The revenue management industry within the hospitality industry has been evolving particularly following the economic turmoil following 2008. The need to be understand and adjust pricing and income models has taken a forward seat with advances in hotel management softwares. IDeaS Revenue Solutions, the leading provider of pricing and revenue management software, services and consulting, announced its latest innovation in the science of revenue management : IDeaS Function Space Revenue Management (FSRM). Powered by SAS® technology, this solution will enable hoteliers to capitalize on non-room revenue streams and increase group and function space profits for hotels.
In a drive to increase profitability, all areas of hotel management are being investigated. As management focus moves beyond occupation and room rates, the science of revenue management continues to grow and mature,towards total revenue performance. In other words, optimizing revenue from all of a hotel’s available revenue streams (including rooms, food and beverage, spa, golf, retail, etc.).
“Meetings and events often account for 40 to 60 percent of revenues for many hotels, yet profits are left behind when function space goes unsold or undersold,” said Sanjay Nagalia, chief operating officer of IDeaS. “Our breakthrough solution now empowers sales organizations to optimize profits across all function space revenue streams, and drive better revenues company-wide. We’re incredibly proud of our team for this innovation, bringing our clients closer to Total Revenue Performance.”
Since group business represents up to 40 to 60 percent of revenue potential for many hotels, many hoteliers recognize the need to take a more holistic look at their meetings and events revenues. They know that the decisions they make regarding their function space can have a major impact on the bottom line.
However, with the appropriate tools and data to learn more about function space demand patterns and pricing strategies, management can educate their teams and improving business processes to ensure that their function space becomes a strong profit source of its own.
IDeaS is addressing this area with a Function Space Revenue Management tool and empowering sales organizations to evaluate not only group business, but also revenue impact on an entire hotel—including rooms, food and beverage, function space and more.
IDEaS state that their systems :
- Forecast and validate expected demand, by day and day parts, using advanced analytics
- Increase group profit by optimizing the total profit contribution from various revenue streams
- Evaluate demand-driven displacement
- Make demand-based changes to free sell restrictions on function-only business
- Maintain targeted profit per available space time (ProPAST) levels
Function Space Revenue Management has been adopted by several hotels through charter partnerships with IDeaS.
“In our competitive hotel market, revenue management is the key tool to manage the business, and it is imperative that we can apply revenue management practices to our Meetings & Events space. We are delighted that IDeaS is leading the industry in this area with their Function Space Revenue Management Solution. It delivers precise evaluations of meetings & events revenue opportunities, allowing us to maximize profit potential across the entire estate,” said Birgit Haake, director of revenue management, Maritim Hotelgesellschaft mbH.
IDeaS say that optimizing function space revenues starts with three steps.
The first step is to identify trouble spots and prioritise areas where immediate actions can be taken. Secondly, start planning to address each problem area and its individual issues. The third step is to start executing the plan as an ongoing strategy.