What's your strategy when revenue management goes wrong?

This is one of the BEST questions I've seen here. Remember, guests don't care or know about revenue mgmt. (RM) like we do. OUR goal is to sell rooms at the highest price and lowest distribution cost. RM also includes getting our guest to do more "in hotel" or "on board" spend as possible and still have a great experience and want to come back. RM really cannot "go wrong;" I feel it's often when ownership and/or operations expect too MUCH from RM. Identify macro economic items happening around us, shifting market trends, and VALUE. Value is the bottom line in the eyes OF the guest. We often talk in our own "RM world" so to speak without really listening. When RM goes "wrong," it's usually us being over-expecting in our nature.

The question itself contradicts the essential concepts and structure of “revenue management” . - Revenue Management is not only maximizing the revenue, it is also minimizing the risk of revenue leakage & distribution costs - RM is also predicting threats for revenue loss. Threats can be controllable & non controllable. Based on type- strategies to be adjusted. If organization is bypassing the these 2 aspects- Revenue Management cycle ?? is not completed and thus you can not say you applied RM concept. It was long time before RM was about forecasting/budgeting, and assessing the performance in 3 KPI(%, adr, RevPar) ??Now things are different and KPIs are evolved and RM is more like Commercial Strategy rather than changing rate!

Identify the Problem - First, figure out what's going wrong. Is it low occupancy, poor pricing, or bad reviews? - Use data analytics to pinpoint the issue. Look at KPIs like RevPAR, ADR, and occupancy rates. Option 1: Dynamic Pricing - Adjust your pricing strategy. Use dynamic pricing based on demand, season, and events. - Use software tools to automate this. Update prices multiple times a day if needed. Option 2: Improve Online Presence - Work on your online reputation. Respond to reviews, both good and bad, to show you care. - Update your website and online listings with high-quality photos and accurate information. Review and Adjust - After implementing changes, review the data again. - Make adjustments as needed and keep monitoring.

In the domain of hospitality revenue management, when strategies falter, a systematic approach is imperative. Begin with a meticulous analysis of historical and current data to pinpoint issues and their root causes. Evaluate strategies, pricing competitivity, channels, upkeep rate parity across them. Optimize inventory, revenue management software and communicate to monitor the impact. Feedback from front-line staff with detailed documentation. Establish review processes and benchmark performance. Summarize actions and outcomes in a comprehensive report for senior management and stakeholders. This methodical approach recalibrates revenue management strategies, optimizing revenue and profitability in the dynamic hospitality industry.

Before being able to assess the situation you need to be on top of it. Your revenue management strategy needs to be setup in a way you can identify these situations early. This way you can avoid panic selling at large discounts. The only way in my view to be on top of this situation is to monitor the market daily. How quickly can you assess the performance of your property, the local competition and the overall market landscape? If the answer is more than a couple of hours, your strategy needs significant modification, including re-setting up any tools you use.

This question can be confusing as the problem has more to do with recency, as opposed to historical data. Data analysis has to focus on new/emerging/developing trends in a timespan of 1-2 weeks. As long as the travel market is considered to be recovering post COVID, historical revenue data tend to have less significance in my opinion. Not saying they are not important, just not significant in the context of temporary issues described in the first question.

Destinations are experiencing fluctuations in demand from different traveler segments. Maybe it is a better idea to target those instead of offering discounts. Making minor adjustments to the property and its amenities and facilities, so that it can be promoted to meet the demand from emerging traveler segments is the winning strategy. - Without lowering rates considerably. - Expanding brand positioning to larger audiences. - Perhaps adding new distribution channels that were not relevant before. This needs to be performed in coordination with other departments. Decreasing rates is the easy strategy for many, which undermines brand image and value proposition and does not necessarily have a positive revenue impact.