October 07, 2013

Integrating departmental analytics in hospitality marketing


When departmental activities are synchronized at the data and analytics level, not only are department decisions made considering the good of the enterprise, but you have the opportunity to apply analytics at a more strategic level.

In recent years, the revenue management and marketing department of hospitality organizations have been working much more collaboratively. The rise of internet distribution has created an increasingly competitive marketplace, and the appearance of new channels for marketing has not only provided opportunities for new methods of distributing promotions, but also provided access to more readily available customer data. By sharing of information and integration of departmental analytics, marketing and revenue management can improve how they manage, stimulate and control demand. For the purpose of this post, let’s first focus on the revenue management information and analytic outputs that could be useful for marketing. In the next post we will review the marketing information that can help inform revenue management decisions.

Marketers are responsible for the dual objectives of nurturing demand through brand image and identity, and for stimulating demand through more targeted actions. Promotions and offers can be used for both objectives, depending on how targeted they need to be. However, a marketing approach that leans too heavily on offers can have the impact of encouraging customers who make up the long-term demand to buy at a discount, otherwise known as “cannibalizing” demand. What if marketers could include information from revenue management such as demand forecasts, prevailing price, and occupancy forecasts? Would that help marketers to better balance these objectives?

We have seen that promotions placement can be much more effective when decisions are supplemented with information from revenue management. When marketers have ready access to demand and occupancy forecasts, they can place promotions and offers more productively. If marketers knew how many rooms were forecasted to be left unsold in advance, they can use marketing optimization techniques to make the right selection of customer segments and campaigns to stimulate the right amount of demand to sell the unfulfilled rooms at the right time and place.


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