Most revenue managers think Revenue Management Systems (RMS) become ineffective when the demand decreases. A classic example of this scenario was seen during COVID. Most hoteliers froze their pricing as they were afraid and decided not to use their RMS. At that time, nearly all hotels believed RMS to be an expensive luxury because of low demand.
The last two years eventually became a testing ground for RMS’s usefulness. And guess what? It turns out that RMS can help hoteliers in many ways, regardless of market conditions and seasons.
Let us first understand how the negative perceptions about revenue management systems started. We have to take a step back to dive deep into hotel operation legacies. Most hoteliers across the globe think that allowing bookings at all rates is the best way to fight the low-demand scenario. But the reality is different, and we will prove that with data.
Siim Karu conducted detailed research on a&o Hotels and Hostels, one of the largest hotel chains in Europe. His analysis aimed to quantify the revenue amount that RMS helped the hotel chain earn during the lockdowns. His finding was shocking for the entire industry as it came to light that a&o Hotels and Hostels made 7% more revenue compared to their old static approach. This article will explain how you can also increase your income by leveraging the full potential of a hotel RMS.
Turn Uncertainty into Opportunity with the Power of Machine Intelligence
We can never accurately predict low demand in the hotel business. Therefore, we need an efficient system that can react to uncertainty without any delay and adjust the price accordingly. Thanks to intelligent machines, we can calculate the best price within a short period- 24/7.
One feature that sets the best hotel RMS systems apart from ordinary ones is their efficiency in identifying spikes in demand. Pricepoint, for example, can easily recognize an upcoming sales glut and suggest an optimal price. This is how Pricepoint decreases the need for human efforts to adjust pricing manually. It goes without saying that prices calculated by an RMS are likely to be more efficient than human calculations as they leverage the power of AI-driven dynamic pricing for ideal outcomes. Besides, an RMS will also help you save time by minimizing your operational burden. It will enable you to focus more on the fundamentals of your business.
Boost Your Revenue and Occupancy with Pricepoint
Modern-day revenue management strategies should no longer exercise BAR pricing (a mechanism to determine the lowest price for specific hotel rooms and consequently set the other rates). Even in low-demand cycles, fixing the BARs won’t be helpful as they are entirely irrelevant now. Shaking off our old habits is the need of the hour. Our comprehensive solution, Pricepoint, can help you with this.
Pricepoint is a highly efficient revenue management system designed to solve hoteliers’ pricing problems. Our fully automated AI-based technology optimizes and recommends the best price every time. Pricepoint users never miss a single opportunity to boost their revenue and see the result in the bottom line. We can do the same for you. Request a 30-day free trial now and experience the difference.