Wednesday 19 July 2017

Hotels make strides measuring ancillary revenues

Measurement of ancillary revenue streams is up across the board according to the new Aggregating Data Streams for More Effective Revenue Management report from EyeforTravel, which is free to download now.



As part of the report revenue managers were asked in both 2014 and 2017 “which of the following ancillary revenues can your revenue management system account for?” The findings show that in every single ancillary stream category measurement has risen and the number who reported that their system could not account for any ancillary revenues fell from 22.8% to 16.7%.

In 2014, food and beverage was the most measured type of ancillary revenue but that has now been overtaken by room and service upgrades, at 43.8% of respondents, and Meetings, Incentives, Conferences & Exhibitions (MICE) at 45.8%. In both categories the percentage of systems measuring revenues increased by more than 10%. Even more dramatically, the measurement of tours, experiences and packages more than doubled, pointing to this revenue stream being recognized by hotel management as an important revenue stream and service for customers.

Overall, every revenue stream was now being measured by revenue management systems to a greater degree than in 2014. The percentage of managers who reported that their system could not account for any of the revenue streams we asked about also fell from 22.8% to 16.7% of respondents, demonstrating substantial progress in monitoring and quantifying ancillary revenues.

However, there was no type of ancillary reported as being measured by more than 50% of respondents, pointing to there still being some way to go.

“It is encouraging that progress is being made but we would probably have expected it to be slightly faster than what we have found,” said Alex Hadwick, Head of Research at EyeforTravel. “We also asked revenue managers whether they felt they had the tools to do the job effectively and 71% said they did not, so it seems there are still technical and investment roadblocks. Removing these will be vital to hotels achieving their full potential revenue potential."

Click here to download the research now and get the full report, including:

  • The effect of competitors on pricing, how to account for them and what strategies to take to get a competitive edge.
  • Understanding and constructing predictive analytics.
  • Understanding the costs of a business’s channel mix and how to win direct bookings.
  • The state of the industry’s approach to ancillary revenues.
  • The key metrics every revenue manager should be working toward.
  • The future of a revenue manager’s role and the skills they will require.