As I said, at the beginning of this series about Revenue Management. To me, Revenue Management is a combination of:

1) Strategic Marketing: Marketing Research, define the segment, build/use and try to manage the chain of value, playing with the 4P’s…

2) Strategic Finance: Segments Accountancy, RevPar, GopPar, RevPaSH (Revenues per available SEAT and HOUR when we focus our attention on increasing revenues and PROFIT in restaurants) and…

3) Web Engineering:

Web 2.0: Which thanks to Syndication We have “Channel Managers” systems who manages rates and availability for all distributors from one single system user interface.

Web-Scraping: Which allows us to compare prices (Insiders like to call the software that able to do that “Shoppers”) and establish /assess our on-line reputation as we saw here and now…

The Real-Time web… Real-Time web is another tool for chains of value willing to work as a single entities OR as a complex system as we describe here.

The other day, We talked about Real-Time web for Touristologists. We saw two interesting examples showing how tourism enterprises and destinations can make the most of instant and fast-update communications between all the members of a chain of value and the tourists to whom, they aim to gain their trust and add value from the beginning to the end of the trip.

Of course, Hotels and any lodging facility can use those ideas as well, but here in this post I would like to offer a customized example for Revenue Managers.

Jordi! How can you relate Real-Time Web to the daily task (short vision) of a Revenue Manager?


Good question Touristologists! Let’s see if I am able to convey my vision…

A hot topic today in Revenue Management is how to increase revenues (AND profits We Touristologistly add!!!) for every single customer. Here it’s a must to talk about ancillary and upselling services.

For starters, let’s provide a clear and, an arguable, good definition of ancillary and upselling services:

Ancillary (or auxiliary) products are close to the definition of cross-selling in CRM (Customer Relationship Management) I mean other services that can be a good complement to the services the customer had already bought or it’s about to buy. A case in point could be… are you here in my hotel to assist a seminar about how to apply Real-Time web in Revenue Management? What about an on-line seminar before going to the conference? What about an aspirin and a massage after the seminar (just kidding!!!)?

On the other hand, upselling services is all about offering upgrades to the same service the customer had already bought or it’s about to buy. A better room, a better view… a complimentary Internet access…

It’s worth mentioning (and good to highlight!!!) that both ancillary and upselling services…

1) Can be related to services of the hotel AND any service from any member of the chain of value. We are a system, remember?

2) In order to be effective, they have to be as customized as they can be. Not any upgrade… but the one which fits the customer’s needs!

So, We have a Hotel practicing the science and art of Revenue Management. They know that in order to make the most of up-selling and ancillary products, they have to customize their offers. Their Data is saying that the most appreciated up-sellings are, to be upgraded to a king suite, follow by a late check-out and/or early check-in, also to be upgraded to a higher floor with better views.

Thanks to their CRM, Loyalty programs and Social Networking Sites activities they know which one is the favorite one, NOT for the average customer but for each of them. They also can play the game of different “versions of ME”.

So, We have the knowledge and thanks to the Real-Time web We are able to send this customized offer right here / right now. For instance, through the mobile at the moment He/She is doing the reservation!

Maybe this is also a good moment to make a suggestion for a gift (ancillary or upselling) to a loved one or a travel companion…

Maybe this is a good moment to help our customer to help us and himself… For instance, allowing him to create a group for a customized service and get a discount. Welcome to the pro-am era!

Some people will say that this is a good example of Big Data and Machine Learning. I agree! Just that I like to call it… Intelligent Systems in action powered by the Real-Time web!

Can you fulfill/developed these examples? Please, use as a base the short vision (see the picture above) of a Revenue Manager!

Ready for more? I strongly recommend you to read this article: Especially, the example provided by Jurgen Ortelee: “In his analysis for Pan Pacific hotels, convention customers paid similar room rates as corporate customers, on average, but because of the much higher propensity to rent meeting space and incur higher food/beverage charges, convention customers result in 60% higher profitability per room than corporate customers. As another example, the value of a wholesale customer, who is likely to pay among the lowest room rates, is valued more on a Total Revenue basis given his higher propensity to use hotel spa services”.

To me, it seems a good opportunity to apply our favorite tool: Segments accountancy, what else? Which will allow you to get better decisions. As I always said: Different segments, different margin… AND you must know it and act accordingly!!!

I like to finish this post with the video that I share in this tweet

Interesting mobile app Touristologists! But… Do you think we can improve it using Real-Time web technology and Business Model related to ancillary and upselling services?

Can you write down the technological scheme and describe how to use the Web 2.0 Business Model that we talked about here?

Can you highlight the features that will transform it into a web 3.0 mobile app?

Damm it! I began to write a post and I end up writing a Study Case. I can’t help it, I am a Touristologist builder! As I often say… “Michelangelo has his Sistine Chapel Ceiling; Leonardo has his Giaconda. I have my Touristologists!”