What is Effective Revenue Management?

Posted by Shakira Jones on 17 Aug 2022 2:00 pm

revenue

What is effective revenue management? Is it implementing promotional strategies for the low periods, is it increasing your profitability through dynamic pricing or is it focusing solely on maximising the revenue in the high demand periods? Truthfully, there isn’t a one-size-fits-all solution. It's all about finding order in the chaos.

Revenue management is forever evolving, even more so in the last few years thanks to the pandemic. There are so many more factors that need to be considered when formulating a revenue strategy. These include:

  • Unreliable historical data due to the pandemic and lockdowns
  • International borders opening which leads to lower-than-average occupancy
  • Increased competition for fewer leisure travellers.

But at the end of all the variables that are presented, even with the top PMS system with all the bells and whistles, you still need human interpretation to help your business find order in your chaos.

Now there are also lots of programs out there than claim to do all the thinking for you, however, the programs can only predict so much based off the data which you are inputting. If you change something in the slightest, it dramatically changes what data you would input into your revenue management program. For example, if you have increased demand for one-bedroom apartments during the week, you may decide to sell your two-bedroom apartment as a one-bedroom at a slightly decreased rate. By doing this change, you will get different results which then will change your price due to the difference in demand.

Ultimately, the program can’t tell you that you are able to sell your two or three-bedrooms differently, there is always going to be a need for human interpretation. This is where Massey Online Management can come into play, having over 15 years’ experience within the industry. We have recently developed a Revenue Management Module, in which we provide an overall systems review including historical analysis, your online presence as well as a competitor’s analysis. Once the review has been completed, we begin the ongoing revenue management specific to your business.

If you would like to hear what more we can do for your business, contact us here.

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