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Revenue management is a management process to achieve the price according to supply and demand. Knowing the different indicators can become key to improve the productivity and revenue of our business.
In addition, we will be able to connect with our target audience, knowing their tastes and needs and offering them the best option.
Revenue management is one of the processes that is becoming very relevant in the tourism sector, improving the relationship between customer and company and increasing revenues considerably.
Revenue management is a management process that manages to set the price according to the supply and demand of a given product or service, also taking into account the available stock.
The main objective of this process is to connect with the right customer at the right time and through the best available sales channel.
Revenue management is possible thanks to the use of analysis tools in order to cross-check the data obtained and achieve maximum optimization of sales and therefore also profit.
This process is very common in the tourism sector as it greatly facilitates the booking of rooms as well as other management processes that are maximized thanks to revenue management.
In order to fully understand this process, it is essential to take into account various indicators:
These terms are fundamental when it comes to understanding revenue management, as they all help us to understand how it works and how we can get the most out of data obtained.
Another of the most important points is to know what factors must be in place in order to use revenue management. These are:
One of the main benefits of revenue management is the possibility of forecasting demand in order to better adjust to customer needs and improve responsiveness to the different changes that may occur.
To this end, it is essential to know the different steps involved in this cyclical process.
Data collection
The first step is to collect all the data that will be useful in achieving our objectives. Among these, demand, price and inventory must always be present.
Segmentation
In the case of revenue management, one of the fundamental steps is market segmentation in order to set prices and maximize revenue by knowing our target audience in the best possible way.
Forecast
After knowing our target audience and obtaining all the necessary data, forecasts of demand, inventory and market share are made.
Optimization
With all the data obtained, a thorough analysis is performed in order to set the right price for the right customer, at the right time and through the right channel.
Continuous evaluation of results
Once we have achieved our goal in the optimization phase, it is necessary to collect all the necessary data again, knowing the information from the previous period and improving in decision making.
Price optimization
As mentioned above, the second phase of the process involves segmentation. In this type of strategy, the aim is to offer each type of customer the product at the most appropriate price for them.
Through a good segmentation strategy, we will be able to optimize our profit by offering different prices depending on the type of customer.
Timing
Pricing strategy can also be based on seasonality. For example, in the case of the tourism sector, the periods of highest demand are both summer and Easter, so it is possible to increase prices on these key dates.
However, in times of lower demand, the price we offer will have to be much lower since we must capture the attention of our consumers.
In the tourism sector, the emergence of revenue management has generated numerous benefits.
Through the use of revenue management, we can optimize profits by adapting our offer to the available demand, increasing our revenue and connecting with our target audience in the best possible way.
Working procedures can also be improved thanks to revenue management. Revenue management can improve the development of all processes, thus increasing productivity and improving performance.
Revenue management allows us to get to know our customers closely, understanding their needs and improving our offer.
Through the analysis of the different data we will be able to know closely the preferences of our customers as well as the way in which they act in order to determine the offer to be made.