Revenue Managers are a critical part of the puzzle when it comes to hotels meeting (and exceeding) their revenue targets. The insights and forecasts from a revenue manager can change the dynamics of the entire organization and lead it to profitability - given everything else works in tandem of course!
While there are a ton of components that can assist a revenue manager in planning, forecasting and optimizing revenue for a hotel, one of the most important factors is the accessibility and reliability of data. In order to understand what has worked, not worked and what can really help move the needle at the right time, revenue managers need access to reliable historical data.
Now the issue is - with the number of systems in a hotel - there is a TON of data out there. It can be a maze to navigate through and can quickly get overwhelming and exhausting. This is why we put together a list of the top 6 revenue management system reports that every revenue manager needs to familiarize themselves with to always have their pulse on the right numbers!
Let’s dive right in!
The Top 6 Revenue Management System Reports for Hotel Revenue Managers
1) Pace Report
The main focus of the pace report is on pricing strategy effectiveness. It reveals whether there are more or fewer reservations than expected and whether the price is too high or too low.
While hotel revenue managers already utilize this report often, we recommend daily eyes on this report - especially with the current climate and changing trends.
Here are the three different kinds of Pace Reports:
a) Room Type Pace Report
Since we all know the market is constantly changing, the room type pace report helps reveal patterns in crucial market dynamics that may require additional research. For example, the occupancy rate for a particular month might be the same as last year, but if the room mix is more inclined towards lower category rooms, it might be a sign that:-
1. Customers' budgets are getting smaller
2. The better rooms are pricey
3. The brand is waning among the best possible consumers
These details enable hotel revenue managers to take quick action and pivot at the right times to strategically overcome obstacles.
Monitoring these reports also prevents terrible pricing decisions. For instance, if the current total room occupancy is greater than last year, the first reaction might be to increase the rates due to higher demand. Many revenue managers would raise the BAR rate, and all other room types would also have a static markup hike.
However, if observing the room type pace report, we would have known the real story: higher occupancy is being caused by demand for room types in a lower category specifically - and not just an overall increase in demand. Therefore, the decision to increase the bar rate would not have led to a desirable result - in fact, it would have been quite the opposite!
b) Week Parts Pace Report
Certain hotels make most of their business from weekends, while others consider themselves weekday properties. The week parts pace report aids in maintaining equilibrium and signals any slippage for immediate pricing action. For instance, if you anticipate having slow weekdays, they should, at the minimum, keep the pace to avoid undoing weekend gains. This may translate into making rate adjustments that help prevent the "weak" days from negatively impacting the profit and loss overall.
c) Recurring Events Pace Report
Some establishments' annual revenue may be primarily based on several recurrent event days. A pace report by recurring events can show changes in trends that could help you manage your price tactics more effectively. For example, if a federal holiday falls on a weekday, say Wednesday rather than a weekend, that day the occupancy rates would be majorly impacted. By isolating the events, you may keep a close eye on the days with the highest impact. Additionally, you can view the effects of non-event dates, which comprise the great majority of the days of the year, on your profit and loss.
d) Trend Analysis Pace Report
Hotel Revenue Managers should always look for the current trends in the hospitality sector. For instance, considering the present scenario, contactless payments, virtual reality tours, sustainability and personalization are some ongoing trends in the hospitality industry. In the current situation, where the booking behaviour of the guest is changing continuously, comparing the trends helps to effectively utilize the property's space and pace trends for your hotel. The trend analysis report tells us about future market conditions, significant forces, constraints, obstacles, threats, and opportunities affecting the global market. It helps one understand the performance of hotels in the past and forecast the future based on current operations.
2) Comp Set Report
This is one of the revenue management system reports for hotels—also referred to as an STR report— provided by a third-party analytics company. This report's main objective is to evaluate a property's competitors in light of the variables that affect guests' purchasing decisions. These variables are often referred to as the Market Penetration Index (MPI) and include:
1. Occupancy Rate
2. Average Daily Rate
3. RevPAR (Revenue Per Available Room)
4. Market share
The Comp set report helps establish competitive benchmarks that can assist in evaluating current performance and keep the property on course to meet and surpass performance expectations based on its local market share
3) Daily Activity Report
This report summarizes the activities currently being recorded for upcoming stay dates.
It is a quick reference tool and indicates the total current activity for future stay dates. This report can be segmented into-
Property
- Stay date
- Customer segment
- Rate segment and room type
- The length of stay
- Rooms sold to groups
- Total Revenue
- Total room and non-room value
- ADR and RevPAR
4) Channel Analysis Report
The Channel Analysis Report is one of the revenue management system reports for hotels that tells you how different distribution channels are performing. These channels indicate how well your property is achieving its revenue and profitability targets. Mapping this with the current rate strategies and inventory allocations for that specific channel can help show if the allocations and predictions are in sync - or if it needs some readjusting.
5) Market Segmentation Report
The three most fundamental hotel market segments are:-
1. Individual travellers
2. Business travellers
3. Groups
These segments are broad and contain many sub-segments. For instance, the group segment may be further broken down into occasions like weddings, corporate gatherings, and governmental bodies.
This segmentation is frequently used as the basis for budgeting and forecasting. Therefore, observing trends in segmentation is essential. The Market Segmentation Report assists in documenting every aspect of any adjustments to the segmentation mix or switching between segments to boost profitability and uphold the strategic target. With the use of clever pricing or promotions, one can drive the sector mix in the direction of the appropriate composition.
6) Geographic Distribution Report
Numerous hotels have noticed a change in their geographic feeder markets since the global Covid pandemic began in 2020. Most hoteliers wonder whether the current geographic mix will persist, whether we'll return to the previous trends, or whether a third new geographic distribution of feeder markets will emerge.
To communicate with the relevant feeder market, a hotel revenue manager needs to give the sales and marketing team the necessary information to stay on top of trends and continue to attract and close business even as feeder markets shift.
Wrapping Up
Revenue management is crucial! Therefore, it is the need of the hour for hotel revenue managers to incorporate error-free revenue management system reports for hotels. Continuing to track, measure and report on trends, shifts and behaviors not only allows for a better understanding of past successes (or failures!) but also allows for a data based approach to projections - which in-turn makes success a much higher probability.
Let us know which report you liked the best!
