8 Myths About Hotel Revenue Management That Needs To Be Debunked Immediately!
If a hotelier wants to run a business, then Hotel Revenue Management is indispensable. For the hotel to survive, one needs to manage the bottom line to ensure profits. However, many hoteliers are still refraining from implementing it due to many myths surrounding it. We are here to debunk all these pesky myths. Here are the 8 Myths About Hotel Revenue Management That Needs To Be Debunked Immediately!
Let’s Debunk Those Revenue Management Myths Now!
For any business tool, there are going to be myths surrounding it. Naturally, hoteliers will be sceptical because each business strategy has a cost. However, with people's advice, you can debunk these myths and misconceptions.
1. “Automation Will Make Hotel Revenue Management Redundant”
The adoption of technology in the hospitality industry has reached such an extent that the industry itself is speculating the consequences of this. Many are speculating that automation will take over all the human labour, including that of the hotel revenue manager. However, this is simply not true.
The hotel Revenue Management services is merely a tool to make hotel management easier. For example, a hotel has to be on various OTA Platforms. It will be much easier for the hotel revenue manager to use a tool that can integrate these platforms rather than manually change prices on each OTA.
2. “Only Revenue Managers Themselves Should Handle Price Changes”
One side of the industry believes that the Hotel Revenue Management services will make the job of the revenue manager redundant, while the other side believes that the price changes cannot be automated. Both are wrong. A revenue manager has neither the time nor the capacity to keep on changing prices on different OTA Platforms. The revenue Management system will make the life of the hotelier easier and he/she can focus on other things.
3. “Hotel Revenue Management Services Are Expensive”
One of the biggest misconceptions is that revenue management services are expensive. This is holding many hoteliers back from adopting and incorporating it. The reason is that Revenue Management Services are mostly used by high-end players. So the budget players get an impression that you need to have a lot of monetary capital to reap its benefits.
It’s not true at all. The reason why the big players adopted revenue management is that they understood the benefits of it early on. There are many affordable revenue management services available that any type of property can use.
4. “You Need High Mathematical Skills For Revenue Management”
There is a misconception that due to having concepts like pricing, revenue and budgeting, it is a segment that requires a lot of mathematical skills. However, you don't need to be a math expert to be in this field. There is the use of mathematics in this field since it involves numbers. However, Hotel Revenue Management depends on other skills as well, such as understanding business indicators and analytical thinking.
Hotel Revenue Management is all about predicting guest behaviour to optimise room inventory, sell them at the right price and the right place to generate more revenue.
5. “Outsourcing Revenue Management Isn’t Helpful”
Many Hoteliers believe that Outsourcing HRM isn’t worth it. An In-House Manager is sufficient enough and outside help and expertise isn’t required. Yes, An In-house manager will have sufficient experience, however, they will have experience in managing only one property. An Outsourced Revenue Manager, on the other hand, handles multiple properties in multiple locations. Hence, they have more experience compared to In-House Revenue Managers.
6. “You Don’t Need To Budget And Forecast Demand When You Are Doing Revenue Management”
When it comes to hotel revenue management, budget and demand forecasting are integral. Without these, you will not be able to do proper revenue management. Hotel budgeting involves estimating revenue and expenses to make business decisions. Demand Forecasting helps in predicting consumer demand over a period of time.
Demand Forecasting, Budgeting and Hotel Revenue Management go hand in hand. All three are needed to deliver results.
7. “Revenue Management Will Not Be Of Help If You Are Facing Losses”
For some reason, there is this misconception that if you are already facing losses, hotel revenue management will not be of much help to you. Some people consider the Revenue Management System to be an additional cost on top of the losses of the hoteliers.
However, the main job of the revenue manager itself is to generate higher revenue, so that the losses are reduced to a great extent. If one is wondering “How will I pay for this system?”, we have good news for you. There are many RM systems that offer a trial version to test their services. Not only that, there are many services that take payment only after achieving their goals.
8. “You Should Only Start Considering Revenue Management Only When the Hotel Gets Constructed”
There are many hoteliers who wait for their hotel to get constructed before they start revenue management. However, one can start RM even before that. You should start preparing for it from day 1.
While the hotel is still under construction, one can use this time to learn about the market segment, sales strategies, digital marketing strategies and start approaching suppliers and vendors.
To Sum It Up…
Hotel Revenue Management has emerged as a major segment within the hospitality industry. For any hotel, homestay, holiday villa, resort etc., to survive you need to manage and generate revenue to gain maximum profits and minimum losses.
Misconceptions like the ones stated above prevent hoteliers from adopting Revenue Management and making smart decisions. If you want to make the most out of revenue management, then you will need to abandon these myths.
Outsourcing your revenue management will provide you with expertise and efficiency. Bigfoot Hospitality is here to provide you with Revenue Management Solutions. Check our blog to know more about the hotel industry.