Hospitality organisations need to review revenue management practicesAccording to IBIS World, the global hotels and resorts industry is expected to grow to US$580 billion in 2012 but it is vital that these organisations take a flexible approach to pricing to ensure long-term success, as a recent eBook indicates that they could lose up to $17 billion a year. The eBook titled, 'The Truth About Pricing and Revenue Management', released by JDA Software Group, estimates organizations could see a 1-3% increase in revenue if such an approach is taken. The group reveals that one third of hotel properties do not have automated revenue management systems in place. An automated approach means businesses can adjust pricing as customer demand; competitor pricing and other external influences fluctuate and ensure that pricing remains at a profitable but competitive level. "Additionally, our research has shown that over half of revenue managers believe customers think revenue management is a business trick that drives customer ill will, if prices are complex and change too frequently. The truth is that customers are more open to a company's revenue management efforts, if that organization communicates the benefits of the dynamic pricing it brings. "A more flexible approach to pricing offers the means to move with the industry. If demand is expected to dip, or boom, pricing is instantly repositioned to reflect that shift. It is this ability to better understand customers and be proactive in pricing, rather than simply reacting to the competition that will help ensure sustained success for the hospitality sector." |