Pricing at the speed of Uber

August 29, 2018
Anyone who has used a rideshare service such as Lyft or Uber has a story about big differences in ride fares, depending on the time or day they were traveling. And whether you call it surge, yield, demand, dynamic or time-based pricing, this pricing practice and strategy is seeing wider adoption across industries. That includes hospitality. In the face of increasing competition, including online travel agencies, hoteliers both large and small are quickly learning that traditional pricing strategies, such as Best Available Rate (BAR), won’t sustain them in the future. What’s more, today’s savvy consumers, especially millennials, expect price fluctuations or what we like to call price elasticity. The good news is that hotels have a lot of pricing flexibility because guest rooms are both perishable and have a fixed capacity. In a recent Smart Decision Guide to Hospitality Revenue Management, Starfleet Research provides a detailed look at how organizations can implement intelligent pricing, which is a the science of maximizing room occupancy at the best possible price. This pricing approach goes beyond the BAR, and analyzes demand forecasts, price sensitivities, guest behaviors (such as social media activity) and even weather forecasts. Information in gathered, managed, and distributed in real, or near-real, time. Intelligent pricing also includes a global look at all hotel operations. With demand for function spaces rising – along with prices - a system must be able to gather data across the facility, from event spaces to restaurants. Of course, bringing in data from a broad diversity of relevant sources can also lead to an overwhelming amount of information. That’s why a next generation revenue management system is not only nice to have, but necessary to manage this data influx and give users the specific information they need, when they need it. In looking to upgrade revenue management technology, hoteliers should be looking for a solution that: • allows revenue managers to work through mass amounts of data to focus their efforts on more strategic tasks • automates pricing and distribution decisions • Improves marketing and sales • Generates competitive intelligence that can be accessed by role, anytime • Provides insights into occupancy trends, guest demographics, market positing and channel profitability The recent Starfleet Research poll showed that 98 percent of hoteliers believe a next generation hospitality revenue management will propel their revenues and profits. As hoteliers (and vendors) rush to market to meet this need, it’s a good idea to review the guide before making one of your biggest, most important, investments in your facility’s future.Anyone who has used a rideshare service such as Lyft or Uber has a story about big differences in ride fares, depending on the time or day they were traveling. And whether you call it surge, yield, demand, dynamic or time-based pricing, this pricing practice and strategy is seeing wider adoption across industries.

That includes hospitality. In the face of increasing competition, including online travel agencies, hoteliers both large and small are quickly learning that traditional pricing strategies, such as Best Available Rate (BAR), won’t sustain them in the future.

What’s more, today’s savvy consumers, especially millennials, expect price fluctuations or what we like to call price elasticity. The good news is that hotels have a lot of pricing flexibility because guest rooms are both perishable and have a fixed capacity.

In a recent Smart Decision Guide to Hospitality Revenue Management, Starfleet Research provides a detailed look at how organizations can implement intelligent pricing, which is a the science of maximizing room occupancy at the best possible price. This pricing approach goes beyond the BAR, and analyzes demand forecasts, price sensitivities, guest behaviors (such as social media activity) and even weather forecasts. Information in gathered, managed, and distributed in real, or near-real, time.

Intelligent pricing also includes a global look at all hotel operations. With demand for function spaces rising – along with prices - a system must be able to gather data across the facility, from event spaces to restaurants. Of course, bringing in data from a broad diversity of relevant sources can also lead to an overwhelming amount of information. That’s why a next generation revenue management system is not only nice to have, but necessary to manage this data influx and give users the specific information they need, when they need it.

In looking to upgrade revenue management technology, hoteliers should be looking for a solution that:
• allows revenue managers to work through mass amounts of data to focus their efforts on more strategic tasks
• automates pricing and distribution decisions
• Improves marketing and sales
• Generates competitive intelligence that can be accessed by role, anytime
• Provides insights into occupancy trends, guest demographics, market positing and channel profitability

The recent Starfleet Research poll showed that 98 percent of hoteliers believe a next generation hospitality revenue management will propel their revenues and profits. As hoteliers (and vendors) rush to market to meet this need, it’s a good idea to review the guide before making one of your biggest, most important, investments in your facility’s future.
Filed Under
  • Cloud
  • Mobile
  • Technology
Industry
  • Hospitality
Region
  • North America
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