Revenue Optimisation Tool by Accovia

Hubiz Revenue Management, an Accovia Solution for an Optimized Revenue Management Policy

1. What is revenue management?

Revenue management consists of:

• Controlling the risk of having unsold inventory and selling it at a price which is nonprofitable/suboptimal (anticipation of critical situations, harmonization of discrepant inventories, etc.)
• Dynamically adapting supply to market constraints and demands (B2B, B2C, etc.) in order to maximize margins and revenue

Revenue management is based on the principle of ideal pick-up through the sale of:

To establish a revenue management policy, a company must follow these four basic steps:

Step 1: Move from supply-oriented marketing to demand-oriented marketing; in other words, refine customer segments for full margins optimization.

Step 2: Set yield management (pricing modulation) practices with optimized inventory management.

Step 3: Optimize the various distribution channels through an integrated platform enabling on-line and off-line B2B and B2C distribution in a dynamic and synchronized manner for all services offered.

Step 4: Adopt a comprehensive approach to company management and involve everyone concerned to ensure an optimized return on investment (task automation for reduced production costs). This is also an opportunity for your company to save significantly.

2. How can Hubiz Revenue Management provide solutions to help you set up a revenue management policy?

Accovia and Méréo have collaborated to create Hubiz Revenue Management (Hubiz RM), a solution designed to help your business establish a sound revenue management strategy.

Hubiz RM is a revenue management system (RMS) aimed at helping your company forecast and produce an ideal pick-up curve; in other words, the purpose of Hubiz RM is to stimulate demand in order to reach maximum capacity and attract the most profitable customer segments possible.

Below is a step-by-step breakdown of how Hubiz RM serves revenue management policy establishment.

• Step 1: Customer Segmentation for a Customized Product Offering

Because revenue management takes into account the various customer segments which comprise a company's market, it allows a company to better capitalize on opportunities. A service company which offers set prices is wasting an opportunity to charge higher rates to non-price-sensitive or less price-sensitive customers; it is also squandering an opportunity for higher margins during high-demand periods.

Hubiz RM optimizes the placement of demands based on their segmentation and the associated margins, while maximizing customer satisfaction. It assesses customer profitability according to the corresponding market share and potential, selects the most profitable customers, and ensures optimal allocation.

Hubiz RM gives you a greater understanding of your customers, allowing you to predict their behaviour and make strategic decisions in order to optimize both sales and customer satisfaction.

To illustrate the above, for example, Hubiz RM includes GROUPS QUOTATION, a unique customer segment optimization module. This module processes a given group's demand, estimates its corresponding contribution, and generates a more profitable COUNTER OFFER which is just as satisfying for the customer.

• Step 2: Inventory Management and Yield Optimization

The principle of price elasticity makes it possible to adapt available inventory to fluctuating demand, which increases the profitability of your product offering. This profitability is the result of differentiated pricing based on date of sale, service sold, and customer category; this makes it possible to optimize inventory yield.

Prompt and effective reaction to an ever-evolving and ever-fluctuating market requires dynamic forecasting of demand, which facilitates proactive corrective measures. For this, demand must be anticipated daily based on careful analysis.

This is where Hubiz RM comes into play. It enables forecasting, alerts you to sub-optimal situations, and makes daily recommendations against  previous sales, current sales, and future demand. An integrated rules language allows Hubiz RM to adapt quickly and easily to your business environment in order to dynamically optimize your pricing according to its occupancy forecasts and market monitoring.

For example, Hubiz RM forecasts, alerts and recommendations help you to manage issues like allocation and overbooking rates.

• Step 3: Distribution Channel Optimization

Today, the diversification of distribution channels (such as the Internet, for example) forces companies to ensure optimal channel-management if they wish to remain competitive.

Hubiz RM's ready-to-use indicators make it possible to monitor and guide your key activities in real time; examples of these activities include inventory and distribution management, pricing, forecasting, and customer profitability analysis. Automated business processes let you respond effectively and proactively to market developments and fluctuations, even with regard to channels as variable as the Internet.

Hubiz RM processes information dynamically, helping you to make decisions under the best circumstances possible and ensuring competitive decision-making timeframes.

• Step 4: A Comprehensive Approach to Your Company's Revenue Management

Because this solution is so easy to use, return on investment is quick. Since various departments can access it for daily operations management, Hubiz RM involves almost everyone in your company. It enhances sales management and optimizes the value chain from the start (contract negotiation, and budget preparation, for example).

In terms of business performance evaluation, Hubiz RM provides tools to implement a new model of incentive and remuneration for sales-staff. This model is no longer based on the sales figure achieved, but rather on contracts' contribution and margins. This aligns your salespeople's interests with the company's interests, ensuring both quantitative and qualitative objectives with remunerative sales.

Conclusion

Revenue management has become an essential practice for any tourism professional wishing to remain competitive and to optimize revenue.

Hubiz RM lets you sell the right product at the right price, at the right time, and to the right customer, optimizing your revenue and your margins.