With ongoing pressures from rising costs, shrinking profits, and the aftershocks of the pandemic, the way we approach pricing, technology, and data will be critical for success this year. Here’s my breakdown of what to expect in 2025 and strategies to navigate these challenges effectively.
Stabilizing revenue performance
The recovery from the pandemic has stabilized top-line revenue performance for many hotels, but this upward trend is expected to flatten in 2025. Rising costs and shrinking profits are also placing significant pressure on revenue management strategies.
As the market becomes more competitive, we’ll need to adopt commercial strategies to maintain profitability. The focus will shift from siloed strategies to alignment between marketing, sales, and revenue management to reduce the expenses and drive the revenues with the focus on profitability.
One of our main priorities this year will be driving direct bookings at retail pricing by targeting the right customers with the right offer to boost conversion rates.
The critical role of data
The most important data to leverage will be a “single source of truth.” This means that all departments within a hotel — from marketing to operations — must align around the same KPIs. With a shared understanding of key metrics, you can execute more aligned strategies, ensuring consistency across commercial efforts.
Revenue managers will need to focus on a select few KPIs that can drive meaningful change. While the number of KPIs to track may vary by property, narrowing it down to around three key metrics will help maintain clarity and agility.
Technology integration challenges for independent properties
One of the biggest challenges independent properties face is the lack of integrated technology. Many have disparate systems to manage data, inventory, and pricing. This situation leads to inefficiencies, adds complexity to revenue management strategies, and consumes valuable time.
Even with investments in new technology, achieving seamless compatibility remains a hurdle, making it difficult to streamline operations and limiting decision making.
Staying ahead
Revenue management this year will be shaped by a combination of direct channel growth strategies, technology investment, and data centralization. Tackling these core areas head on will allow you to thrive in an increasingly competitive market.
