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Shifting Your Hotel from Manual to Automatic
You climb, stair by stair; leg muscles straining every step of the way. Time is slipping by: you have so many things to get done; yet you must climb all of these stairs to get to your destination. Beads of sweat form, you shift the load in your arms: with every floor, the briefcase you're carrying seems to multiply tenfold in weight.
You finally get to your office-now what is it you were thinking about? What is it that needs to be done?
Press the button. Arrive.
It's effortless. It's shifting from manual to automatic.
Now let's take a leap in logic and apply this same "manual to automatic" concept to hotel revenue management. In today's environment-with multiple channels and infinite revenue optimization decisions-don't you think it's imperative for hotel revenue managers (RMs) to make revenue management effortless by shifting from manual to automatic? Many industries made the transition long ago and have never looked back:
Faster, Better, Stronger
Consider the automation of channel management: there are so many channels available to the consumer today. OTAs, mobile booking, travel agents, telephone, walk-ins... the list goes on and on. And the speed at which emerging channels appear today is incredible.
It is hard enough to effectively manually manage the channels currently available-with new ones popping up every year or so, it could almost be impossible. Now imagine the cost associated with managing all of these channels, both new and old, manually as opposed to automatic. The human incremental cost of monitoring, adjusting, and calibrating each new channel is enough to justify the switch. An RM relying on manual technology for channel management is vulnerable, like a building with an old alarm bell, whose owner hopes that someone will hear.
Not overwhelming enough yet? Let's take into account inventory management. Not only do RMs need to monitor all booking channels, they also need to instantly update inventory in order to optimize revenue. If a hotel is manually updating inventory, chances are there will be a delay - and chances are there will be money left on the table. To illustrate this, let's look at a hypothetical scenario:
Before the hotel's RM can update rates and inventory levels due to a group booking of 20 rooms, the hotel staff has booked two customers over the phone while a three-night booking was made through an OTA. All bookings overlap on the same dates, and the RM has yet to make his initial rate and inventory update.
In this example, since rates weren't able to reflect the initial change in inventory (i.e., the group booking), money is being left on the table.
Is it significant? Maybe, maybe not; but spread such incidents over three months or a year and it adds up to asignificant loss. The RM must update inventory and transmit the rate affect across all channels, instantly. Like a bank customer waiting in line at the drive-thru bank teller: his time is valuable-how much of it is lost relying on old, manual technology?
Of course, keeping revenue optimized also relies on constant rate adjustments based on historical patterns, forecasts, and seasonal highs and lows. Effective software systems start with the appropriate data (based on the RMs recommendations) and adapt to current trends. This automation of booking pace gives RMs the option of simple oversight, or the ability to completely override and control the system based on both forecasted data, and real-time, actual results. Much like today's CRM systems, software automation in revenue management isadaptive. Automatic booking pace is the difference between standard mail-in CRM response cards and adaptive, interactive mobile marketing communications.
So, given the marked improvements that switching from manual to automatic gives to revenue managers, why not get from point A to point B effortlessly through a software solution?
To not do so is like taking the stairs in a world filled with high-rises and elevators. Why would you?
About the author
Jean Francois Mourier is CEO and Founder of REVPAR GURU, an intelligent online solution that provides hotels around the world with an alternative revenue management software system designed to deliver maximum bookings and profits, as well as the convenience of full automation and integration 24/7. As REVPAR GURU's custom-designed Yield Dynamic Price Engine is the only real-time revenue management system available on the market, it meets the rapidly changing needs of hotels looking to increase their competitive advantage in an increasingly difficult marketplace. REVPAR GURU's system offers dynamic rate optimization, real-time pricing, integrated internet and extranet yield channel management and GDS sales distribution, to increase a hotel's RevPAR intelligently and effectively, while maintaining rate integrity and automated rate parity. Since 2004, smart hoteliers worldwide have used REVPAR GURU's software system to increase occupancy, average daily rate (ADR) and RevPAR.
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