Top 5 Revenue Management Trends For 2022
Revenue Management in 2022 will move beyond the previously understood limits of the role into exciting areas of service management and revenue creation.
Despite an incredibly tough 2 years, the core facets of Revenue Management still stand true - setting pricing strategies and leveraging business intelligence to maximise revenue streams.
But revenue management is now central to recovery management, and the role of a revenue manager - like so many others within COVID-affected industries - is changing.
Revenue managers are having to diversify how they approach their role. If 2020 and 2021 were about riding a wave of continual, albeit increasingly well-handled crisis, 2022 represents a year of opportunity. This next year offers a chance to redraw how revenue is generated, how businesses operate and move back into growth spaces, and how the people who create structures of revenue management collaborate with others to create new streams of income.
Here are the top 5 Revenue Management trends of 2022:
1) Non-price point differentiation
When considering the shifts within segmentation strategies - the drop off in international travel for the foreseeable, the rise of staycationing, communities of remote work and distance learning, hybrid-event spaces, relying on short-haul feeder-markets - the wider accommodation and hospitality sectors have an opportunity to de-segmentise their service, and offer something beyond simply good price points.
This includes turning away from room-related revenue focuses (to a degree), and looking at different types of work, stay and leisure packages. It also means looking at direct-booking strategies, cross-department strategies (see below) and branding-related ideas of value, overprice effectiveness.
2) Big Data and Forecasting
Hotelrevenueinsights.com states “forward-looking data”, among other post-COVID priorities as a benchmark for new, novel forms of predictive revenue management. This means rather than only looking at historical trends, revenue managers across heavily impacted sectors need to seek out rapidly-deployed, real-time data and trend analysis to better predict demand, and drive investment in the most effective ways to maximise income. In regards to forecasting, revenue managers have to keep a keen eye on the market and stay cognizant of our fast-changing working and living environment.
But forecasting doesn’t just mean looking at revenue streams with blinkers on. For example, staff shortages plague our industry, yet expectations remain high and service has to remain top tier. Workforce forecasting has to be elevated operationally to guarantee a functioning company. This means creating resilient hiring strategies and retention programmes, looking at L&D, and how your teams need to re-skill as customers, services and interactions become digitally oriented.
3) Cross-departmental collaboration and resilience
In the search for top-level experiential service, your entire enterprise needs to be pulling in the same direction. It means you have to collaborate with every head of every revenue-generating part of your operations, from IT to Marketing to Catering. While your focus has to remain on profit, the real goal of creating crisis-proof revenue streams is by creating resilience across the company.
4) Flexibility of offer
Flexibility is a key word across multiple facets of revenue management. While some back of house processes can be made more efficient and team management can be centralised, taking a holistic view of your business - such as cancellation policies, or dynamic pricing - will stand you in better stead in the long run, and will create less reactive, more proactive, customer and revenue improvements.
5) Will corporate travel bounce back?
Finally, while the staycation bump looks likely to continue, traditional business travel may lag. However, even in that regard, there are small opportunities to pivot away from legacy “business”-centric offers toward a more hybrid, more flexible business-friendly operation. From offering co-working spaces, to re-strategising your corporate offers, to not act is to die. Forward-thinking revenue managers should see these changes as a chance to flex your brand, invigorate other elements of your business, and reach new audiences.
The Bottom Line The slow crawl out from the depths of COVID has meant venues reopening with a new sense of drive, space and passion for the industry. Demand recovery and revenue management work hand in hand, so for every process, front-end, website or PR push, remember the wider trends within revenue management stand to make as much an impact on your recovery, if not more, than any other function within your business.
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West London, London
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