Rethinking the hotel tech stack for optimal revenue optimization

optimal revenue optimizationWhen it comes to revenue management, every hotelier needs to ask themselves – who owns your rates? This issue of rate ownership has taken center stage, as the pandemic shifted booking patterns for hotels in ways that make it crucial for hoteliers to be in complete control of setting their own rates – and not at the mercy of channel partners.

During the earliest stages of the COVID-19 pandemic, customers felt more confidence booking directly through the property’s own website. Now that travel has rebounded, another shift has taken place, and booking engines are again neck and neck with channel managers as a top source of bookings. While the GDS’ share is still much lower than it was, that’s expected to grow as business travel recovers.

Even so, the shift towards bookings has implications for how hotels allocate their inventory and optimize their rates across channels. Successful revenue optimization requires a complete understanding of search and booking data, which then offers opportunities to strengthen engagement with travelers.

What do hotels need to prioritize right now to optimize revenues and maintain peak profitability?

  • Duetto Trends Banner
  • eHotelier Essentials Banner
  • APN Solutions Banner

The shift in systems

While PMS was once the go-to source for revenue management, it can only show you part of the picture. Fully understanding and optimizing your search and booking data is critical for driving revenue and strengthening engagement with travelers.

However, that’s easier said than done, given the three core challenges facing revenue management today: manual processes, fragmented data and inaccurate forecasts.

Overcoming these challenges – and taking complete control of rate setting – requires a single system with a holistic view across a hotel’s entire ecosystem. The ideal cross-functional tech stack has two components. First there’s the Revenue Management System (RMS), which supercharges profit from every segment with a total revenue management approach. Next, there’s the Central Reservation System (CRS), which optimizes demand across all distribution channels with intelligent rate setting and inventory management.

Deployed together in a single interconnected system, this technology duo seamlessly integrates rates, customer profiles and real-time demand data to efficiently optimize revenues with fewer errors, processes and inaccuracies.

RMS and CRS: The power of interconnectivity

In legacy systems, rate setting has typically been done at the property level within the Property Management System (PMS). But there’s a major issue with this approach: each time you build a rate in the PMS at the property level, you have to update it across all properties.

So, if you’ve got six properties, you’ll manually build that rate across each property, duplicating efforts and leaving room for errors. It’s also time consuming, which discourages more nuanced rate setting in favor of blanket segments that aren’t optimized for dynamic factors, such as demand, loyalty or a guest’s willingness to pay.

It’s that last piece that really shapes the future of revenue management: rather than force revenue managers into an inflexible, frustrating workflow prone to errors, it’s time to rethink where rates fit into the hotel tech stack.

So where exactly should rates live in the hotel tech stack?

In this new approach, rates live in the CRS, which is then connected directly to the RMS. So that way, rates are only loaded in a single place. With those rates, your CRS can leverage intelligent rate management tools to strengthen direct bookings and more effectively manage your inventory across channels.

And, since the CRS is where reservations and distribution are also managed, it creates a powerful feedback loop that eliminates time-consuming manual processes and reduces errors based on inaccurate data. It also more effectively optimizes revenues, as the RMS uses dynamic pricing based on inputs from the CRS to optimize total profit and unlock the true revenue potential in every booking.

Most importantly, flexible APIs and integrations provide the flexibility to adapt distribution strategies based on shifting priorities while also ensuring that the ideal rates are being distributed in the right channels.

In addition to the benefits explored above, there is another major bonus to greater interconnectivity between the RMS and the CRS: better business reviews and new performance metrics for hotels. These new metrics emerge from the ability to surface new insights thanks to interconnectivity. For instance, we can share CRS data, such as searches, with the RMS. This sync is done in real time, which wasn’t possible when only seeing guest behavior once a booking had been made.

What’s next for total revenue optimization

The complexities of revenue management are especially acute for larger properties and multi-property organizations. These groups benefit greatly from a single source of truth for data, presented in a single dashboard across all departments.

Of course, there’s still a lot of work to do when it comes to integrating disparate systems and building the type of interconnectivity that drives better business outcomes. Investing in transformational change takes time and it takes agility.

To prepare for what’s next, start with a data audit; understanding how data is utilized today is the first step to knowing where that data analysis needs to be for future competitive advantage. We’ve all become data wranglers – and the better we get at pulling together disparate data into an actionable framework, the more successful we’ll be at achieving our goal of total revenue optimization.

Click here to learn more about optimizing revenue.

Tags: CRS, Revenue Management, RMS, total revenue optimization

VP Product Management, Texas, United States


Cendyn is a global hospitality cloud-based technology company that enables hotels to drive revenue, maximize profitability, and create deeper connections with guests through its integrated solutions.

Related Articles

Related Courses

You might also like:

  • Duetto Trends
Join over 60,000 industry leaders.

Receive daily leadership insights and stay ahead of the competition.

Leading solution providers: