Integrating Digitization in Revenue Management

Kremena Matzelle is a seasoned professional with extensive experience in the hospitality industry. Her hospitality journey began in 1999 as a Front desk agent at a destination resort. Finding her passion in the hotel business, she continued to pursue her career through various positions in operations with full-service properties in Chicago, as well as multiple roles in Revenue Management with TMI Hospitality (now part of Aimbridge Hospitality) and Vision Hospitality Group. In her role as Revenue Strategy Director, she was responsible for the financial performance and revenue maximization for an assigned region of 45 hotels, consisting of six different brands.

In an exclusive interview with Travel and Hospitality Tech Outlook, Matzelle shared her invaluable insights regarding the transformations taking place within the industry, the prevailing challenges along with possible solutions.

What are some recent advancement in revenue management that are expected to significantly influence the challenges you encounter in meeting your business requirements?

The rapid adoption of technology is transforming the revenue management day-to-day processes as we see automation moving well beyond pricing strategy and inventory controls. The evolution of the revenue management platforms and market dynamics necessitates revenue managers transitioning into technologically savvy strategists who understand the digital space. This shift demands revenue managers to oversee a smaller cluster of hotels and utilize additional support roles, which presents staffing challenges and could increase overhead costs further. Despite these challenges, revenue management professionals view it positively, finding the role more exciting now than a decade ago. The evolving role of a revenue manager is evident in the changing job descriptions since 2010, with storytelling becoming a significant component.

Many brands are transitioning to cloud-based solutions for revenue management, requiring ongoing learning and training to boost efficiency and speed the adoption of the new system’s capabilities. While this presents challenges by allocating more hours to training, it also enables faster testing and pivot to new technologies to help shape the revenue management trajectory. Adaptability and continuous learning emerge as critical factors for future success in Revenue Management. 

Could you discuss any recent projects that you were involved in, along with your roles and responsibilities and the experiences that you had?

Our team prioritizes efficiency and explores innovative approaches to boost top-line revenue. Recognizing the value of automation in streamlining administrative tasks, we aim to focus on more impactful activities. Although we are not the early adopters of partial or complete automation, we believe in this growing trend and its impact on the hospitality industry. For instance, we have experimented with an AI solution to generate recaps and action items after strategy calls, relieving the team from the burden of note-taking during discussions. This enhances focus during calls and improves communication across sales, operations and revenue management teams. 

The prevalence of AI-driven technology and automation is a prominent topic in industry discussions, with ongoing conversations expected in the coming decade. Investment in new technology will inevitably shift the debate towards budgeting for additional funds for training and support. AI solutions will reshape our role, providing more reliable forecasts, improving accuracy, and will allow us to explore and integrate better the customer behavior and needs while also improving profitability for the hotels within all outlets. I believe all these changes will be beneficial for our team and will help catapult the Revenue Managers further in the organization as a key role when discussing financial results and including them in cross-departmental collaborations.

What are some of the prevailing challenges that you face within your organization?

Our operational efficiency relies heavily on advanced revenue management systems featuring intricate algorithms for precise revenue and demand forecasting. However, it is crucial to note that current systems implemented by the big brands focus on optimal rates and demand within a traditional profitability model, not considering guest expectations and external factors.

The industry pacesetters emphasize on the importance of shifting from room centric revenue management to guest-centric revenue management, reflecting changing guest preferences, particularly post-COVID. Despite the industry's awareness, current systems need help to fully capture the potential of this holistic change. The evolving landscape demands tools that enable customization, including personalized experiences, merchandising, and expanded package offerings. Although strides are being made in developing new products to address these gaps, finding a comprehensive solution would require some time. 

The evolution of the booking process, with customers relying on reviews and multiple channels, highlights the importance of incorporating reputation scores into data analytics and pricing recommendations. This shift necessitates revenue managers to align strategies with guest behavior and preferences, emphasizing a change in mindset alongside system advancements. 

What is your advice to fellow peers and colleagues in the industry?

I strongly advocate for implementing value-based pricing rather than replicating a comp set strategy reactively. It is essential to comprehend the market and capitalize on each hotel's distinctive amenities to enhance the guest experience. The trend of value-based pricing is evident in lifestyle hotels, and I believe we should actively encourage its adoption in Select-Service hotels. Those teams who adopt a value-based pricing and provide unique and memorable experiences to guests tend to achieve notable increases in ADR (average daily rate). This is a trend that we should explore further.