No matter the size or type of hotel, if you want to boost bookings, maximize hotel revenue and remain competitive in today’s uncertain market, then there is significant value in using an automated pricing solution or an RMS. These hotel pricing solutions are the best way for all hotels, whether they have 10 rooms or 300, to boost occupancy and maximize hotel revenue, especially via the direct channel.
NB: This is an article from RoomPriceGenie, one of our Expert Partners
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Exit Excel… Enter Technology
Excel spreadsheets used to get the job done (sorta) but, in our post-pandemic world, your historical data is no longer a reliable data source, due to the ever-changing supply and demand patterns in our current market. Instead, successful hoteliers implement dynamic pricing, using future market and occupancy data to determine their room rates, which makes it possible for your property to be competitive, even when you don’t know what the future holds.
Unfortunately, that’s easier said than done (without the help of technology!). Human beings are not able to collect and analyze millions of data sets to identify patterns and make accurate predictions based on the patterns; our brains were just not designed to “compute” information that way. Human beings are best at developing and executing revenue management/pricing strategies, offering guest services and creating a warm, enjoyable experience for every guest. For you to have the time to prioritize your guests’ experiences, you have to say goodbye to your Excel spreadsheets and embrace an automated pricing solution.
Dynamic Pricing: The Future of Hotel Revenue Management
Automated pricing solutions leverage dynamic pricing to boost your bookings (especially via the direct channel) and increase your hotel revenue, no matter how the market changes.
Here’s how dynamic pricing works… Automated pricing solutions use advanced hotel Artificial Intelligence algorithms to collect and analyze market data, competitor pricing data, hotel demand, and much more, and then provide you with the ideal rate, based upon the complex nuances of the market on that day or even, in that hour.
In layman’s terms: an automated pricing solution pushes up your price when occupancy is high, leading to a higher ADR; when occupancy is low, the solution reduces the price to put more heads in empty beds. These updates continue to be made whenever the solution recognizes a pattern in the data sets that shows that the market supply/demand, your competitors’ prices, etc. have changed and the solution will update your rate accordingly, without you having to lift a finger.
Automated pricing solutions also provide real-time market demand data, which you can use to make informed decisions about how best to allocate your inventory. For example, if the pricing solution detects there is an influx of Chinese tourists interested in traveling to your destination, you can update your distribution mix to allocate your room inventory to the online booking channels that Chinese tourists prefer to use, resulting in your property securing a greater hotel market share with that demographic.
Not convinced an automated pricing solution is the right fit for your hotel?
Let’s look at some numbers from a case study…
Did you know that hotels using automated pricing solutions, on average, experience a 22% increase in revenue and 4% increase in ADR? In dollars, this translates to $70,000 more revenue per year, for an average 19-room hotel, making it a very valuable investment (which, very quickly, will cover the cost of the solution’s monthly payments).
On average, hotels using an automated pricing solution save 10 hours per week, by eliminating the tedious, time-consuming process of manually calculating and updating room rates (bye Excel!).
Automated revenue management solutions give hotels more visibility on the right distribution channels, at the right time, at the right price, to ensure that you securer the highest occupancy index, boost ADR and maximize hotel revenue.