Hotels, are you updating your prices 64 million times a year?
For a typical hotel that offers five room types with four available options (with or without cancellation & breakfast) with the intentions to update its prices once an hour, one has to perform more than 64 million price updates a year.
Each year brings with it new challenges, but one that returns every year as a hotel operator is how to drive rooms revenue up and bring operating costs down.
Years ago, a traditional approach to revenue management would review historical rate data, assess your competitor set and room inventory and from there, apply any discounts or increases to your rack rate and tweak if necessary during the ups and downs of the year.
Today, particularly because of technology and the ever-growing choice of online channels, it has become increasingly difficult for hotel operators to keep pace with the level of complexity and volume of rate changes required to be productive and not “leave money on the table”.
So how can a hotel solve this ongoing revenue challenge?
With the advancements in technology slowly being adopted within the hospitality industry, effective revenue management methods now include a mix of old and new practices.
There is no doubt that pricing has always been used by hotel operators to drive both occupancy and RevPAR but, in today’s hospitality market with so much price transparency and buyer research, there is an even greater focus on having the right rate in place.
The ideal situation for a hotel operator is to have software that automatically sets optimal pricing by blending both historical data and up-to-the-minute information. Using current market conditions helps monitor and adjust rate settings to improve performance and keeps a focus on market demand in real-time.
To see a return on your efforts with these new revenue management practices, it’s important to leverage technology such as automation, as this is a game changer compared to the more traditional methods.
Stop setting your rates manually
Having to perform rate adjustments manually is time-consuming, it needs speed and accuracy to get the fullest potential from a pricing system. Using the latest in machine learning, these systems can compute rate changes based on up-to-the-minute changes and can make these adjustments 24/7.
Whether you’re an owner, operator or chain of hotels, to survive these turbulent times you need an approach to pricing that ensures you leverage every point of revenue from your room rates.
With operating costs at an all-time high in the hospitality industry and growing, not many operators have the luxury of having a team available to keep in place all the necessary “checks and balances” to assess and change rates to boost revenue. So, an important question to ask yourself is how can I improve the way that I manage my hotel’s revenue without having the time or money to invest in extra resources or an expensive revenue management system?
First of all, a strategic approach to your pricing is now an integral part of a successful hotel revenue management strategy. And secondly, having access to automated software that sets the right rate for the right time, without you having to crunch the numbers has now become a must-have.