SOURCE: Aberdeen Group

Aberdeen Group

September 08, 2010 11:11 ET

Revenue Risks at the Heart of Revenue Management in Hospitality

BOSTON, MA--(Marketwire - September 8, 2010) -  The top revenue management associated business pressure facing hospitality executives today is the need to ensure continued growth and expansion, according to the Aberdeen Group report Hospitality Revenue Management: Minimizing Risks and Maximizing Margins. Aberdeen Group, a Harte-Hanks Company (NYSE: HHS), surveyed 80 retail organizations to determine the current state of revenue management in hospitality.

"With the proliferation of the online channel and comparison websites, hotels and resorts need to find ways to attract customers short of simply offering the lowest price. Customers, in turn, are looking for more out of their travel experience, with specific criteria depending on the type of travel. Hotels and resorts must find that critical balance between pricing and service to ensure occupancy as well as profit margin," says Chris Cunnane, primary author and senior research associate, Aberdeen.

In response to this pressure, hospitality organizations indicated plans for improving inventory planning and allocation. "By improving inventory planning and allocation, organizations are able to better service the customer while lowering their inventory holding costs. This includes room availability and inventory levels of items at gift shops, restaurants, room service, and business centers," states Sahir Anand, co-author and research director, Aberdeen.

The top technology enabler currently in use by hotels and resorts is a revenue management tool or application. "With pricing becoming more transparent than ever, thanks to third party booking engines, organizations need to maintain a safety stock of reservation availability to be charged at higher rates to mitigate the low margin sales from these third-party agencies. Optimizing the organization's pricing strategy is the first step in revenue management success," says Cunnane.

To improve revenue management performance, Aberdeen data has shown that hotels and resorts must make informed and educated decisions regarding their revenue forecasting. Aberdeen recommends the following actions for performance improvement:

  • Utilize Business Intelligence (BI) dashboards for real-time revenue performance reporting
  • Implement a revenue optimization solution to maximize return
  • Implement a central reservation system

All of the above requirements, amongst others, are part of the winning strategy for revenue management.

A complimentary copy of this report is made available due in part by the following underwriters: Infor SoftBrands and Microsoft. To obtain a complimentary copy of the report, visit:

Visit for additional access to complimentary Retail Research.

About Aberdeen Group, a Harte-Hanks Company
Aberdeen provides fact-based research and market intelligence that delivers demonstrable results. Having queried more than 30,000 companies in the past two years, Aberdeen is positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748.

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