not produce the product, and expects to profit from the same.

It depends. Smaller less complex hotels will be the first ones where there is no need for a revenue manager. Pricing and Inventory Management can be indeed fully automated. The role of a revenue manager already has evolved / needs to evolve to focus more on-demand generation.

Currently, doing research on the topic and most of the experts I talked to indeed think that the position of Revenue Manager will disappear in the next 5 years (replaced by AI tools and/or integrated with other hotel functions such as Commercial).

First thing I've done - of course- is ask Chat GPT. AI itself "believes" that it will not fully replace humans as It can not match human insight and intuition or adaptability to crisis scenarios, neither has interpersonal and leadership skills.

Wellness in hotels has become important due to a growing consumer demand for holistic experiences that prioritize health and well-being. This department can in some cases generate revenue for hotels similarly to F&B, however, the extent of this contribution is contingent upon factors such as the size and features of the wellness center and F&B and the type of destination.

The wellness travel boom is really shaking things up in the hotel business. It's not just a big deal; it's a whole new direction for the industry. Here at Catala Consulting, we've noticed that the integration of wellness into hotels isn't just a response to a passing trend.

Can wellness generate revenue the same way as F&B services in hotels? - Yes. Hospitality is a lifestyle industry- from its location, to its architectural design, to the services offered. In the United States, wellness is about a USD$450B industry (70% in product and 30% in service) and growing.

Do OTAs generate demand in hospitality. The short answer is no, but they can in limited conditions. In the business/group related traveler the answer is a harder no. Generally since the budgets and logisitics are more controlled.

Yes - in a way ...and No. Yes - in a way: OTA's, Social Media posts, destination marketing organizations, newsletters, and emails containing special offers, etc., all stimulate interest in leisure travel. OTA's are helpful during the planning phase since users can quickly compare prices and availability between various options being considered.

It is hard to argue with billions of dollars spent annually on marketing by the largest OTAs. One could certainly make the case that such a robust amount of travel-related content would spark travel wanderlust from even the most "home-rooted" consumer.

Obviously a blessing. In hospitality, we are with one foot in legacy and one foot into the future. We need more exponential technology development to liberate team members from mundane, repetitive, and 0 value add tasks. We should have been further away already.

Its a double edged sword. Community driven can lead to building everything for noone. My viewpoint, and having my own technology company, is that you need to solve an issue at hand. Sort the issue and then you can gather user feedback to make it more efficient - ie less clicks to get to the result, different colors, visualisations, etc.

Technology, such as attribute based selling (upselling) has been talked about for many years, software companies have tried and optimized it for real release for a considerable amount of time, minimizing the user "optimization" afterwards.

Making Attribute-based Selling (ABS) and upselling a reality! Is mine and ROOMDEX's 2023 resolution! Attribute-based Selling (ABS) re-imagines hotel inventory merchandising in order to improve guest satisfaction and generate greater hotel revenue.

Challenging to predict given the current VUCA environment, but since "we've come to play" typing here, I would say 2023 will show a more thoughtful European customer, looking more into the rates and offers, and not as splendid as they were in 2022, when they blew the savings of two years of no travelling.

I believe that if we don't figure out how to utilize ChatGPT AI in our workflows for revenue and profit optimization in 2023 - we will have wasted a year.

I am of the opinion that guests (and groups) should be able to book the hotel on their preferred channel. As it is mentioned in the intro, apparently OTAs already enable group bookings in some way, of course one can blame the OTA for this, but the fact that it is happening clearly shows there is demand from guests and groups to book via an OTA, most likely because it is easier.

This does not surprise me to see this trend. It could be an indication of one of two things. One, they percieve that the best deal to be had is through the OTA site. Secondly, the convenience factor of booking and managing without having to speak to anyone and deal with deposits, cut-offs, etc.

The answer is simple: only if it generates incremental revenues. What's not simple is differentiating between incremental and displaced. The Revenue Management discipline in our industry hasn't yet evolved to the point that would allow to find reliable ways to calculate those.

How do you avoid the fine line between data-driven decision making and analysis paralysis? Don't ask humans to make that decision. Rely on ML algorithms that have developed to the point that allows us to answer this question intelligently and objectively.

The purpose of gathering and analyzing information is to produce a strategic course of action which changes or improves our desired outcome. Our goal is to reduce the time between data gathering and formulating and implementing actionable outcomes, or what I refer to as analytics efficiency.

