Post-COVID Hotel Pricing: Why Automated Revenue Management Is Essential

The COVID-19 crisis brought travel and tourism to a halt. Airlines, cruise lines, railways, and especially hotels faced an unprecedented collapse in demand. Now, as recovery begins—whether in months or longer—the industry faces a unique challenge: setting prices and generating revenue from scratch.

The instinct might be to slash rates to attract bookings, but this is a dangerous path. Instead, embracing automated revenue management systems (RMS) could be one of the smartest investments hotels can make for reopening and future resilience.

Automated Revenue Management – Necessity, Not a Luxury

Lockdowns and reduced business forced hotels to cut costs and streamline operations. This reality has pushed hoteliers to reevaluate their tech stack and look toward automation.

Research from Cornell University after the 2008 financial crisis identified four critical revenue management challenges:

• Rate resistance
• Contract renegotiation
• Price wars
• Intense competition

These factors remain just as relevant today—if not more so. Without automation, hoteliers risk facing three major problems.

Three Revenue Management Challenges Hotels Will Face

1. Outdated historical data
2. Pre-COVID price elasticities no longer reflect reality. Using them now is misleading because the travel landscape has fundamentally changed.
3. Bias toward volume
4. Traditional revenue managers often push for occupancy at any cost. In today’s market, that approach risks a race to the bottom—damaging revenue, brand positioning, and long-term rate integrity.
5. Ineffective legacy algorithms
6. Many older RMS platforms automatically drop prices when demand falls. But when there is no demand to stimulate, this strategy is futile and even harmful.

Why Automation Gives Hotels a Competitive Edge

Recovery will not be even across markets. Properties that can adapt pricing quickly and intelligently will capture market share while others struggle.

Automated RMS solutions, powered by AI and real-time data, provide:

• Flexibility to respond instantly to volatile demand
• Proactive pricing strategies instead of reactive discounting
• Sustainable rate integrity to protect long-term profitability

In a world of extreme uncertainty, automation isn’t a nice-to-have—it’s the foundation for recovery and future success.

✍️ Wyatt Niblett-Wilson, Marketing Coordinator – Pricepoint

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