How do you adjust revenue management for volatile hospitality markets?

1 Assess the market situation

The first step is to understand the current and expected market conditions and how they affect your demand and revenue potential. You need to monitor the key indicators such as occupancy, average daily rate, revenue per available room, booking pace, cancellation rate, and market share. You also need to analyze the sources and segments of your demand, such as leisure, business, group, or transient travelers, and their booking behavior, preferences, and price sensitivity. Additionally, you need to keep an eye on your competitors and their pricing and marketing strategies, as well as the broader economic and social trends that impact the travel industry.

2 Adjust your pricing and inventory

The next step is to adjust your pricing and inventory levels according to the market situation and your revenue goals. You need to balance between maximizing your revenue and occupancy, while avoiding overbooking or underpricing. You can use dynamic pricing techniques, such as yield management or rate parity, to set your prices based on real-time demand and supply, and to align your prices across different channels and platforms. You can also use inventory management tools, such as length-of-stay restrictions or overbooking limits, to control your availability and optimize your revenue per available room.

3 Communicate your value proposition

The third step is to communicate your value proposition to your target customers and persuade them to book with you. You need to highlight your unique selling points, such as your location, amenities, service quality, or safety measures, and showcase your positive reviews and ratings. You also need to create attractive and flexible offers and packages that appeal to your customers' needs and motivations, such as discounts, loyalty rewards, free upgrades, or cancellation policies. Moreover, you need to use effective marketing channels and methods, such as email, social media, or online travel agencies, to reach your customers and drive traffic to your website.

4 Review your performance and adapt

The final step is to review your performance and adapt your revenue management strategy as the market changes. You need to measure and evaluate your key performance indicators, such as revenue, occupancy, average daily rate, revenue per available room, and market share, and compare them with your targets and benchmarks. You also need to collect and analyze customer feedback, such as surveys, reviews, or complaints, and identify areas of improvement or opportunities for innovation. Furthermore, you need to be flexible and responsive to the market dynamics and customer behavior, and adjust your pricing, inventory, and marketing accordingly.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?