10 Key Trends for Modern Revenue Management

The past few years have given birth to a wide variety of revenue management ‘best practices’ and tools. What’s the equation for success?  Two of the major factors affecting a modern revenue manager’s success are the tools they are using, and how well RMs are integrating their knowledge with the ‘big picture’.

Today, we’re going to take you through 10 key trends in revenue management today. We won’t be looking at the timeless fundamentals, like pricing strategies, but rather at current trends and strategies. These are the ones that we think are vital to strong revenue growth and growing your direct bookings, and they are the ones you should take advantage of if you want your profits to do more than just hold steady.

Here are the trends and techniques we’ll be covering:

  1. Increasing Profitability
  2. Seizing the Moment with Book Direct
  3. Planning Ahead
  4. Better Data (Tools)
  5. Technology
  6. Cost per Acquisition
  7. Mobile
  8. Embracing Collaboration
  9. Sharing the Knowledge
  10. Keeping In the Loop

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1.  Increasing Profitability

Increasing profitability is ultimately what we’re all trying to do. However, after challenging years where ‘heads in beds’ was almost the entire strategy, the focus today is shifting to ways to maximise your return on each channel in use. This includes both online and offline strategies.

What are the most important steps to achieving this? Start by evaluating the true value and cost for each channel, and developing a clear strategy for your approach to each channel.  Without accurate cost of acquisition insights for each channel, you cannot know if the pricing strategy in use is actually the right and ultimately most profitable one.

evaluate channels revenue

For evaluating your online channels, try a hotel OTA spend calculator – it can be a good starting point to evaluate the cost of online channels, and show you the potential savings of increase direct bookings: here’s a good one to check out.

In our Revenue Management white paper, we compiled a list of the KPIs we recommend you monitor for your online channels in order to build direct bookings:

  • Hotel Website Traffic
    • Measure traffic per source
    • Measure traffic per device
    • Measure ratio of New v Returning visitors to the website
    • Measure traffic per location
  • Hotel Website Conversion rate
    • The conversion rate of visitors to bookers
    • The conversion rate of searches to bookers
    • Don’t forget – Look at the drop off points in the sale funnel
    • Identify the key pages at the start of the search funnel
  • Bookings per channel:
    • Set a target for direct bookings especially on key demand dates
    • Maximum bookings through each other channel
  • Profit per channel
    • Net ABV per channel
    • Net ARR per channel
    • Max commission you are willing to pay daily – link these to rate bands if possible

Evaluating offline channels like phones and walk-ins is, in some ways, a bigger undertaking than evaluating your online channels. When it comes to the non-digital world, it’s not as simple as taking account of commission alone and you don’t always have access to the advanced data that is available online today.

Here are some relevant, insightful sources to get you started:

2. Seizing the Moment with the Book Direct Movement

With heavy hitters like Marriott, Hyatt and Hilton putting their book direct campaigns front and centre, the book direct message has been pushed to the forefront.

There is momentum in the book direct movement, and a higher awareness of the message with consumers. However, what exactly constitutes a solid book direct strategy?

A few USPs marked with ticks are not a book direct message. Your message should a clear statement, and it needs to take prime real estate on your hotel’s website and all relevant marketing material.

Don’t think of it as just an item on the site – it has to be part of the overall marketing message for the property, and embraced through all departments.  Don’t forget! Your book direct message is your opportunity to sell the consumer on the merits of booking directly that are not purely price driven, but also focused on the value of the product.

From a consumer point of view, this article from Techly gives a glimpse of the kind of benefits that appeal to them. They mention the opportunity to get the cheapest price through reward and loyalty programmes, and the fact that OTAs might actually be driving prices up as hotels are forced to raise their prices to cover the commission costs they pay to OTAs.

An article from the LA Times has a similar point of view: they tell consumers that hotels are offering perks to those that book direct, and that the variety of these perks is a reflection of the modern hotel’s need to stay competitive in a world where comparisons can be made at a click of a button.

When you convince guests to book direct, you can encourage customer loyalty. which in turn raises the lifetime value of the guest. Here’s an insightful read from Kelly McGuire on how you can calculate customer lifetime value.

3. Planning Ahead


We’ve all witnessed this: you create an offer within a week of an event or a seasonal holiday and think, “Ah yes, I have built the offer – now they’ll book in droves!”

