Outsourcing Revenue Management Services - Why you should do in 2021?
Revenue Management Services – A different take!
In simple parlance, revenue management is an economic discipline, management, and analysis to maximize the revenue growth of hotels.
Revenue management services is a specialist’s job. From simple data analytics to making sense of complex trends, understanding market segmentation, the prices, and rates of hotels, to combined statistical analysis resulting in an upsurge in the revenue. Data analysis is at the heart of Revenue Management Services.
The full gamut of these services comprises managing prices and rates, managing availability, average daily rate, best available rate, the average length of stay, and market share.
Revenue management in hotels
Hotels do not always sell their rooms at the same pace. There are high tides and low tides depending on various factors like business environment, seasons, festivals, market, sale teams, etc.
The price of a room fluctuates with demand and supply. Understanding the market scenario and making decisions to increase rates and availability is very important to gain market share and keep pace with the competitors.
Hotel Revenue Management Service is all about selling at the right time at the right price to the right customer.
While many hoteliers hire their own in-house revenue manager to look after Revenue Management Services but it does prove to be a lot on a singular executive.
Manually analyzing data also leads to singular decision making which in the long run becomes person-centric rather than building an organization’s intelligence.
Outsourcing lessens the burden of inspecting, implementing, gauging, and taking corrective action through collaboration. More so with a team of experts who are collectively looking at the market and making data-driven decisions.
Why is outsourcing Revenue management services Important?
Hotel Room Night is a perishable commodity. A night not used or paid for is gone forever.
Outsourcing helps a company’s business process through third parties or outdoor agencies, leveraging profits ranging from low-cost labor, better quality to product and service innovation.
With the help of revenue management services, a hotel is able to optimize revenues and focus on operating a better hotel. The first step in a revenue management service is to examine the various segments of the market for your service. Then design the different ways in which you can charge different prices to the different market segments.
The motive stands to expand the market and increase the revenue potential by charging higher prices to those market segments which are not responsive to changes in price level and lower prices to those market segments which will respond to a price reduction.
With the use of historical data, market triggers and demand signals, revenue management services give insights and recommendations for each room type and segment at the property. This balance is achieved to maximize room productivity and yield per available room.
Also read: 4 Ps of Hotel Revenue Management – Pricing
Why should you hire one?
Outsourcing a revenue management service will outperform your competition and set you up for success. Below are few points to illustrate why you should be outsourcing revenue management services:
Revenue manager scarcity and Budget constraints
Finding a qualified revenue manager isn’t simple and unquestionably doesn’t come modest. The shortage of income administrators is a main problem in the business. What’s more, the issues don’t stop there. Even once a revenue manager has joined, there is no assurance on quality, training, and how it will require this person to leave for other opportunities. Outsourcing will relieve you from all this haphazard work.
Unmatched Financial Performance
Outsourcing a revenue management service will help to quantify the financial benefit, especially considering the many factors that come into play when it comes to successful Hotel Revenue Management. However, nearly all hotels can undoubtedly profit from the right company leading its revenue management operations and strategy.
Revenue Management is impacted by a wide range of components, making it a particularly perplexing forte. Most hotels are missing out on major opportunity for revenue generation for more than one of the accompanying perspectives:
- Rate openings (for example lodging type, season, lead time, division, sort of rooms, day of week designs, survey score)
- Ancillary income (F&B, MICE, Spa, and so on)
- Market and financial variances
- PMS/POS/CRS openings
- Organizational challenges and primary change
- Outsourcing will help to deal with all these factors.
Your market share against the competition
Being in a very competitive market, it is very important to run with your competitors. You need to sell more than them, see more than them, and be ahead of them in all aspects. Outsourcing Revenue Management Services helps to keep abreast of the market and also how to move ahead of them.
Also read: 4 P’s Of Hotel Revenue Management – Pace
Why should you do more in 2021?
At the point when the Coronavirus pandemic hit, the attention all became on fundamental laborers. When taking a look at hotels, the focus was given to the essential employees so that the hotels stay beneficial and continue to get heads into beds. This has gotten considerably more articulated in the COVID-time.
Each penny means a lot for the hotels, as they fight lower inhabitants and falling rates. A solid and reasonable revenue strategy is important for keeping hotels pushing ahead, bringing in visitors even in the least of interest periods.
Considering all these, it is time that hotels should take up the idea of hiring revenue management services. Let us consider few points why:
Making more with a limited budget
Covid has hit the revenue generation for different service industries, hotels being one of them. The pandemic has forced to cut down on employees and relieve them from their duties whereas running themselves on a shoe-string staff.
Many hotels had to let go of their revenue management departments as well. But as the business has to go on while keeping the precautions for Covid-19, having a non-revenue manager handle the hotel revenue can slow and smother a hotel’s chance at a rapid recovery.
This is when you can outsource works. Rather than paying a full-time salary, you can now manage on a fixed amount to look after it. Moreover, the outsource team being expertise in the field will be able to provide you with better solutions to run the business in a time of crisis.
Knowing more than the property
Outside Revenue services commonly have a huge effort into numerous business sectors, and contacts in numerous information organizations importance notwithstanding the income the executive’s administrations, they additionally give you industry patterns, activities, and developments that you may already have not had the option to get to.
By outsourcing revenue management, you can get eyes on your property, however the more extensive miniature and large-scale markets and public patterns. This is an important expansion to their administrations that ordinarily shouldn’t cost you whatever else.
Hiring a team instead of one
Having a revenue manager is extraordinary for certain properties, yet when you just have one individual from your income group, it very well may be a ton for one individual. Revenue managers on the location are continually being maneuvered into different gatherings, different bearings, helping with the front work area, various undertakings which take their brain and consideration off the thing they’re being paid to do, to make the cash.
Outsourcing doesn’t have this issue. They are allowed to zero in exclusively on the income for your lodging and furnish you with the best rate of profitability.
For sure, their groups are not only one individual, you’re getting an income director and experts, an entire income group for the expense of one full-time on-property revenue manager.
More Commissions with Third Parties
At the point when you handle solely your revenue management, it might be precarious to arrange appealing arrangements with OTAs, tech suppliers, or any accomplice you wish to work with.
You can wind up managing junior record administrators with no genuine state or capacity to offer appealing deals. By outsourcing revenue management services, you are without a doubt working with an organization that has a huge arrangement of lodgings and consequently solid contacts with a few tech suppliers and OTAs.
Now maybe the perfect time for your hotel to outsource your revenue management. The positives are numerous, and it’s a great move to help safeguard the future of your property and put you on track to succeed and capitalize on the market recovery.
Revenue management is developing and is not just about rate yielding. It now requires a tactic that processes a complete 360° strategy that emphasizes strong distribution channel optimization. Revnomix Solutions offers the best revenue management service solution assisting you with experts situated in numerous markets.
Revnomix Hotel Data Analytics provides simplified solutions to hotels to process data, make informed, accurate decisions and grow their business. We utilise the latest technology to make data analytics and revenue management seamless.