There is no fine line. There is just misconception. We have been drilled as an industry to see data analytics as this art that we are too "dumb" to understand as a user. Therefore the industry was driven by BI and Revenue vendors with even bigger dashboards, even more details "because without it you cannot live".

A positive Guest experience is driving and maximizing revenue. Without it you are punching above your weight and possibly get knocked out faster than you can imagine. We will only know if our price is right once the customer sits back at home reflecting on the experience they had.

Today's typical online travel consumer - your past, current and future hotel guest - is exposed to more than 250,000 digital micro-moments a year: from social media interactions to messaging and quick read of the headlines on their smartphones (Google Research).

The evolution of Revenue Strategy as science more than art has certainly created further division between the needs of our owners and the needs of our customers. However, at the heart of each hotel strategy is the Long Term Value (LTV) of a customer which we now need to protect and defend at all costs.

Traditionally, RevPAR was the gold standard metric to apply to revenue KPIs. It was and still is used as the measure of financial market strength. While RevPAR is a good depiction of profitability when the market is in a "typical" state, it can obscure a hotel's performance when it veers away from the norm – a condition the industry hasn't seen since early 2020.

I am happy to see this topic gaining momentum. Profit optimization in today's environment is key to your entity's success. Revenue optimization will continue to evolve and grow in sophistication as the practice matures, as the distribution landscape changes around it, and as new technologies emerge to support and disrupt hotels' strategies.

Back in 2014, I published an article "Things you didn't know about RevPAR (or: ARPAR as a better performance indicator" where I described the new index for profit tracking and profit maximization I had developed: Adjusted RevPAR (ARPAR), which also made its way to wikipedia and has been adopted by hospitality companies across the globe.

First things first: THERE IS NO NEW NORMAL! The new normal was a mix of government imposed social distancing restrictions that lead to increased costs coupled with mass layoffs and reduced available inventory = Pay it, suck it up or leave it.

Focus to increase NOI, I think is an import topic and item to think about when hotels are working to further optimize revenue. So finding revenue with a high margin is key. A first process to implement, ideally fully automated would be upselling of room upgrades, and monazite early arrival and late departure.

Historical data has become completely obsolete because of the pandemic and the current inflation. If your King Room went for $200 on September 20th of 2019 at 75% occupancy, how much should you charge in 2022 at 60% occupancy, citywides down by 70%; corporate groups down by 40%; corporate transients down 35% and Inflation at 8.5%?

During pandemic we have seen an increase in package and leisure sales, especially for the non-central hotels. With travelers willing to spend more money on theirselves many hotels have seen an increase in incremental revenue. We see an increase in requests for Total Revenue Management projects now that restrictions are lifted and demand is returning.

More than asking if hotels should diversify their revenue streams now, they should be asked what has stopped them doing so earlier!, or in other words, why do hotels only do revenue management in the space where there is a bed?

Many hotels have been diversifying their income streams for ages. Though, the entire industry has still been measuring its performance through RevPAR as being a de facto metric since the Revenue Management discipline was born.

First and foremost we need to make sure that we are showcasing commercials in hotels as a career path that is worth pursuing as we have seen industry drainage of talent due to working conditions as well as pay-scale. As a career path you can come up to the top of commercials across all three and where you spent your majority of time will determine which part of the hotels lifecycle your skills will be useful.

It's RM, no doubt. As this is the only discipline that truly knows what's going on, as the only data-oriented department in hotel operations.We already have very many examples in the industry of former revenue managers advancing into C-level roles and becoming successful strategic leaders thanks to their analytical skills, deep understanding of data, and ability to see how different actions by different departments affect the bottom-line profit and operating efficiencies of the entire organization.Our new digitized reality dictates that data is our new currency.

One fairly simple focus will be to implement a digital up-sell strategy. Exact figures are hard to find but it seems that 85% of the hotels globally do not have a digital up-sell strategy. Some don't even up-sell at all. This is basically leaving money on the table.

Having clients all over the world, I can say I have direct experience with the issue. And it's no fun. As a consultant, it's frustrating to go on a call and celebrate the hotel's best year ever, hang up and speak to another client running at 1/10 of 2019 occupation rate...

Let's remind everyone what the primary goal of revenue management (RM) is: to ensure that the property sells the right product to the right customer at the right time for the right price on the right channel. In the past revenue management systems (RMS) and revenue managers used historical, comp set pricing and market data and combined this with forward-looking demand signals like pacing to recommend the optimum rates.

To me, it's not a question of whether technology (and AI/ML in particular) is good or not for the Revenue Management discipline. The question is: why are we, as an industry, so far behind other sectors when it comes to the adoption of automated tools and especially Machine Learning in our decision making process?