It worked a treat for Noah and Kevin Costner, but for the rest of us, let’s plan ahead. Not just next month, but next year. Ideally, plot out the next 5 years! In a way, that’s no different to our lives outside of work. We need short and long term plans to keep us motivated and focused. Think about what’s needed to achieve your revenue goals, and how best to implement them.

Using a monthly planner to detail out the focus for each month and the key activities taking place.

Make your plans in conjunction with ongoing use of revenue management strategies, to make sure you’re maximise potential returns – here’s a good summary of core element from Xotels: Revenue Management Strategies for Hotels

4. Better Data (Tools)

For hotels today, there’s no shortage of data – in fact, there’s often too much, and the noise starts to outweigh the signal.

Because of this, hoteliers are now focused on how to deal with big data. They are looking at the challenges of collating the volume of data available into a useful format, how fast data can be collated, and how to use quality data to inform and qualify decisions in a timely manner.

There is a need for robust reporting and analytical tools to support this.

One player that’s recently stepped into the ring is Snapshot, a company founded by David Turnbull and Michael Heinze. Snapshot is a cloud-based analytics tool that promises to provide “a comprehensive overview of your hotel data on a powerful yet intuitive dashboard” for any size hotel. It tries to give you what the name suggests: A clear snapshot of where your hotel is at in terms of all the essentials, from benchmarking to pricing to performance, bringing all your disparate streams of data into one collated dashboard.

Lennert De Jong is a great example of a forward-thinking hotelier with a good perspective on the need for better data tools. He works as Commercial Director for citizenM, and in a recent article, he discusses the importance of better data – specifically, better analytic and reporting tools for that data. He says, “We should not have data discrepancies between our finance systems, PMS, forecasting systems, and CRM… The roles in organizations have changed and so have the responsibilities.”

De Jong says that the most important aspect for revenue managers to focus on right now is the data they aggregate, and how they aggregate it. He believes that in this respect, independents are actually doing a much better job than the chains: they live by the grace of guest feedback, and they have decision-making power and ability to move swiftly that chains do not.

In an ideal world, there should not be issues over whether, for example, certain forms of revenue are classed as ‘technology spend’ or ‘marketing spend’. Instead, hotels should attempt to build an integrated system that lets them see the true value of each channel.

Here are a few types of tools that are immensely useful:

5. Technology

When you’re making your plans, there is no shortage of tech options that are targeted at making revenue analysis and accurate decision-making an easier task.  Some are solid, some are trendy, and others may just be style over real substance.

Your options range from revenue management systems to channel managers, benchmark reports, rate shopping tools, review systems and everything in between.  See where your business intelligence gaps lay and research which systems help you best reach your goals.  Demo, trial, question, review and don’t forget to ask peers for their insights on the product.

As a recent article from IDeaS illustrates, a day in the life of a revenue manager with automation is very different from a day in the life of a RM without automation. Those RMs without the benefit of an automated revenue management system are often “handcuffed” to manual data entry, more focused on logistics than strategy, and relying on more limited data than the RM benefiting from automation – not to mention the work-life balance issues!

The bottom line is that automation, properly done, frees you up to do analysis, make long-term strategies, and gives you access to more usable data for decision making.

6. Let’s talk about CPA

Yes, it’s another acronym in the alphabet soup that is the world of revenue management. This is one of the big ones, though. CPA (cost per acquisition) is a fundamental metric to evaluating the real return on your investment.

Other metrics are still important, and no one item holds all the answers. Having said that, CPA is a crystal-clear measure of how your campaigns are truly performing. It is vital that you are looking at this metric, and understanding whether your CPA % result is positive or negative.

Your CPA should be a KPI set for every campaign. For example, an optimal CPA % ceiling for a brand campaign might be approximately 12%. It depends on your hotel’s rate strategy and availability.

The concept of a cost per acquisition ties in with hotels adopting an unlimited budget in terms of brand campaigns: why ‘turn off the tap’ by restricting your spend on a campaign when you’re below your optimal CPA% ceiling? If you’re below your ceiling, you’re acquiring bookings at a lower cost than you can through other channels. You’d be throwing money away!

7. Mobile

According to a Criteo study, mobile accounts for most of the overall growth in travel bookings since 2014. The share of mobile bookings has increased from 12% to 23% from 2014 – 2015.

mobile revenue managementMore than ever, hotels need to make sure their message is clear on mobile and the user experience is optimal.

