A Channel Management Expo was held in Baltimore last year. It was attended by a group of the industry representatives in the greater Baltimore area. The main topic is the importance of revenue management and its connection to channel strategies.
According to almost all the experts present there, the importance of revenue management is inestimable. A lot of evidence has been presented and the industry buzz regarding this practice is spreading to other industries. Any hotel manager for instance knows just how important it is to factor in revenue management when it comes to creating profits in the hotel industry. The practice has been called yield management in the old days. This name reflects something of the pro-activeness as a point of view on business. It shows a way of money making done via the marketing of rooms and through the mitigation of those unforeseen problems that arise from the permanent and yet delicate state of the hotel industry’s essential service. The newness of this technique is not a factor (it has only been used in businesses starting from the nineties and it has only now gone to such an important stage of development). A lot of executives in the industry seem to hold the opinion that running a lodging business without the best and widest possible revenue management strategy is going to lead to disaster.
And there is a lot of basis to this assumption among the channel management people of the industry. Revenue management has created a new and improved system for the industry and it basically took the post state of the stuck rack rate pricing scheme out of the general image. This move has truly had a hand in the unification of the incongruous strategies that the industry leaders have not been able to smoothen out until now. Thus, the linkages between the hotel operation depts. have been forged into a mutually beneficial bond. The notion of running a hotel business without such a strategy would be like a channel management team working without a partner portal or a PRM and instead relying on the crude and obsolete tactics that will lead to less revenue.
Revenue management is not a walk in the park though; it requires great teams to pull off the complex tasks involved. There are many skills and disciplines needed to pull it off. It is also easy to forget some of the general or basic principles that govern the process since there are many other tasks that will divert one’s focus. But the basics of this practice require more anticipation and understanding of what things affect the customer’s behavior. The goal of this practice is to develop more revenue generation for one business establishment. However, if a channel management team does not focus on the founding principles and instead gets diverted into thinking that the other processes which are nearer the end goals are much more important then the whole process rots away since one the root or principle of anything dies, then the whole system fails.
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