6% revenue growth predicted for AP hotel sector in 2016

6% revenue growth predicted for AP hotel sector in 2016

Summit of hotel professionals indicates oversupply and new competition is an ongoing concern

Summit of hotel professionals indicates oversupply and new competition is an ongoing concern

Driving Hotel Revenue Indonesia Summit 2016

A summit of over 200 Indonesian hospitality industry professionals has predicted a positive outlook for the regional hotel sector, with 65 percent of attendees forecasting six percent or more revenue growth in the year to come.

The ‘Driving Hotel Revenue Indonesia Summit 2016,’ organised by IDeaS Revenue Solutions, drew together leading hotel owners, general managers, revenue managers and sales directors from across Indonesia to discuss and share best practices of hotel revenue management and distribution.

While healthy revenue growth is expected from the regional hotel sector, according to almost half of the summit attendees, hoteliers also face significant challenges from increased supply coming into the market.

Locally, increased competition remains a primary concern for the Indonesian hotel sector, while terror alerts were predicted to have minimum impact on growth – a sentiment shared by more than 50 percent of event delegates.

Rachel Grier, managing director Asia Pacific for IDeaS, said: “With increasing competition and supply being clearly identified as a key challenge for hoteliers, the approach should be to avoid aggressive discounting to stimulate short-term demand. Instead, hotels should focus on defining products that target specific customers and maximise the guest experience.

“Integral to this is managing their online reputations and pricing themselves accurately to attract the right business from the right segment. Every price and promotion strategy should be carefully planned and monitored. Impulsive pricing decisions must be replaced with strategic, data-driven and consistent decisions.”

Increased investments in food and beverage services and function space optimisation were identified as the next big revenue streams for the regional hotel sector. Sixty-five percent of respondents had said food and beverage would be a leading contributor to growing hotel revenues in the coming year.

Over 97 percent of respondents said revenue management was considered ‘very important’ when planning overall revenue growth from all hotel departments.

Bilal Chamsine, executive director for DCA Hotels & Resorts Group, said: “Revenue management is critical to a hotel’s success. Having the right strategies and systems in place to determine the best rate for target customers at any given time is extremely important.

“This is not only important for revenue managers but also for other departments. Even asset owners should understand the principles of revenue management and build up a culture that drives the bottom line.”

Although revenue management was considered an important factor, it didn’t come without its challenges. The summit also looked at key challenges faced by revenue managers. Forty-eight percent of attendees reported that ‘setting the optimal price’ was a top challenge and 44 percent indicated that getting accurate data was a hurdle in the revenue management process.

 

Simon Willmore
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Simon Willmore
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