How to align marketing with revenue management at your hotel

Many hotels share a similar struggle when it comes to breaking silos and collaborating effectively between revenue management and marketing.

Both roles rely on data such as demand patterns, booking behavior, guest data such as feeder markets and demographics to shape their decision-making and capture revenue opportunities. Both have vital insights to share, clever ideas to implement, and want to drive revenue. Creativity and data can – and should – align quite perfectly across revenue and marketing.

Yet, data sharing across departments, and mutually beneficial support isn’t always a given. For independent hoteliers, it’s especially important to understand how to encourage a more collaborative mindset.

Let’s start by looking at the basic steps collaborators from both departments should take to work more closely:

• Encouraging a mindset shift within your organization. Once you’ve committed to bridging the gap, the next step is to nurture this mindset among your staff from the top down of the business.

• Leveraging data-sharing and analysis. It’s all about using commercial data to create more opportunities. Identifying different types of data that marketing and revenue share to drive performance.

• The concept of non-price, promotional offers. By relying less on discounting, and more on delivering value outside of just the lowest available rate, your hotel can deliver more profit per booking.

• Refining your data. Even the most well-intentioned projects will fail if there are blind spots in your data. Good input equals good output. Collaboration and accountability across teams will improve if you are using quality data. 

When marketing and revenue management collaborate effectively, you have a better chance of exceeding projections and delivering more revenue. It’s the kind of synergy where the whole equals more than the sum of its parts. 

To achieve this level of beneficial knowledge sharing, to achieve this level of knowledge sharing, both disciplines must do their part to drive this initiative forward. Here’s how marketers and revenue managers can contribute to better alignment with their inter-departmental colleagues.

Encourage a collaborative mindset

Ideally, there’s an understanding (and an expectation) of collaboration already existing on both sides. Both departments want to maximize revenues but take different paths to reach this goal.

There are bound to be some silos and uneven information. Revenue managers see pricing as their primary lever, analyzing demand data and booking patterns to always set the right price, while marketers deploy advertising and promotions to optimize revenue.

This gap often results in wasted effort due to each team implementing conflicting methods. It sometimes seems like the two teams speak different versions of the same language. 

To translate, it's helpful to foster a stronger collaborative mindset that better aligns marketing and revenue. Once the objectives, strategy, and tactics are aligned, it’s possible to successfully deliver increased profitability at a more consistent cadence.

To unlock the power of the data that lies with both teams, you should approach collaboration with an eye toward regular knowledge sharing that enables new opportunities and efficiencies. 

While the teams may have different metrics and objectives; the revenue team may be laser-focused on boosting occupancy for the month, whereas marketing is trying to maximize ROI on their latest cost-per-click campaign there’s overlap in the most important piece: your focus on building the brand and bringing in more revenue reliably and consistently over time.

Shared goals give teams purpose and momentum. In our experience with revenue teams around the world, common objectives lead to better outcomes in both staff satisfaction and overall revenue.

Once alignment has begun, the next phase is about solidifying trust between teams. This trust is what leads to success, and so it’s important to build bridges and nurture mutually beneficial relationships across teams.

Strive for clarity with regular discussions

Organizations that report a lack of clarity are less likely to perform at industry-leading levels and waste employee time and it takes constant reinforcement.

To achieve clarity, one approach is to have collaborative conversations early and often. It’s not necessary to wait for a regularly scheduled meeting to bring an opportunity, request or concern to a colleague, especially when it’s revenue impacting.

While it can sometimes feel like overcommunication, the reality is that things move fast. When you discuss early and often, you position the team for clarity and nimbleness.

Communicate clearly and consistently

The other benefit of routine conversations is that it improves communication. 

Whenever there’s a lack of clarity (whether due to infrequent or confusing communications), teams function poorly and performance takes a hit. 

Strive to communicate clearly and consistently to ensure that everyone knows what’s expected of them. This also acts as a mechanism for accountability. Make sure that everyone speaks the same language and knows all relevant terminology - if this means that revenue educates the marketing team about how to calculate RevPAR, and marketing teaches revenue how a Cost-per-click campaign works, so be it. When teams speak the same language they can begin working toward a common goal.

Reduce complexity by marshaling existing resources

The goal is to simplify processes within commercial teams instead of adding complexity. Achieve this by initiating a plan that leverages existing resources. By reorienting current revenue and marketing discussions, meetings can become more productive.

Revenue managers conduct daily analyses like competitor monitoring, demand forecasting, and pricing strategies, which can benefit marketers by refining their targeting and enhancing marketing campaigns.

On the other hand, marketers have a deep understanding of guest preferences, such as their booking habits and reasons for choosing the hotel. They also excel in segmenting guests into different target groups and crafting appropriate messages for each segment and channel. This knowledge can aid revenue teams in their forecasting and pricing strategies.

It comes down to sharing more with your colleagues.

Useful data sets to share

As a revenue manager, you already do plenty of analysis daily. You may be surprised at the insights that your marketers can provide around segmentation and guest personas, which can then inform how you approach your pricing. 

It’s not about doing extra work; it’s about extending the value of what’s already being done by both teams. Look to your marketing colleagues to provide ongoing insights around:

• Guest personas. While these don’t change that often, it’s surprising how many hotels don’t make these personas a part of training for revenue teams. Marketing must align the organization around target demographics.

• Guest preferences. Keep everyone up to date on who your guests are, as well as what they expect before, during, and after the stay.

• Guest reviews. To back up your personas and preferences, make it a habit to share recent guest reviews to identify opportunities for marketing and revenue campaigns.

When revenue uses market segmentation data and real-time conversion data it can ensure that its revenue strategy reflects the most recent guest behavior patterns. 

