According to an STR report the net propensity to travel increased by 32% in February 2022. It was a significant leap from late 2021 when the same benchmark dropped by more than -50%. Recently STR also found a sharp rise in occupancy rates at a global level. The Average Daily Rate (ADR), on the contrary, remained stable, but Revenue Per Available Room (RevPAR) escalated by approximately 4%.
These metrics are undoubtedly a good sign for the hospitality sector, but travel patterns and past demand are still not back in place as they once were. Many industries are still in a recession, and some of them are going through a depression phase. As per the research by STR, this number is around 25% of the global market.
Revenue managers can’t practice the same old ways to succeed in this changing economic environment. In such a scenario, just analyzing historical and competitor data is not enough to set room rates. Instead, managers must focus on forward-looking demand signals like monitoring the booking behavior in a data set, as it will help them make better pricing decisions.
Keeping an eye on forward-looking data also helps managers cater to the industry’s changing needs and capture demand ahead of the competition. Therefore revenue managers will win big even if the recovery in their regions seems sluggish.
Forward-Looking Revenue Strategy
Historical data and internal information are undoubtedly essential to arrive at optimal pricing decisions. Analyzing external forward-looking data, however, is equally important to evaluate other critical insights and make an informed call. Check out here the three vital attributes that can help you shape high-yielding forward-looking revenue strategies.
Internal Data: Revenue managers can gain a valuable perspective from their properties’ historical performance data. It helps them find room for improvement in terms of pricing, targeted guest segments, etc. On-the-Books (OTB) data is another essential attribute that managers must examine. Comparing historical and OTB data helps spot changes in trends and booking behavior. You can also gain clues about prospects for room rent optimization and distribution because of the same.
Market Data: Analyzing market data allows managers to optimize their position in the market. Factors you must check in this category are the comp set’s rates, restrictions, upcoming events, holidays, etc. By thoroughly inspecting such parameters, you can efficiently determine which of your competitors offers the best value for money. Comparing your OTB with market OTB data will help you see whether you are ahead or behind your competition. Therefore you can make the necessary tweaks and succeed while crafting your new pricing strategy.
Travel Search Data (External): Revenue managers can forecast demand for a particular location or in a specific time frame by looking at the search pressure in flights and hotels. As a result, they can become proactive with pricing before receiving bookings.
Revenue managers can understand the market better by examining these data pillars. It will help them prepare for the changing demands by positioning them accordingly. However, there is one more thing that managers must bring into action to level up the profitability of their properties.
Make It Possible with an Automated RMS
Analyzing the data pillars mentioned above is crucial for optimizing room rent and providing the best value to the guests against the money they are spending. It makes a hotel more competitive and attractive.
However, manually collecting and analyzing data is exceptionally time-consuming and daunting. Most importantly, it can’t be done in real-time, and you may access only a few data points if you invest in business intelligence tools. Thankfully Revenue Management Systems (RMS) containing forward-looking data can address all these issues as they are equipped to collect and examine all three data pillars in real-time. Pricepoint is one such automated RMS helping clients with hotel revenue management through intelligent price automation.
Pricepoint users can evaluate forward-looking demand data, access real-time market data, keep an eye on competitors’ steps, and more. Leverage the power of revenue management automation by capitalizing on our high-performing RMS to keep competition at bay. Book a free demo now to see how our revenue management solution helps you save time and increase revenue. Sign up now!