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What the hotel industry experienced during the COVID-19 pandemic, first in China, then Europe and then the US, is that Revenue Management was one of the hardest hit disciplines in terms of furloughs and layoffs, both on-property and above-property at corporate offices. There were many reasons for this, such as technology rapidly changing the hotel pricing function, so I canvassed hotel industry staff to find out how they are better collaborating and morphing into what I call - Revenue Management 2.0.
These commercial strategy leaders most commonly listed the following top 5 opportunities:
The idea of Revenue, Distribution, Sales & Marketing all working as one commercial strategy team is fantastic. Directors of Revenue Management and Directors of Sales sitting around a metaphorical hotel campfire singing kumbaya and toasting smores. However, the reality is that everyone I have spoken with indicates that there are challenges to overcome, including the following top 5:
Duetto, and specifically our Customer Success team, have played a part in helping hotels overcome some of these challenges over the past 12 long months. It’s Duetto’s primary purpose to get to know our customers and their pain points and help them find solutions. For example, we all know that the performance of a hotel or portfolio of hotels is attributable to many key drivers, including people, process, and platform.
A revenue strategy platform is where the contributing factors come together. It is where commercial teams put to use best practices in a state-of-the-art application to improve hotel performance. This collaborative venue is where hotels forecast and deploy pricing and inventory selling strategies across all market segments and channels.
One of the primary goals of a commercial strategy team is to beat the competition. Hotel companies utilize performance benchmarking services like Smith Travel Research (STR) and TravelClick to assess if their strategies are working or not. According to STR data, hotels that run on Duetto outperformed their competitors in 2020. The Duetto global portfolio posted a +7% YoY RevPAR index gain during the pandemic year of 2020. The Duetto portfolio also reported an annual average RevPAR index that exceeded fair share. After a mixed start to the year, Duetto customer aggregate RevPAR index increased over the prior year every month starting in March 2020, which underscores the importance of a next-gen revenue strategy platform like Duetto after the pandemic began.
During the pandemic, commercial strategy teams were formed out of necessity, primarily as a downsizing exercise. But, a positive outcome is that this forced revenue management teams to explore better ways of collaborating with traditional sales and marketing teams, and embrace Revenue Management 2.0.
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