In the past, manual-based revenue management approaches have looked at a hotel’s booking history and current activity levels to forecast demand. During periods of high demand, revenue managers would increase rates. When demand is low, they would discount them, thereby generating best-case revenue under both scenarios. The reality is that today, amid massive market uncertainty and a heavy reliance on online travel agents and flash sales, it’s almost impossible to look at a hotel’s booking history and identify trends because the booking patterns are fluctuating constantly, driven by rapid changes in consumer behaviors. It is therefore incredibly challenging for revenue managers to recognize small changes, which indicate shifts in demand, and then to react in time to leverage the opportunity and drive profit.

Throughout the COVID-19 period and beyond, forecasting, inventory controls, and pricing decisions will rarely be this simple. Hotels have renovated and modernized their properties, similarly, it’s time to update and rethink our view of automated revenue management.

In a high-speed environment, manually collecting, evaluating, and calculating data via spreadsheets is not only a tedious process, but it’s also slow and highly susceptible to mistakes and missed opportunities, and more importantly, missed profits. This is where an advanced revenue management system (RMS) makes a huge difference to both the top and bottom line. Through a series of specialized algorithms and calculations, an automated RMS assesses hotel performance and market demand and deploys pricing decisions automatically while simultaneously notifying the user.

In a crisis like the COVID-19 pandemic, hoteliers tend to overreact with drastic price drops to compete on the remaining demand that does exist. An automated RMS is designed to price optimally, even in times of low demand, ensuring the price selected is relative to the level of demand and the price sensitivity, to avoid a “race to the bottom”.

If there ever was a time to evaluate and update your hotels’ tech stack and embrace automation so you can focus on what’s important, that time is now.


Wyatt Niblett-Wilson, Marketing Coordinator – Pricepoint

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