Top Tips for Building a B2B Revenue Management Strategy for Hotels

“When implementing a B2B revenue management strategy for hotels, it’s important to focus on key principles. In the B2B segment, it’s better to have fewer clients and a wider network of providers. This means working with a smaller number of customers but having partnerships with various suppliers to offer a range of services.

The strategy differs from targeting individual customers (B2C). In B2B marketing, you need to use personalised approaches, like direct sales and industry-specific advertising. When it comes to pricing, B2B often involves negotiated contracts, volume discounts, and long-term agreements.

To succeed in B2B revenue management, follow these tips:

• Understand the specific needs of B2B clients and tailor your services accordingly.
• Build strong relationships with key industry partners to provide comprehensive offerings and stand out from competitors.
• Use a good customer relationship management (CRM) system to manage interactions, track client preferences, and improve customer satisfaction.
• Offer flexible pricing options, like negotiated contracts and customised packages.
• Provide excellent customer service to retain clients and build loyalty.”

“In an industry where direct booking volumes are growing rapidly, B2B sales are still one of the main sources of income for hotels. The key aspects to maximising profit from this source are:

• Pricing: The goal is to optimise revenue by adjusting prices to match the willingness of corporate clients to pay while considering the hotel’s overall revenue targets. This shall be done while making sure that OTAs and third parties do not offer better rates to the final customers than what you are offering on your own website.
• Inventory Management: Hotels need to allocate a certain portion of their inventory for B2B bookings while balancing it with other revenue channels, such as leisure travellers or individual bookings. It’s important to consider the cost of displacement here, i.e., to make sure that not too many or too few rooms are allocated or blocked for B2B sources.
• Channel Management: Losing control over your distribution can significantly damage your total revenue. That is why it’s really important to control inventory availability, rates, and restrictions across these channels, ensuring consistent pricing and availability information for potential clients.
• Data Analysis and Forecasting: By analysing historical data, market trends, and demand patterns, one can predict demand and adjust pricing and inventory allocations accordingly to maximise revenue from B2B transactions (linking it to the previous point about displacement).
• Relationship Management: Building and maintaining strong relationships with corporate clients and OTAs is vital for B2B revenue management. It’s a challenging ecosystem and having the right people in the right roles can make a substantial difference.”

“The main difference is the audience. B2C customers are looking for personalisation and a direct emotional connection with the hotel. B2B will ”open doors” via other businesses and their sophisticated post-sales marketing can create loyalty. It is important to understand both businesses and build the right channel mix.”

“When distributing your rooms, the “mantra” should be: distribute as much as you wish as long as you keep full control of your rates and inventory. Unfortunately, this often does not happen in the B2B onward distribution landscape and in many cases, hotels are challenged in the rate parity field for example. B2C distribution is generally much more transparent and under control – however, for a successful distribution, the same recommendation should be applied.”

“Make sure you have a clear understanding of how the client works. How will they sell your rooms and to whom? Is this a market you are not strong in selling yourselves? This will determine the kind of pricing they will get from you. Be careful with giving out fixed rates as they are a huge source of parity issues within the market. The only way this will work is if they sell outside your regular booking patterns, in closed circuits where the room rates cannot be retrieved. Always look for options where you can give out flexible rates, derived from your BAR, so you are sure that if the market drops/increases you are not stuck with the wrong rates.”

“Hotels implementing a B2B strategy should have a plan for volume discounting based on anticipated production. Use historical data where possible, but ultimately steeper discounts should only be given to clients presenting additional volumes of room nights over need periods. B2C is a significantly different dynamic where the individual is paying. They tend to prioritise value for money vs B2B that values consistency and ease.”