Revenue management is an important tool for increasing sales. But there are big differences between city hotels and holiday hotels. We'll explain to you what the differences are and what you should pay attention to!
Revenue management — what is that?
Revenue Management is the systematic management and optimization of a company's sales. The aim is to maximize sales or at least optimize returns. Revenue management is therefore an important tool in the strategic and operational controlling of companies.
In the hotel industry, revenue management is primarily used to room rates to ensure that as many guests as possible can be accommodated at the highest possible prices. An attempt is made to keep the hotel's occupancy rate as high as possible and at the same time to control the prices for the rooms in such a way that they correspond to the respective market.
The importance of revenue management in 2022
Revenue management in hotel companies has developed strongly in recent years. Whether it's a city hotel or a holiday hotel, businesses are increasingly relying on professional and data-based decision-making processes to maximize sales.
New technologies such as big data and artificial intelligence are also being used more and more frequently. For example, based on large amounts of data, better forecasts can be made with regard to room availability. Automated price optimizations can also be carried out with the help of artificial intelligence.
However, revenue management is not limited to the hotel industry. Other companies such as airlines, car rental companies and concert organizers are also increasingly using these methods to increase their sales.
Revenue management will therefore continue to gain in importance in the future and will probably also be further professionalized and technologically advanced.
Differences between city hotels and holiday hotels
City hotels are generally more expensive than holiday hotels. This is due to the higher operating costs associated with operating a city hotel. Operating costs include rent, personnel and advertising. It is therefore important for city hotels to achieve high occupancy rates in order to make profits.
Holiday hotels, on the other hand, are generally cheaper than city hotels. This is because holiday hotels are usually located in rural areas or at popular holiday destinations. As a result, they don't have the same operating costs as city hotels. Holiday hotels can therefore be profitable even with lower occupancy rates, in particular through package offers.
Compared to city hotels, holiday hotels often have to cope with seasonal fluctuations in demand. This means that the prices for holiday hotel rooms usually vary significantly. During seasonal weddings, the prices for a holiday hotel room can therefore be significantly higher than in the rest of the year.
Because of this fact, it is important for holiday hotels to adapt their revenue management strategy to the respective season and holiday periods. While city hotels usually have consistently high demand, holiday hotels can expect significantly lower room prices in the off-season.
Another difference between city hotels and holiday hotels is the type of clientele. While city hotels are more commonly used by business travelers, holiday hotels are particularly popular with families and holidaymakers. As a result, the prices for holiday hotel rooms are usually slightly lower than the prices for city hotel rooms. Business travelers are also significantly more willing to pay a higher price. On the one hand, this is due to the fact that fewer alternatives are available due to the usually shorter booking period. In addition, foreign money also spends better and faster, so the room may be more expensive, provided that travel policies permit it. As a result, “more aggressive” yielding can usually be used at city hotels.
In summary, city hotels and vacation hotels require different approaches to revenue management. While city hotels tend to rely on constant demand, holiday hotels must adjust their prices seasonally. In addition, the prices for city hotel rooms are aimed more at business travelers, while the prices for holiday hotel rooms are aimed primarily at holidaymakers and families.
Conclusion:
Revenue management is an important tool for increasing hotels' earnings. Although holiday hotels and city hotels appeal to different target groups, both can benefit from revenue management. However, it is important to know the differences between the two types of hotels in order to successfully implement revenue management.
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