Collaborating Revenue Management and Marketing Will Increase Your Hotel’s Revenue

I remember my training days when I first started working in the hospitality industry. I was dumbfounded after getting to know about the things that go behind running a hotel.

To be honest, I never thought that the industry is so huge and there are so many aspects of it. But with time, my knowledge and experience grew and I feel it is now my responsibility to share all of it with you.

Today, in this blog, we are going to look at a very interesting topic.

Revenue management and marketing are undeniably two of the most important elements of a hotel. They can make and break a hotel.

But do you know that these two departments are closely connected?

I am not saying that revenue management wouldn’t work without marketing or vice versa. Rather, when you form an alliance with both, it works wonders.

Revenue Management in Hotels

Before we go on and talk about revenue management, let’s touch upon yield management.

It was in the late 1980s when Marriott adopted yield management. And soon, it witnessed good returns.

Seeing Marriott’s success, other hotels started experimenting with this pricing strategy too and it became a common practice.

However, with time, strategies evolved and it turned more comprehensive which is now known as revenue management.

Revenue management, today, is one of the critical aspects of a hotel. It undoubtedly acts as the backbone of a successful hotel business.

Hotels from all around the world are betting big on revenue managers and systems to optimize the revenue potential and gain greater returns.

What is the Role of Marketing in the Hotel Industry?

It’s another essential element of a hotel. However, marketing isn’t new for this industry; it has been around for a long time and has evolved significantly.

Let me take you back in time a little.

Remember, back in the past, hotels used to advertise on big roadside hoardings? The idea behind it was they would expect people passing through to look at it and come to their hotel. Not to mention, these advertisements were always placed within the distance to the hotel. And no doubt, it did work!   

Then you would also see hotel advertisements in newspapers, wall posters etc.

The marketing segment was different.

But now? Things have reached a whole new level. Hotels are putting massive bets on digital marketing. Be it Google, Facebook, Instagram, hotels are running ads on a variety of channels.

And why not? After all, it is important for hotels to be as appealing as possible if they want to drive bookings and improve revenue.

The Relationship Between Revenue Management and Marketing in Hotels

Now, let’s address the elephant in the room.

Can marketers and revenue managers work together?

The answer to this is ‘they can’ and ‘they must’.

Both revenue management and marketing departments in hotels have worked independently in the past. However, with the boom in digitisation, the requirements for both departments have increased.

Marketers and revenue managers are required to tap into various aspects to deliver exceptional results for hotels. And this can be achieved by combining the strengths of both departments.

But how can hotels do it?

A Collaborative Approach

When I say collaborative approach, I mean hotels need to understand both the departments in-depth. And lay down a blueprint of how they can work hand in hand.

Now, here comes the most interesting part of this entire scenario — what one has that the other one wants?

Confused?

Okay, let me explain this to you with an example.

Imagine you’re a content marketer who’s good at SEO and Facebook ads. However, lately, your ads aren’t getting much traction.

Similarly, there’s this other person who is an amazing writer and his blogs aren’t getting traction.  

Now, this is a perfect situation, where both the parties can form an ally and work together.

The writer can use the content marketer’s SEO knowledge to rank his blog on Google. While the content marketer can use the writer’s skills to curate attractive Ad content.

This is the same scenario for revenue management and marketing.

Collaborating revenue management and marketing can significantly improve a hotel’s bottom line. Hotels just need to maintain open and effective communications between revenue management and marketing.

How can marketers help revenue managers?

Hotel marketers require a lot of data to differentiate themselves from the competition and to carve out the best path forward for the hotel brand. And fortunately, the marketers do have hold of some prominent data points.

While there are various data points, let’s look at one point as an example.

I am sure you know how important ‘guest segmentation’ is in hotel marketing. It helps marketers in dividing a market into homogeneous segments and targeting each with a distinct message.

Now, if hotel marketers help revenue managers with guest segmentation, they’ll be able to create rates that will attract the right people to the hotel.

This is just one aspect and example. If you would want to learn more and want me to cover anything from this aspect dedicatedly, do let me know.

How can revenue managers help marketers?

Now, this also works the same way. There are various things that revenue managers have access to or work on. Marketers can use information like room pricing, compset analysis report, demand forecasting report, budget etc. to create a campaign that delivers much better results.

For instance, if marketers learn about profitable pricing, they can create custom campaigns with the pricing that drives the right set of people to book with the hotel.