Why Revenue Management Systems Matter in Low-Demand Periods

Revenue managers often assume that revenue management systems (RMS) are ineffective when demand decreases. During the COVID-19 pandemic, this misconception spread widely. Many hotels froze their rates, paused revenue management, and considered RMS technology an unnecessary expense.

But the past few years have shown the opposite. Data now proves that an RMS can deliver measurable revenue gains in both high and low-demand environments.

Where the Negative Perception Started

Traditional hotel operations have relied on static pricing models like Best Available Rate (BAR). Many hoteliers believed that when demand fell, accepting bookings at any rate was the safest way to fill rooms.

However, research has challenged this approach. Siim Karu, studying a&o Hotels and Hostels—one of Europe’s largest chains—found that during lockdowns, the company generated 7% more revenue with RMS-driven pricing compared to its old static model.

The lesson is clear: static pricing leaves money on the table, while intelligent automation unlocks revenue even in uncertain conditions.

Turning Uncertainty into Opportunity with AI

Low demand is notoriously hard to predict. Hoteliers need systems that react instantly to market changes—something spreadsheets and manual adjustments cannot achieve.

AI-powered RMS platforms, like Pricepoint, solve this by:

• Running real-time simulations 24/7
• Detecting sudden spikes or drops in demand
• Adjusting room rates automatically across OTAs and direct channels
• Reducing manual intervention, saving time for revenue managers

The result is pricing that is faster, more accurate, and more profitable than human calculations.

Why BAR Pricing Is Obsolete

The BAR pricing model—setting one base rate and adjusting others around it—no longer fits today’s volatile markets. In low-demand cycles, fixed BARs quickly become irrelevant.

Modern RMS tools eliminate these outdated practices by:

• Continuously recalculating optimal rates in real time
• Factoring in seasonality, customer booking behavior, and competitor activity
• Balancing occupancy and ADR for maximum RevPAR

Boosting Revenue and Occupancy with Pricepoint

Pricepoint’s AI-driven dynamic pricing engine is designed to remove the guesswork from hotel revenue management. With full automation, it:

• Optimizes and recommends the best price for every room, every day
• Increases revenues by an average of 19%
• Lifts occupancy rates by 13%
• Frees staff from manual updates, allowing them to focus on guest experience

Hotels using Pricepoint never miss a revenue opportunity—even in low-demand periods.

Conclusion

The belief that RMS technology is useless in downturns is a myth. Evidence shows that hotels using AI-powered systems like Pricepoint outperform static models, even in challenging times.

👉 Want to see the impact on your property? Start your free 30-day trial with Pricepoint and discover how automated revenue management can turn uncertainty into opportunity.

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