7 Resort Revenue Management Strategies for 2022
Resort revenue management is essential to maximize bookings and avoid leaving money on the table. Unless you can afford to hire a dedicated revenue manager, however, it can be hard to know where to start.
We work with resort managers to help them optimize pricing, distribution, and bookings based on the latest industry insights and billions of data points. We reached out to our revenue management experts to ask them which resort revenue management strategies they recommend.
- What is resort revenue management?
- Resort revenue management challenges in the hospitality industry
- 7 Best resort and hotels revenue management strategies
- Checking out
- Frequently asked questions about resort revenue management
Based on those conversations, we’ve put together this handy guide. After reading it, you’ll know:
What is resort revenue management?
Resort revenue management is a strategic, data-driven approach to maximizing bookings and revenue. It involves predicting demand to inform decisions about pricing, distribution, and marketing.
To put it another way, selling:
- The right unit
- To the right person
- At the right time
- On the right platform
- For the right price
Resort revenue management challenges in the hospitality industry
Some resort revenue management challenges include:
Unpredictable demand
Revenue management relies heavily on accurately forecasting demand, consumer behavior, and booking trends. Since Covid-19, shifting markets, economic conditions, travel rules, and guest preferences have made this more challenging than ever.
Seasonality
Many resorts must generate 80% of their total revenue in 20% of the year.
Hitting the distribution channel sweet spot
Distribution channels like OTAs bring in more bookings, but commissions eat into your profits.
Access to data
Revenue management lives and dies by the accuracy of your data.
Access to tech
Building and maintaining an integrated tech stack is expensive and requires technical expertise.
Access to skills
Revenue management is a highly specialized role that requires familiarity with the latest tech.
7 Best resort and hotels revenue management strategies
Here are some strategies to overcome those challenges.
1. Look forward as well as back
Use predictive as well as historical data to forecast the impact of seasonality, important local events, or macroeconomic conditions across all your customer segments.
2. Segment customers
Define groups of travelers and target them according to demographics, reason for stay, duration, booking channel, etc.
3. Practice yield management
As occupancy increases, so should average daily rates (ADR).
4. Don’t limit distribution
Allocating fixed inventory to specific channels can cause you to miss out on bookings.
5. Use a mix of pricing strategies
Flexible pricing helps maintain stable occupancy levels even in low-demand periods.
6. Encourage direct bookings
Save OTA commissions by setting up your own branded website.
7. Target new markets
Attracting remote workers can help mitigate off-season lack of demand.
Frequently asked questions about resort revenue management
What is revenue management in the hotel industry?
Revenue management in hotel operations is using data to predict demand and adjust pricing to maximize bookings and revenue.
What are the different types of revenue management?
The different types include analyzing historical and predictive data; practicing yield and inventory management; segmenting customers; using different pricing strategies, and targeting new markets.
What are the 3 main concepts used in revenue management?
The 3 main concepts are dynamic pricing, data analytics, and forecasting.
What is the function of a revenue management manager?
A revenue management manager’s role is to analyze data and forecast demand to adjust pricing and marketing strategies to optimize bookings and revenue.