BASIC KNOWLEDGE OF REVENUE MANAGEMENT

Many of us have heard of Revenue Management but less of us understand the truly essence of Revenue Management.

Before we go further on Revenue Management strategy, we need to understand what Revenue Management really is in Hotel Industry. (We need to limit our discussion in hotel industry since this RM is actually can be implemented in any sectors)

Definition

The Simple definition of Revenue Management is selling the right type of room to the right customer at the right price in the right time using the right distribution channels.

Revenue management is use to maximize the potential revenue by analyze and predict the customer behavior and market trend, easy example: is selling the room at lower price if you are predicting low in room demand and sell it at higher price  if you are expecting higher demand in your competitor set area.

Good practice of Revenue management will help sales people to maximize hotel revenue in peak period and stimulate demand in low period.

In practicing Revenue Management, sales people need to take many factors before making decision, sufficient knowledge about typical clients, pricing positioning, competitor pricing, what going on in your surrounding which may impact to city or area occupancy, understanding of past statistic, what is your competitors doing, what right channels to be use and many more..

Some group of International hotels has taken seriously into Revenue Management, they even provide Revenue Room where all scratches and ideas to be kept and discuss by management and revenue team.

HOW TO START?

• Make sure all your team familiar with terminology such as ARR, REVPAR,MPI, RGI, ARI
• Prepare 30-60 minute session in Sales & Marketing Meeting to discuss specifically about Revenue, in most leading hotel they have their own revenue meeting lead by revenue manager
• Consistently train your team member about Revenue management really is, it need everyone effort, not just sales person.
• Study the statistic? Trend pick up, trend cancellation, peak and low period, city occupancy trend etc

 Or the easy way, CALL ME to train your teamJ