3 Questions Advanced Revenue Management Solutions Can Help Hospitality Businesses Answer
One of the great pains of revenue management in past eras has been the uncertainty factor. Historically, market trends and factors that affect how hospitality businesses stay competitive was a bit more of a guessing game, with levels of visibility leaving a lot to be desired. For some, it still is a pretty uncertain area. But these days, thanks to AI-driven functionality, the ability that organizations now have at their disposal to more accurately remove that uncertainty factor is a core function to true cloud revenue management solutions.
But what about some of the specifics? What questions can true cloud-based revenue management solutions help a hospitality organization answer? How does addressing these areas help them maximize revenues and stay on track in terms of profitability? Let’s take a look at three important areas that help to illustrate how the right solutions can help hoteliers achieve greater successes in revenue management.
1. How much should a room rate be increased or decreased?
Because the multiple ways that offerings are presented to prospects, setting competitive pricing has become more involved and much more fast-paced, too. To stay in the game, hoteliers need to increase maneuverability around pricing, the optimal rate of which changes multiple times a day. That’s not easy to do manually. So, what’s the answer? This is a question that advanced revenue management solutions help hospitality organizations address, specifically because the right solutions build AI-driven functionality into the mix.
Because pricing changes so often even within a 24-hour period, the best way to keep pace is to have a solution in place that automates the process against relevant factors like star ratings, room types (more on that in a minute!), discounts and incentives, time of year, geographical considerations, and other factors that affect what the pricing should be. With a more informed benchmark set for pricing, and with real business data and competitive factors taken into consideration, automating the process with solutions that incorporates AI functionality helps to remove that uncertainty factor and allow hotel businesses to concentrate time and energy on other more directly guest-centric efforts.
2. How should KPIs be set?
One thing that’s become more of an emphasis to staying competitive and profitable for hotel businesses is maximizing the use of a property beyond just filling guest rooms. Every square foot or meter counts. With that in mind, another factor that an advanced revenue management solution helps hospitality organizations address is how to set the right KPIs to best measure success when strategizing around various room types, and what success is supposed to look like as applied to guest rooms and meeting rooms.
Pricing a guest room presents a different set of variables to pricing a meeting room, for instance. Time of day, event duration, and occupancy capacity are all important differentiators. With function spaces, there is room for greater flexibility as the total square footage can be divided, appropriate to the kinds of events held there, with multiple events potentially happening at the same time. In any case, establishing benchmarks using real business data and applying AI-driven forecasting models help decision-makers to see what levers affect the best results really helps to clarify how organizations measure success.
3. How can market trends be more easily predicted?
How long will a trend last; short term or long? What factors are affecting that trend? Is there a seasonal factor at work here somehow? All of these questions roll up into this bigger one; how can hoteliers gain more precise insights on where the market is going earlier in the process? When shopping for advanced revenue management solutions, the capacity a given solution has for accurate reporting based on a multitude of options supported by a dynamic forecasting engine should be top of the list to help address this question. What does that look like?
Accurate and complete reporting is at the heart of the answer to this important question. By extension, so is integration with other solutions like advanced analytics solutions, PMS, and point of sale. When hotel businesses can easily pull in data from various sources, they can also provide greater strategic clarity on what has happened, what’s happening, and what is likely to happen in the future. When an organization has a clearer understanding of their own data, it becomes far easier to anticipate how to build a strategy against where the market is going.
Taking revenue management to the next level
With investment in the right revenue management solutions, and with that point about integration firmly in mind, what other factors are at work that hospitality organizations need to know about? What role does an advanced revenue management solution play in creating efficient processes to help ensure profitability? How must organization plan investment around revenue management solutions to help them adapt as the industry evolves?
Partnering with hospitality industry experts Starfleet Research, we’ve created a valuable and detailed resource that outlines the value of true cloud revenue management to help organizations to address these questions.
You can get your copy of that resource right here.
- EzRMS Hotel Revenue Management Software