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Revenue Management and Customer Relationship Management

Use of Predictive Analytics Can Lead to a More Dynamic Customer Experience and Maximize Revenue
By Dr. Gabor Forgacs
May 2012

The theory and practice of customer relationship management (CRM) is a marketing field that has become more and more integrated with revenue maximization in recent years. The core concept of CRM is similar to the revenue management principle of identifying the highest-yield customers. It aims to generate more revenue through interacting with and engaging,  plus retaining customers.
Any CRM system helps answer important questions of interest to a revenue manager:
  • Who are my best customers?
  • Why are they my best customers?
  • How do I keep them?
  • How do I find more like them?
The process starts with data analysis to help identify those guests that a given hotel sees as having valuable revenue potential. By extracting information from the available data, revenue managers will be able to differentiate those groups who appear to be the best prospects for targeting. The next step is pattern detection and identifying how services and products could best be customized to cater to those patterns. At the execution stage, the value proposition has to be communicated to guests through the best suited channels.
The growth in data volume and data sources has created a demand for better business intelligence using CRM. Many companies try hard to assemble a coherent picture of the customer from scattered information located throughout the entire enterprise. Marketers cull demographic and behavioral data from various sources, but it has been a challenge to gain accurate attitudinal data. Predictive analytics has successfully taken on that challenge and contributed to an improvement in CRM in this regard.
Predictive analytics, a relatively new tool, can not only determine a customer's propensity to buy, it can also forecast whether a customer will respond to a specific marketing appeal within a given time frame. Despite exponential growth in the quantity of data available, businesses can still achieve insight by making strategic decisions based on the quality of analysis. Predictive analytics is a growing field that has already led to a more dynamic customer experience by building on CRM and helping to maximize revenue potential at customer touch points.

This is an excerpt from “Revenue Management: Maximizing Revenue in Hospitality Operations,” published by the American Hotel & Lodging Educational Institute (EI).  For information or to order, visit or call  800-752-4567 or 517-372 8800. 
Outside the U.S. and Canada, please call 407-999-8100 .

Dr. Forgacs can be reached at


 Dr. Gabor Forgacs
Associate Professor
  Ted Rogers School of Hospitality and
Tourism Management
Toronto, Ontario, Canada.

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Also See: The Room Rate Conundrum: The Leap from Tactical to Strategic / Dr. Gabor Forgacs / April 2011

Revenue Management: Tactical Discounting / Dr. Gabor Forgacs / March 2010

Strategic Revenue Management / Dr. Gabor Forgacs / February 2010

Revenue Management: Dynamic Pricing / Dr. Gabor Forgacs / January 2010

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