How technology can help hotels increase revenue in an uncertain market

GUEST OPINION: To operate profitably in a disrupted market, hoteliers must utilize all hotel features and increase profits in unison. Rather than simply viewing a hotel’s revenue through the prism of guest room rates, this holistic approach takes into account other revenue streams to more strategically coordinate the property’s revenue mix and profit centers.

Maximize revenue from each guest
To properly understand the value of a guest, a holistic view of the customer’s lifetime contribution must be obtained, not just the cost of the room rate.

To get this overall view of guest revenue, data from all hotel transaction systems must be integrated to provide a true picture of the guest’s preferred activities and overall value to include ancillary value, from food service to use of the day spa, guest rooms to gift shop purchases, the cost of the reservation channel, and more.

By using an advanced revenue management system (RMS) to help them identify who their most valuable guests are, hoteliers can implement strategies to make those guests feel welcome, recognized and inspire long-term loyalty .



A modern RMS makes a significant difference to both the top and bottom lines for hoteliers. Using a series of specialized algorithms and calculations, RMS automatically assesses hotel performance and market demand and then deploys pricing and availability solutions to the appropriate distribution ecosystem.

End-to-end profit optimization capabilities built into the most sophisticated RMS also enable hotels, resorts and casinos to capture the most valuable business while accounting for the total contribution of each guest.

This allows hoteliers to assess total revenue, profit margins for each revenue stream, and costs associated with acquiring and servicing guest stays in real-time, while determining highly sought-after metrics such as profit per available room (ProPAR).

Adapting to the changing market
Although historical booking data may be less directly comparable to today’s conditions, RMS should be able to build a set of forecasts based on all reliable external and internal market intelligence such as government announcements, travel policies, flight data , Google trends and market reports.

In this environment, revenue managers are challenged to find relevant data sets today and therefore must build their forecasts based on several scenarios (optimistic, most likely and pessimistic) before reviewing actual demand against forecasted results and adjusting long-term pricing strategies.

Use analytics to support business planning
While older versions of RMS can use a limited number of forecasting models at a level set manually by users, the high-performance forecasting built into a modern RMS relies on hundreds of advanced forecasting models, where the most appropriate model is selected by the system automatically.

The predictive model parameters are then calibrated to understand the impact of specific price sensitivities – no-shows, cancellations, booking windows, etc. – within the forecasting group on granularity of individual rate codes and room types.

Hotels face increasing pressure to optimize costs and operating budgets. Folding them into the forecasting process intelligently and using it as the next step in operational planning and budgeting can improve staff efficiency and hotel profitability, even in a disrupted market.

Analytics can be used to solve a variety of challenges, including adapting forecasts to changes in demand. Solutions must be flexible and advanced enough to select relevant data sets for multiple segments or channels within the property.

For example, the domestic leisure segment will have a more relevant history than the international travel market.

Automate hotel revenue processes with an advanced RMS
Manually collecting, evaluating and calculating data for pricing purposes through spreadsheets is not only a tedious process, but also slow and highly prone to errors and missed opportunities, especially in this era of uncertainty. This is why RMS is more important in the hotel sector than ever before.

Advanced RMS not only generates prices that adapt to market changes, but also considers the competitive environment and guests’ willingness to pay to help generate demand and maximize revenue opportunities.

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