Examining Trends in Rate and Revenue Management

Examining Trends in Rate and Revenue Management

Rate management has always been an evolving discipline, with the price of a room forecast by considering a host of factors — potential demand, local events, seasonality and historical data to name a few. The prevailing tools and technologies of rate and revenue management depend on these factors, as well as advanced algorithms and rate shopping; a decided and dedicated plan of action; and a future that looks to incorporate artificial intelligence (AI) and real-time guest data.


From big brands to independents, what’s clear is that, in addition to RMS (revenue-management software) for revenue optimization, rate-shopping tools have become commonplace.

Michael Bennett is Chief Marketing Officer at Cendyn, a cloud-based software and services provider for the hospitality industry, which recently acquired Rainmaker. Within the Rainmaker suite is guestrev, a revenue- and profit-optimization tool. “Rainmaker [guestrev specifically] pulls in competitor rate data and includes it in its pricing algorithm alongside a segment-, room-category and length-of-stay-level demand forecast,” explains Bennett. “A sophisticated optimization process evaluates all demand against the remaining available supply of rooms and determines the most profitable business mix for the hotel.”

This competitor data is called ‘rate shopping’ and it’s extremely valuable information, as knowing the competition’s room rates means hoteliers across all segments can stay competitive. “Competitor rates can be used to influence the final price recommendation so hotels don’t leave money on the table by pricing too far below competitors and ensuring pricing is as competitive as possible when the hotel needs to capture more market share to boost occupancy,” says Bennett.

Toronto-based Sunray Group of Hotels has a dedicated revenue-management team that works closely with the company’s more than 50 owned and managed hotels. “Our hotels subscribe to daily rate shops, which show our competitors’ rates so we can price accordingly based on the hotel’s occupancy levels, the competitors’ rates and the demand in the market,” explains Sandeep Gupta, the company’s vice-president.

Though rate shopping seems to have become standard across the board, the level of automation depends on the hotel. Gregory Pohlod, director of Revenue at Accent Inns — a private chain that owns five Accent Inns and two Hotel Zeds in western Canada — says his company uses a variety of systems for rate shopping and reservations, along with products from TravelClick’s suite of hospitality software. Once the data is gathered, Pohlod manually updates the central-reservation system to push rates out to channel platforms on a daily basis.

Even when the rate and revenue products have the power to automatically dictate rates, there’s still a human element overseeing and approving rates before they hit the channels. Lisa McCaul, director of Revenue at The Inn at Laurel Point in Victoria (an independent hotel) also uses TravelClick for rate shopping, along with a forecasting system that decides on a rate for each day, which is sent to the PMS and the channel manager. “I can check and see if I agree with it and, if I don’t agree, I’ll change it,” McCaul says.


Although a sophisticated system can recommend an ideal rate, the human element is still crucial, especially when it comes to a hotel’s overarching rate-and-revenue strategy.

Read rest of the article at Hotelier