Revenue Management can bring tremendous financial benefits to a hotel, but only if the key data is mostly clean and up to date. 100% accuracy is obviously ideal, but you can still get value from this process with 99% or 98% accuracy. It does not matter if you are using Excel or using more advanced Revenue Management Software (RMS) - if the data is out of date or messy, the decisions can be flawed. Below are a few guidelines to see if your data is clean enough to do Revenue Management.
1) YOUR HOTEL'S AVAILABILITY (UNSOLD ROOMS)
* Data for each room type in the PMS must be accurate and up to date - at least within a day or two.
* Have a process for pulling this automatically from the PMS into your RMS software or Excel.
* Having this PMS data accurate and up-to-date will probably mean that your inventory and rates are distributed automatically to all channels with channel management software. If all OTAs and Booking Engine are not connected to update PMS automatically, then it becomes hard to do Revenue Management well.
2) COMPSET DATA MUST BE EASILY ACCESSIBLE
* If you are only doing Revenue Management at the Property level (not for each Room Type), then you can get this data for free from Expedia and other sources. You will be comparing your Lowest Available Rate (LAR) to your Competitors LAR. Therefore, if your competitors are sold out of cheaper rooms, their cheapest room may be a better room, so the comparisons are not valid. However, this should still produce valid comparisons for 90-95% of the dates, so it is still a valuable exercise and much better than doing nothing at all.
* If you want to do Revenue Management for each room type, then you will probably have to pay for a service like "OTA Insights" or "Prophet" that provides this data for a fee.
3) YOUR HOTEL'S RATE DATA
* This may seem easy, but your hotel may have more rates than you realize, and when you compare your rates to competitors it should be the same type of rate.
* The data for Competitor rates are currently published rates, which is after promotional discounts. Therefore, to make a valid comparison, your rates should also include promotional discounts. Sometimes it may also include non-refundable terms. Usually, the best way to ensure a valid comparison is to pull your rates from the same source as your competitor rates.
* Depending on your data source, you also need to make sure that your rate is a valid comparison with Competitors (includes or excludes breakfast, etc.).
* You will also want to track recent changes to your own rates. If you just lowered rates last week for a specific period in the future, then you want to give that some time to take effect and begin filling those dates. On the other hand, if you have taken no action, or raised rates, recently, then you may want to change that this week.
Those are the basic points to keep in mind. If you have all these things in place, then you may be ready for Revenue Management.