Our expert on mobile, Susan O’Driscoll, wrote a great guide on how mobile has changed so drastically, how that’s affected your guests’ online behaviour, and the steps you need to take to adjust.

Here’s the bottom line: to grow revenue from mobile, you need either a responsive or adaptive website, and you need to follow conversion best practices on mobile.

Net Affinity’s own data on mobile shows that as of Q1 2016, an average of 47% of traffic is on mobile devices. 25% of all transaction on hotels’ websites today are made on mobile – a figure which has increased by 32% over the last 12 months.

Don’t underestimate how important a revenue stream mobile is. Be prepared!

8. Embracing Collaboration

The importance of collaboration isn’t a new topic – but it’s key to growth. At Net Affinity, we’re seeing that the hotels reaping the benefits are the ones who are breaking down departmental silos, and adopting a more inclusive and collaborative approach.

When you’re talking about breaking down silos, the changes needs to apply to all aspects of revenue generating, not just HOD meetings or progress updates. Otherwise, your picture of events will be incomplete. Think of it this way: if your left hand and right hand are working without a ‘brain’ – a collaborative, information-sharing center – between them, how can you expect them to work efficiently? Shared information is your hotel’s brain.

data revenue meeting

For a rough estimate of how your hotel’s doing, consider how often you encounter the “holy trinity” at sales, marketing, revenue and strategy meetings: how often are the General Manger, Marketing Manager and Revenue Manager all present in the meeting at the same time?

A recent interview with Hilton’s CMO Geraldine Caplin cites the benefits of collaboration in their recent Stop Clicking Around book direct campaign. These benefits include increases in achievement, learnings and consistency from merging their digital and marketing departments:

“Last year at this time, Hilton’s marketing and digital departments were closely aligned, but they were still separate and autonomous units. In September 2015, Hilton merged the two departments.”

What was the eventual result of all the cross-departmental work that went into Hilton’s Stop Clicking Around campaign? Well, aside from a stellar Book Direct campaign, they got this:

“[The campaign and strategy behind it] also resulted in a shared culture throughout the team. It bonded our digital and marketing, it bonded our brands teams, and it bonded us across the world, because we all have a single mission. We’re all aiming for the same thing. So when everything went live, whether that was on the Grammys or at Prague Airport, the elation among everyone seeing that come together was for me as much about our team as it was for the customers.”

Your hotel team should be similarly sharp and focused on a goal, and you should all be working together to achieve it.

9. Sharing the Knowledge

The phrase ‘Knowledge is Power’ was not followed by the line, ‘So hold onto it for dear life and tell nobody about it’.  Knowledge management is a key part of a successful revenue management strategy.

Just as departments need to work together, you need to share knowledge with each other, challenge the norm and stretch your ideas further – which is a lot easier if you’ve got a couple of brains working together.  Again, this applies to all aspects of revenue generation for your hotel!

One example of this is your website booking engine. Your website booking engine is your direct online channel. When, for example, you hold back on sharing accurate knowledge on how the website performs in relation to overall sales and in relation to online channels, your provider only sees one part of the pie. If you don’t know where your weaknesses are, there’s no way you can improve and succeed.

Knowledge management, when properly done, has historically saved leading companies millions of euro each year. A good knowledge management system involves having people and a culture dedicated to using the system, a team that knows the benefits they can get from it and are motivated to share the knowledge, and the technology to achieve it all.

10. Consume Industry News & Info

We are all busy, but it’s important to take a pause to read up on what’s topical in industry. If you can fit it in before the daily rush takes over, you’ll be able to lift your head and see what the industry at large is talking about.


Checking in with the big picture can help reassure you that challenges you are facing are not unique to your property, help you see what new tools are on the horizon, and glean insights into trends and potential items to research or implement.

It’s also a great way to stay engaged with this industry we are all so passionate at about.  There’s no shortage of resources to choose from, including newsletters, blogs, webinars and workshops. Here’s a few of the ones we regularly follow, many of which you’ll probably be familiar with. Check them out, skim an article or two and figure out which sites suit you best:








Download Our Free Revenue Management Whitepaper for A Complete Guide to Using Revenue Management to Build Direct Bookings

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