Is Automation In Revenue Management The Need Of The Hour?
The answer is – an unequivocal YES, as hotel revenue management is not an easy task therefore automation in revenue management is the need of the hour. Whether it is a small independent hotel, chain hotel, resort, or any hospitality property irrespective of star ratings and locations, revenue managers face many challenges while configuring and implementing the right strategy. Apart from hands-on expertise, they need to rely on massive data points from various hotel operations/departments sources to set up the correct pricing at the right time for the right guest. That’s why an automated hotel revenue management system should be front and center when optimizing your hotel revenue is in your mind.
Significance of automation in revenue management
A new-age, fully-automated hotel revenue management solution leverages the power of business intelligence to learn about many vital aspects, including guests, market trend, seasonality, special events, demand forecast, competitor pricing, and calculates elasticity. Then it lets you (your revenue managers) determine the most profitable room rate. It automates the process of using data analytics to maximize occupancy at the best possible price. Moreover, it can suggest rate changes in response to many factors in real-time, round the year.
How does it help?
Provides in-depth intelligence
Without an automated hotel revenue management system, your revenue managers will have to make decisions based on pure guesswork. With uncertainty around what segment of guests will flock to your city for a specific mega event, their pricing preferences, and competition rates, it would be challenging to develop the right pricing strategy.
However, an automated revenue management solution helps you save time spent on manually collecting and analyzing the vast amount of critical data. It examines historical/market data, combines the same with the predicted demand, looks at how your competitions will price their rooms, and recommends rates for each segment and room type. This whole process ensures consistency with zero guesswork while improving your overall productivity. In simple words, the system does all the heavy lifting and becomes your powerful decision-support system.
Sets room rates dynamically
This is all about managing a certain number of available rooms to maximize revenue by dynamically controlling the price of available rooms. Or you can say that this is the process of changing room rates in real-time based on demand and supply at any given point of time, ultimately to get more out of the room revenue. Now here, too, automation plays a significant role. It captures and processes a wide variety of data, including competitor rates, cancellation rates, expected no-shows, and many others, to adjust your rates in both high- and low-demand seasons. The idea here is to help you witness increased RevPAR by setting optimum rates for your rooms.
Helps employing length-of-stay based room pricing
Let’s assume Thursdays are low-demand days. An automated revenue management solution suggests the correct rate for Wednesday night and makes the package a little more attractive for your guest. Now with such a great deal, don’t you think that your guests will love to spend two nights at your property, rather than just one?
The system also suggests the ideal rate when you plan to implement a longer length-of-stay strategy, especially during busy days. It lets you know that it is beneficial to accept booking for four nights instead of one when you don’t have many rooms left.
The best part is that an intelligent revenue management system tracks how your competitors price their rooms while implementing a length of stay strategy. This provides you with tons of critical information to make the right decision at the right time.
Automation in hotel revenue management system helps you maximize your revenue with precision and agility. It empowers your revenue managers to formulate efficient revenue management strategies based on accurate forecasting.
Before we sign off, let’s sum up the benefits of an automated revenue management system –
- Helps you gain the market, guest, sales & marketing, and competitor insights
- Predicts arrivals, cancellations, no shows, and occupancy, and many other critical aspects
- Assists with smarter and real-time pricing decisions with less time
- Recognizes and recommends new revenue opportunities
- And in the end, it enhances revenue and profitability
If you have not adopted one yet, then it’s now time to take the right first step.