New year brings new revenue strategies
The costs of driving demand are rising across the board, and a new breed of revenue managers must take those costs into account moving forward, sources said.
REPORT FROM THE U.S.—No longer are hotel owners and operators singling out online travel agency commissions as the Grinch who stole profit margins. Today, costs of driving demand to hotels are rising across the board, from digital marketing to brand fees to finding partners in new channels such as mobile and last-minute.
The traditional revenue manager—tasked first and foremost with pricing the inventory appropriately—must now adapt to include all of these factors when making decisions about where to place inventory. “Cost per acquisition” are the new buzzwords, and experts suggest the future of revenue management lies in understanding all the costs that go into acquiring a guest.
“The costs just keep going up. It costs us more to get the same business,” said Cindy Estis Green, CEO and co-founder of Kalibri Labs. “At the same time, efficiency in acquiring business has declined. We have not gotten more efficient and we’re, at best, holding our heads above water.”