Towards becoming Revenue Strategists

Our Co-Founder Pontus Berner answers 3 questions about:

… the Revenue Management of tomorrow

The revenue management of tomorrow is an interesting topic. The usual answer that you hear a lot, which is also true, is artificial intelligence and technology. However, it’s not that simple. You see it depends on what you define revenue management to be. Is it only pricing and following your competitors pricing? Do you want to be a follower or a leader? If you define it to be only about the public BAR pricing of a hotel, then yes, the future lies in tech. To us at berner+becker however, revenue management is about so much more than just pricing, and the core work actually lies in the strategical work that a “revenue manager” carries out.

Combining detailed and good strategic work by people with the right skillset, built on decades of combined experience, and mixing that with the latest state of the art technology exactly fitting the hotel specific needs, that’s when magic happens. So, when I get asked about the future or Revenue Management, I say exactly that, get a well-educated, analytical revenue manager on board, stay ahead on the tech development curve, adapt with the times and evolve to work more fun and efficient, and I’m sure any hotel will see their market share and profits rise. Who knows, in the future perhaps the title “revenue manager” changes to “Revenue Strategist” or alike on a broader industry scale.

… the impact of Outsourcing

Outsourcing plays a crucial role in the future of revenue management. With more technology enabling more efficient work, one revenue manager can work on a portfolio of hotels simultaneously, so called cluster revenue management. This means no one hotel needs 40 hours of detailed revenue management work per week to be done by a professional. Hence, a more cost-effective solution is to hire experts to a lower cost of keeping that expertise in house.

This is not only true for revenue management though, but any task requiring either highly skilled expertise or facilities that you might not have in house, therefore ranging from revenue management work to financial services, to technology software development and house-keeping. Outsourcing keeps it cost efficient and flexible and removes high up-front costs, and simply gives access to skilled labour that is otherwise hard to find.

… the hotel market after Corona

I do believe a part of travel will come back, and do so with a boom. Other travel will take longer, even many years. Let’s say like this, if you are a 3-4 star business hotel in the outskirts of a business city, you will struggle quite a lot going forward before any pre-Covid occupancies and rates are reached again. If you however are a leisure focused hotel on the Baltic coast, you might even have had a record summer in RevPar last year already.

People want to travel, but for the right reasons, and here the leisure market has a huge potential to come back stronger than ever on a larger scale. Hotels that are fast in realizing new opportunities such as prolonged weekend stays where people do one to two days of home office from the destination, will surely benefit. Some destinations will benefit from this, others not. It will for example be crucial for cities to have a creative destination marketing strategy to attract this type of clientele.

I do believe business travel will bounce back somewhat too, and not everything is going to be kept to the online world. If anything, I haven’t met any sales professional that nowadays claim that they sell better via their webcam than in a face to face meeting. When companies realise this, and that they are perhaps losing sales opportunities to competitors because they didn’t show up in person when the competition did, I suspect they will start booking those hotel rooms again quickly.

However, there are of course a part of previous business travel as we knew it, that is simply ineffective and unnecessary and will never come back, which is probably for the best looking at environmental impact and sustainable travel.