Over the last 10 years, there have been great advancements on hotel revenue management systems, especially in the areas of price optimization as well as inventory controls. With most major brands and independent hotels on high performing markets adopting customized systems, these applications have proven to be essential for the revenue management in today's world.

Hardship sparks creativity. Hotels all around the globe were forced to fundamentally rethink revenue generation during the Covid crisis. Like so often, many successful concepts started with putting the guest at the centre and looking at what (s)he really wants right now, not what it is that we traditionally like to sell (a room night with breakfast).

In the post-pandemic world, I see three significant revenue generation initiatives for the utilization of the hotel spaces: 1. Create co-working spaces: Similar to Roger Smith Hotel's KettleSpace Flexible Workspaces, create work-from-hotel spaces for out-of-towners, digital nomads and local entrepreneurs who do not want to be tied down by office leases.

Every square metre can potentially generate extra revenue for a hotel, but many properties keep only strategizing the bedrooms' revenue.Ideas? Here are a few:Pre-arrival:Upsell rooms and added value packages and items via app and mailing, with tools such as Oaky or UpsellGuruReview your room inventory.

If there is one thing we know, it is most likely that we know nothing at all anymore. We do not know which border will open or close tomorrow due to a newly spotted variant. We do not know who will be our guest two weeks, three weeks, let alone a month from now, and we do not know who we will be competing with for those guests.

The traditional competitive set selection process in the US has always been driven by financial models, which are developed to satisfy financing and banking requirements. As such, they are usually based on aspirational comp sets in order to show future growth opportunity and return on investment.

Today, every hotel in the world has not one, but three categories of direct competitors. Official Comp Set This is your traditional comp set, included in the property's dSTAR Report by STR or rate shopping report by Fornova. These reports provide real value by benchmarking how well your property is performing against the “official” competition.

Start Treating Direct Online Distribution Costs as… Distribution Costs! Currently direct online bookings and their distribution costs: ongoing website hosting and technology upgrades, website content optimization, SEO, website visitors referrals fees (metasearch and paid search CPCs, online media and retargeting referrals, etc.), hosting, analytics, data marketing, email marketing, social media marketing, digital marketing agency fees, etc.

While cost optimization (or rather, profit measurement in general) is crucial for hotel operators, just like for any other business, our current reality is that hoteliers are offered a very minimal amount of technical functionality that would make profit maximization a user-friendly task.

Finding a calculation that fits every hotel is impossible – different taxation, rules of cost allocation, franchise vs managed vs owned % fees, P&L fee structures, etc. We also need to be realistic. RM has never had the notion of cost optimization – it's just been talked about for the last 1000 years, as much as we talk about TRevPAR.

In Q1, 2021 labor costs consumed 60%-87% of RevPAR globally (CBRE, HotelEffectiveness), making hotel operations completely unsustainable. Labor costs are increasing up to 5x faster than RevPAR (HotelEffectiveness). The travel rebound in Q2, 2021 has added another headache for the industry - acute labor shortage.

My view is strongly that hospitality needs real people or it can't be hospitality. The humans need to be there to make the guest feel welcomed and taken care of. A little friendly contact goes a long way to improve guest satisfaction.

I think one of the first things hotels need to do, especially those that are on older "closed systems" is to convert their core technology stack to the cloud. Why? Simple, once they do, they have a whole set of new services they can subscribe to that can help with automation, make things more efficient.

Oh boy! Are we tired of the game of whack-a-mole yet? Maintaining rate parity is a major effort and somehow OTA "partners" find a way to skirt the rule by offering member-only rates (with very few qualifications), bundling with air, or grabbing a wholesale rate and unbundling it.

Rate Parity is not a new pricing strategy nor is it a hospitality industry-specific invention. It has been used in retail for many decades: fashion clothing, perfumes, appliances, golf equipment, smartphones, automobiles, etc.

Rate Integrity should be the focus, not rate parity. With so many different distribution channels, programmes and closed user groups, making sure the correct rate is getting to the right audience is very challenging. Importantly, at the core of any pricing architecture, a clear understanding of how rates relate to each other, should drive client/customer value taking into account contractual obligations, holistic customer value as well as the contribution to profit of each rate/channel of distribution.

There are significant revenue opportunities outside of room revenue:1. Make your property the “hero of the destination:”Bundling rooms with local places of interest and activities into attractive hotel packages offers significant revenue opportunities.

