Revenue Management Looking Forward with Confidence Using Datavision’s Business Intelligence System

Revenue Management is defined by Wikipedia as “the application of disciplined analytics that predict consumer behavior at the micro-market level and optimize product availability and price to maximize revenue growth. The primary aim of Revenue Management is selling the right product to the right customer at the right time for the right price. The essence of this discipline is in understanding customers' perception of product value and accurately aligning product prices, placement and availability with each customer segment.” Looking back at the position of Revenue Management, we can see that it is no longer one person that is hidden away somewhere in a back office, never to be seen in the light of day but the position continues to evolve and grow. Revenue Management which includes yield management and optimization has become one of the most valuable positions in any hotel or resort.  

An accurate Rooms Revenue Management forecast is a critical area for hospitality. Most properties begin with the rooms forecast numbers for all other departments to follow using the rooms' booking trends. Accurate past, present and future data is a must when it comes to forecasting. With Datavision you can see day by day historical occupancy numbers, pricing (ADR), Comp Sets, Reviews, weather, customer comments and market segments (which are vital to revenue management). What is currently on the books and booking pace reports will allow you to see the trends for the future. Do you have a special report that you currently use, that can be created, automated and delivered to you at the time you chose.

Revenue management is also being used more today for areas other than rooms. We see now that F&B, Golf, Spa, Skiing, Ticketing, Tennis, Boat slips, and all areas of revenue within a property are now forecasting and looking day by day at each individual operation. You can  see areas and times your outlets are underutilized or oversold and discuss at the Revenue Management meeting with the TEAM. Let me emphasize that word again TEAM! Revenue Management is a team effort and every area that produces revenue needs to be involved to discuss what improvements can be made to increase their departmental revenue. If all Team members are present, including marketing, some decisions can be made right them on what promotions are needed or depending on time constraints, if a separate meeting is needed. Marketing can also now see all the booking channels and focus on the profitability of each one.

Datavision pulls the payroll data with drill down capabilities to see actual hours.  The daily extraction of Hours and Wages by pay code, department and position detail accounts for punch edits to keep your data as accurate as possible. Once this data is part of the warehouse, labor data is correlated with operational information such as rooms, revenues and covers to build detailed labor metrics reports. You can quickly identify potential problem areas concerning your productivity such as departments/positions running at an unexpectedly high cost per occupied room or cost % revenue. You can build your own metrics such as labor hours per service for the spa or revenue as a percent of labor dollars for the bar. You can also build payroll projections given a department or property’s productivity metrics to help predict the final month end payroll costs.  Watching the projected month end vs budget month end vs forecast month end will allow the department heads to proactively manage their bottom line.

 Since revenue management reports start begin with rooms, it is vital that all your booking agents know the property and have been properly trained. Learning about the difference in the rooms, locations and views is a must. If you have a pool shaped like a Mickey Mouse hat with two ears, make sure they know it. If the first floor does not have a beach view, or if it is next to the pool, then they will better understand the pricing of the different room types. The booking agents can’t sell what they don’t know and if they think the price is too high, look for discounts unless your PMS doesn't allow it. Train and then inspect what you expect. Remember revenue management starts with inventory control and selling rooms.

In the past all of these day by day budgets and forecasts were done in Excel spreadsheets with many reports to put together and create a Revenue Management reporting tool. This is not only time consuming, but leaves a large margin for errors. For all areas of this property to work together in revenue management it begins with data collection so that we all have the same accurate, actionable data. Datavision is  an automated Business Intelligence System that does all of this for you and then delivers to specified people at a set time. Ready when you need it, allowing you to make better business decisions faster.

In revenue management we have learned that rooms, tee times, spa appointments, ski lifts and empty restaurant seats are all perishable and once today is gone, there is no recovery for their yesterday and that revenue that could have been made is gone. Revenue management with inventory control and day by day forecasting will help you accomplish your budgets and goals. It’s a new year, and it is time to step forward, collect your data and look forward with confidence that you will accomplish your revenue management goals.