Make the Most out of Your Hotel's Revenue Management Strategy

Making the most of your revenue management strategy

Boost revenue and save time

Use revenue management strategies to improve performance while increasing your bottom line

The primary goal of all hotels and bookable accommodation is to increase revenue and margin. This enables them to improve their offering, invest in their property, retain quality staff and in many cases give back to their communities.

Just as hotel guests have become infinitely more sophisticated in terms of planning their bookings and ensuring best value, making the most of all the technology available, so have property management systems – along with the revenue management tools which help set pricing to drive optimum levels of revenue and occupancy.

Setting the right price for hotel rooms is however a delicate balancing act that requires a deep understanding of market dynamics, value proposition, competitor pricing strategies, guest segmentation, seasonality, and the power of technology and data analytics.

The challenge lies in finding a sweet spot that appeals to guests while maximising revenue, and with this in mind it is vital to remember that behind every successful pricing strategy stands a rock-solid value proposition. It’s not merely about setting a price; it’s about understanding what makes your hotel stand out and what this is ultimately worth to your guests, and then automating it with all the parameters in mind.

Revenue management solution provider RoomPriceGenie – one of our most recent integrations – will help you to do this, and they claim an average revenue increase of 22% when automated revenue management is in place, in addition to hours of admin saved through automation.

But what does revenue management mean, and where does it fit into the PMS?

Revenue management sits alongside a PMS like Rezcontrol, working in parallel with distribution to ensure that not only is your hotel visible everywhere – in metasearch, with online travel agents and GDS – but that the pricing seen by potential guests is optimised for all parameters, such as seasonality, the competition and local events taking place.

It works by analysing occupancy rates, demand patterns and market trends to develop pricing strategies to attract customers for optimal profitability. It also offers effective inventory management, such as monitoring room availability, managing room types, and determining hotel guests’ optimal length of stay.

How do you build a pricing strategy?

An effective hotel revenue management pricing strategy considers market demand and competitor pricing to adjust room rates to maximise occupancy, revenue and profit.

This will take into account local events taking place enabling a premium rate; a decision to boost occupancy by offering a discount in a slow period, and crucially also forecasting and the setting of short, medium and long term goals, based on an understanding of past performance.

“By harnessing data-driven strategies, hotels can maximise revenue with high occupancy and guest satisfaction”

Revenue management in hotels therefore requires a deep understanding of consumer behaviours and industry trends, and the fundamentals can be broken down into:

  • Understanding demand by analysing market trends and historical data to predict demand
  • Setting prices for hotel rooms based on supply and demand
  • Managing inventory by allocating rooms across different distribution channels, such as direct booking and online travel channels, and setting minimum lengths of stay – it is also possible to set different parameters for different channels
  • Forecasting demand and adjusting prices accordingly
  • Continuously evaluating and adjusting strategies based on changing consumer behaviour and market conditions

This applies across all your revenue streams – rooms; F+B; conferences, weddings and events; and amenities such as spa, gym or golf – or even parking!

The importance of automated dynamic pricing to your revenue strategy

This is where a relatively new technology comes into play – automated dynamic pricing, such as that provided by RoomPriceGenie.

“The genius of automated dynamic pricing is, once the parameters have been set, based on your strategy, it runs itself.”

Hotels can set key dates by the week, day or even hour, to push out the best pricing to the associated OTAs through the PMS channel manager. It will monitor competitors and adjust accordingly for each parameter, as well as including sophisticated reporting which can predict patterns based on past experience.

RoomPriceGenie makes the process as simple as possible, with just three easy steps to set up automated pricing:

  • Set minimum and maximum prices
  • Define your room types
  • Fine-tune your seasonality and day-of-week cycles

With pricing updates up to 12 times a day, programmable up to 18 months into the future, it’s no wonder hotels are choosing to go on autopilot, while seeing around 20% in revenue increase, and saving hours a week on rate management. Automated pricing adds enormous value to any PMS, and to any hotel on its books.

Rezcontrol offers its customers the ability to automate their pricing strategy through the PMS itself, making RoomPriceGenie one of our most valuable integrations. The whole is truly greater than the sum of the parts.

Not a customer? Call us on +44 (0)330 223 1456 or email – or contact us for a demo.

Revenue management within a hotel's PMS