The Power Of Data Analytics on Hotel Revenue Management

by | May 20, 2021

Perhaps the dramatic outcome of the digital revolution is the data explosion. Data created a virtuous circle of data analysis and action, leading to new insights, data creation, and data analysis. In the massively data-driven modern world, investing in analytics has become the difference between successful and failing companies.

Even in the hospitality industry, the role of data science cannot be underestimated, especially if the savvy traveller is to make quick decisions and if the smart hotelier wants to forecast market occupancy, send price optimisation alerts and gain insights into clientele trends. The impact of data analytics on revenue management has led hoteliers and other hospitality providers to gain a competitive edge and helped them transform businesses by making data-driven decisions. If you have ever wondered how exactly these analytics can help drive the hotel’s revenue, keep scrolling to find out

Demand Forecasting

Data analytics make it easy to identify, differentiate, and recognise the patterns in each separate client group. In addition, they give a clear understanding of the market segments by providing a 360-degree customer view. Analysing guest behaviour and booking patterns and real-time data will then help hoteliers forecast demand with higher accuracy. Demand forecasting analysis is useful for revenue management, inventory management, and implementing dynamic pricing strategies.

Pricing Decisions

Pricing is one of the most critical factors determining whether a room is sold and if the hotel can generate a profit from that sale. Under-pricing and over-pricing can lead to either a loss in revenue or an increase in unsold rooms. Data analytics help hoteliers design pricing tactics by considering past patterns and competitor rates. The reports generated compare the hotel’s current pricing strategy with that of the competitors. This helps set the best price for each room with 24X7 dynamic pricing, thus increasing hotel bookings.

Channel Management

Hotels receive bookings from various channels such as online travel agencies (OTA), direct bookings, and website bookings. Data analytics in hotels looks at the different mediums to determine the volume of booking received from each channel. They can help a hotel identify which channel is performing well, the prices at which a particular room category is sold on different channels, the booking pace of each channel, seasonality of bookings, etc. Hoteliers can use this information to understand which channel yields the most bookings and which channel needs to be worked on. This data is vital to formulate the right marketing strategy that gives hotel bookings the right push on the relevant channels.

In addition to that, bookings come through corporate travellers and recurring guests. Certain hotels are heavily dependant on business travellers and have tailored their offering to such guests. Analysing the analytics will allow hotels to understand whether it is in fact these guests who are bringing in the revenue for the hotel. Data analytics can also allow hotels to determine whether their revenue is generated through new guests or through frequent guests. This in turn will point the hotel’s promotion expenditure in the right direction.

Apart from revenue management, data analytics is also the key to marketing strategy, building customer loyalty, and enhancing productivity. It helps understand the guest better and improve their experience, which, in turn, has a positive impact on revenue. It is a definite win-win when hoteliers leverage the power of data analytics. Check out IDS Next’s range of cloud-based solutions that consolidate and analyse large amounts of data gathered from internal and external sources to identify anomalies and patterns and help staff make better decisions.

Jacob K I | IDS NEXT


Jacob K I

Vice President - Business Development

He is responsible for developing growth strategy focused both on financial gain and customer satisfaction. He is also responsible for conducting research to identify new markets and customer needs.