Revenue managers need to focus on revenue generation. Upselling, cross-selling, total revenue management, new revenue streams should be part of the business strategy. Customization and personalization have to be at the core of revenue generation strategies.

By viewing the entire building/space as a series of opportunities to drive revenue will not only drive top line revenue but also increase asset value. The obvious focus would be to concentrate on staying customers to increase revenue opportunity through F&B, MICE or other retail streams, however looking at local footfall and local residents could also unlock opportunity.

First thing hoteliers should do is invest and implement technology NOW! With today's SaaS monthly fees and free trials, even in this time with little cash on hand, implementing new technology is possible and affordable. Focus on automation.

While there are reasons for optimism for sure, now is not the time to let up. Hard work will be required to stay ahead of the curve (or, let's be honest, with continued uncertainty, just on the curve would be great!). Guest behaviour, travel purpose and travel preferences will not be stable.

Due to the pandemic, in 2020 hoteliers slashed their IT and marketing spending by over 50% compared to 2019 (STR, 2021). Due to budget constraints, this year the big question is what can hoteliers do in this environment of weak but growing travel demand and limited resources?

Let's remind everyone what the primary goal of revenue management (RM) is: to ensure that the property sells the right product to the right customer at the right time for the right price on the right channel. Typically revenue management systems (RMS) and revenue managers use historical, comp set pricing and market data and combine this with forward-looking demand signals like pacing to recommend the optimum rates.

The current pandemic will certainly have a long term shift in how we satisfy future demand. While there has been a lot of discussion around how it will evolve, it is still too early to figure out how things will materially change, and as such, technology has not caught up to it.

For individuals new to the concepts of revenue optimization, the first step would be to understand the breadth and depth of what is involved. Hint, it goes far beyond pricing. Work alongside an expert until you are ready to fly solo.

In the pre-COVID-19 era, some revenue managers were indeed stuck in the rut. Who were they? Revenue managers who acted as mere “OTA Relationship Managers.” Or as comp-set pricing strategy plagiarists. Who used an Excel spreadsheet as their only technology tool.

The industry needs to face some important challenges, the first one incorporates more technology in our ecosystem, hotels and chains need to have more information on the daily basic decision, but they need to be more disrupted in this area, for example, smart destination software must come to our technology ecosystem.

Thank you for the viewpoint, Scott. First of all, I'd like to express my opinion that the discipline of Revenue Management will never lose its relevance, no matter what happens in the industry and in the world. A business simply can't be successful without some type of RM tactics in place.

Here are the three main action steps in revenue management in the post-crisis period: 1. Break down the silos! The post-crisis requires a completely new approach to revenue management (RM), not going back to the old ways of doing RM.

While none of us have any idea when the virus outbreak will be contained and when currently closed hotels will be allowed to open again, we can and should get ready for the day which will eventually come. At the same time, we can't plan too early without proper data and information.Action A: Resist the temptation to hand over your inventory, promotions and rate strategy to the OTAs.

It's true that the hotel industry has been through many storms. However, it has never seen a black swan event like this one. As the leading brands expect revenues to decline by an unprecedented 70% or more, millions of people are out of work and we are still 3-6 weeks away from the peak of the crisis.

It is very important for hotels to maintain a detailed forecast for both the short term (more frequent) and longer-term (outside 3 months). If your property has an automated system that provides demand information, it will likely only be reliable for the short term.

Without a forecast it is difficult to understand all of the revenue opportunities for a hotel and how to weave them into a single, successful revenue strategy. Creation of this strategy has two components. The continual, repetitive forecast update process that is needed to adjust tactics to make the strategy come true is clearly better accomplished by automation.

In my opinion, day by day forecasting is even more important now than ever. At Crescent Hotels and Resorts, we believe this is an integral part of our strategy, as it conveys to our stakeholders our strategic intent by day by market segment.

Hoteliers who are unwilling to invest in the latest revenue management technologies are the ones “stuck in the rut.” Less than 5% of independent hoteliers have a revenue management system (RMS) in place, many branded hoteliers are stuck with their hotel chain's less than adequate RMS technology.

Is revenue management not keeping pace with today's world? How condescending to assume that a lack of reinvention every decade is a sign of incapacity. Think back to the promise that revenue management systems made: a property could see its revenue increase by a minimum of five percent by opting into an electronic revenue management system.

While having a revenue management system was a competitive advantage in the past, it's now commonplace. We are close to what the airlines are struggling with for years, they all use the same algorithms and they all end up with the same pricing.