Last week, I wrote Part One of this article series, which provides a checklist for hoteliers to determine whether your revenue management system is up to par for 2014. As I'm sure you know, the online and mobile channels are growing rapidly so if your RMS is not optimized for both of these channels, you will be leaving money on the table.
Let's take a look at some other items on the checklist! As a reminder, the first three were:
- Does your property analyze and provide rates based on historical data, AS WELL AS rate shopping market data?
- Does your RMS use pricing parameters to ensure that your rates help you achieve your strategic pricing goals?
- The cloud is everywhere – and so is your data.
Here are the remaining RMS must-haves for 2014:
4 – Are you thinking about the future?
Many RMS only consider historical booking pace when providing pricing suggestions, which is only half (or maybe even less!) of the revenue management puzzle. As well as historical data, RMS must also take into consideration future booking pace to ensure that your system is providing the most accurate pricing information as the market and a property's occupancy and booking pace changes.
In general, I recommend that you increase your rates when your booking pace picks up, and decrease your rates when your pace slows but as you know, occupancy is always changing. So if your RMS isn't taking how your property is filling up into consideration, how can you consistently adjust your rate to take advantage of a possible increase in booking pace, especially if it happens on Saturday afternoon or during a holiday (when your revenue manager is out of the office)? The answer is simple: you can't.
5 – Real-time means ‘in real time'.
Most RMS providers claim that their solution updates a property's rates in "real-time" when the reality is, most systems are not able to update in real-time because of the sheer processing power it would require. Every property relying on a system that does not update rates in real-time is leaving money on the table more often than not, because in most cases, they are only able to update rates a few times a day. While I'm sure that I don't need to state the obvious, I'll say it: a couple of times a day is not the same as updating rates in real-time, all day/night, everyday.
Not only will you lose out on opportunities to increase your rate as your property's booking pace increases (or as availability in your destination shrinks) between pricing updates, you could also miss any sudden changes to crucial revenue management data that factors into rate determination because your RMS will not see the change until the next pricing update – which could be hours or even days!
Let's look at an example. Before taking off, pilots are provided with information about their coming flight – flight plan, weather information, etc. As you can imagine though, they have systems that continue to update this information for them through the entirety of the flight so that they can provide the best and safest flight experience for passengers. Now, imagine if they didn't continue to use up-to-date information while flying (and simply used the data that they received before takeoff). If a massive storm hit right in the airplane's flight path, the pilot would not have had time to either avoid it or adjust his airplane's settings accordingly, which could put the flight and all of its passengers at risk. It is the same with revenue management…
People from around the world are booking hotels 24 hours a day, seven days a week, so if your property isn't optimizing your rates in real-time 24/7 as conditions change, then you are putting your property's revenues at risk.
So there you have it – all five characteristics that every property's RMS should have in order to be as successful as possible in 2014. This is the future of revenue management technology… and the future is today. After all, technology is making it affordable for hotels with any size budget to have the most sophisticated system on the market for a fraction of the price that you would have paid for a traditional system.
So what are you waiting for? Go 2.0 today!
About REVPAR GURU
REVPAR GURU helps hotels to analyze complex data – including historical rates, the rates of competing properties in the same destination, pricing trends and environmental factors – to determine the right rate, at the right time, to secure the highest number of bookings. REVPAR GURU's system calculates room rates up to a year in advance, and continues to update the rates automatically multiple times every day as factors change, across all online channels – including OTAs and direct channels.
In short, REVPAR GURU helps hotels to increase their occupancy and their revenues.
Headquartered in Miami, Florida, additional information can be found at www.revparguru.com or by calling +1.786.478.3500.