Here are the various datasets and insights that revenue managers and marketers must share and benefit from mutually:

• Demand data. Each market has its own ebbs and flows, which evolve over time. Lean on your revenue colleagues to keep you apprised of these market trends. Data includes sources such as GDS search data and Flight search data, as well as % of hotels sold out in a market which indicates high occupancy rates.

• Booking evolution. How hotels’ occupancy changes over time indicates to marketers when certain promotional strategies might be most effective. Revenue managers must also understand booking evolution to ensure that they achieve sellouts. This data comes from internal PMS data and benchmarking tools.

• Stay patterns. Understanding how far in advance guests book, as well as how long they stay, should underpin marketing campaigns. Without a clear understanding of booking window patterns, marketers may resort to panic discounting or have a marketing automation drip campaign that misaligns with average booking windows. This data is sourced from PMS data, but also leading indicators can be gleaned from search data.

Keep in the loop with revenue on these patterns – and listen carefully to any insights they provide around any shifting patterns.

Other useful data that revenue managers can share with marketers

• Pricing intelligence. Timely pricing data from a well-thought-out compset allows marketers to see which hotels do or don’t have availability, how much they charge for each of their various room types, and their pricing strategies for the various seasons and days of the week. A firm understanding of these trends helps marketers deliver more compelling campaigns, packages, and promotions. To use an example, perhaps a revenue manager checks the rate shop first thing in the morning and notices a key competitor has removed inventory from an OTA channel - this might be great information to bring to marketing so they can capitalize, and run a last-minute deal to win additional demand.

• Market demand data. Revenue managers use market demand data to forecast revenues and set future prices. This data about the hotel’s market conditions can also be useful to marketers, who can discuss patterns with revenue managers to get a sense of what's driving demand: is it geography, special events, or a new hotel? Marketers can leverage this information into current and future campaigns. For example, revenue managers may notice an uptick in production from certain feeder markets or countries, which could then be presented to marketing for more analysis, and action. 

• Benchmarking Data. Allows revenue managers and marketers to spot historical and future dates where a hotel may be ranking behind/above their competitive sets for any number of metrics. For example, a revenue manager may check their benchmarking tool (Benchmark Insight) and notice that the hotel ranks particularly poorly in a particular segment for a future date. This data can be brought to the marketing team to be actioned.

Bridging missing links between marketing and revenue management with technology 

To judge the effectiveness of your strategy you need to be able to see how your business is performing, and this brings us to the missing links between marketing and revenue: forecasting demand in your market and better business intelligence.

Predictive demand intelligence

Whether you’re in marketing or revenue, with a powerful tool to forecast demand, you can harness the power of predictive, forward-looking search data to zero in on pivotal source markets and their stay patterns.

Marketers and revenue managers can then capitalize on real-time booking intent and craft targeted advertising campaigns that truly resonate with potential guests.

Pricing

• Ensure your pricing strategies are right for those travelers looking for accommodations in your market. Revenue managers should make sure that advertised prices are enticing and logical. Also, revenue managers should work toward increasing room rates as arrival dates get closer, and make sure that pricing strategies align with anticipated demand and the hotel’s service level. For example, it may be off-putting to shoppers to offer the highest rate in the market while also being one of many select service hotels - it may be hard to convince shoppers to book, even in periods of high demand. 

Promotions and offers

• Target feeder markets that drive a high volume of searches with market-specific offers on OTAs, Metasearch sites, GDS, and/or Brand.com

• Target length of stays that drive a high volume of searches with LOS offers on OTAs, Metasearch sites, GDS and/or Brand.com

• Open mobile rate offers. Tip: On OTAs, you can target specific markets through member deals

• Become part of the OTAs' member programs to increase your visibility.

• Overbook low room categories and ensure your low rates are available to book (corporate, FIT rates, friends & family, etc.)

• Ensure your website is in parity, or offer special offers to drive higher direct bookings

Marketing

• Boost your visibility on OTAs, Meta, GDS, search engines, or even social media channels in these markets via commission increase or ad campaigns.

• Increase optimization of advertising spend down to the city level

• Reduce costs associated with campaigns in geographical areas of low demand -  eliminating some of the trial-and-error in the process

And, if you can influence your sales team…

• Develop new partnerships with travel agencies, OTAs and wholesalers located in countries with high volumes of searches, unlocking new revenue streams.

Business intelligence

In a similar vein, you need to be able to identify which tactics are working – be it a pricing and distribution strategy or marketing promotions, so you can double down on them, or adjust what isn’t working.

A Business intelligence tool helps to monitor those important KPIs and the property’s revenue performance. In addition to the traditional Occupancy, ADR, and RevPAR - an effective business intelligence tool allows for the analysis of other metrics like Length of Stay, displacement, lead-time, cost/benefit, and many others.

Business Intelligence solutions are powerful because they combine reservation level data, PMS data, and other sources such as the revenue management system (RMS)  allowing users to gain insight into revenue-generating opportunities that allow even greater personalized offers and insights for upselling and promotions. 

It means that hoteliers can be even more flexible to market changes, and act with speed and confidence as they implement strategies that are targeted across a wide range of indicators which could include rate codes, distribution channels, and room types – with the ultimate goal of driving further revenue.

A business intelligence tool can act as a “single source of truth” and can become the rallying point for weekly strategy meetings where Revenue and Marketing evaluate the effectiveness of their revenue and marketing strategies, and come up with new innovative strategies for the future.

Conclusion 

Within the hospitality industry, the lines continue to blur between hotel marketing and revenue management as these disciplines increasingly continue to fall under the umbrella of “commercial strategy” within organizations. It’s more common now than ever for marketing and revenue management to work closely together, so hoteliers should look for every opportunity to increase collaboration between these two departments and provide them with the commercial strategy tools they need to uncover all possible opportunities.