The Revenue Management System is a formidable technological tool for optimising the revenue of accommodation facilities, also thanks to the possibility of managing the rates to be proposed in real time.
Insiders refer to this as “making revenue” meaning a series of actions aimed at increasing turnover: but to what extent can technology come into play? We talk to Michele Bettazza, Hospitality application consultant, who offers us some invaluable insights on the subject.
How are hotels managing their rates this year?
In the last 3 years, the market has been very dynamic, constantly fluctuating and even if, for various destinations, 2022 presents similarities with 2019, in many other aspects it is still a different year. In this context, historical data can be used to good effect and they allow us to make various considerations, but for a correct rate strategy it is important to consider other aspects too, in addition to developing the bookings on one’s own planning.
Revenue Management is increasingly oriented to anticipating the demand, and in this context, it is essential to equip ourselves with tools that allow us to understand where searches are concentrated, even before the bookings themselves materialise.
What are the current booking trends?
The trend is the return of tourism in the cities of art: after a black 2020 and a slightly better 2021, at least in the summer period, this year the indicators are all positive. A major increase in rates, followed by rising employment, is bringing results beyond expectations in various facilities. The pickup, or the trend of the nights booked, has not yet slowed down and remains higher than that of 2019.
Sea, mountains and lakes confirm a positive trend in the summer and this year they can count on a much longer seasonality. The much smoother pickup this year has slowed down in the past few weeks, but this was to be expected as the booking window has widened considerably this year.
So are we looking at good prospects for hoteliers? Despite the numbers, summer is certainly not easy for hoteliers, with staff and inflation proving the main problems. Inflation is particularly evident in energy costs but also in food prices. In addition to an accurate management control, the increase in costs can be offset by increasing sales and rates. The inflation issue is also a worry for holiday-makers so the increases cannot be indiscriminate but will be evaluated according to the response of the reference market.
Those who best managed their rates, optimising them based on the demand, managed to improve their average rate to much more substantial figures than current inflation. Those who have kept their rates similar to those applied in 2019, or static during the course of the season, at the end of the year will have a few more difficulties than those who have greatly improved their KPIs.
How does an RMS help facilities?
Revenue Management System is quite a broad term, and there are several solutions on the market. Many tools are simply based on employment. The best Revenue Management Systems analyse the internal data of the facilities thanks to the interface with the main PMS and external data, i.e. competitors, reputation, events, but above all the pressure of future demand thanks to tools based on Big Data and on artificial intelligence allowing them to anticipate demand trends and adjust their rates in advance.
It is essential to react quickly to changes, especially in this very dynamic market phase. I believe that human sensitivity is still an important aspect today, but none of us have the computational capacity of a machine. An RMS is a tireless partner, always focused and precise, able to support us by constantly analysing a quantity of data beyond our reach, improving efficiency and performance.
Does it appear to be an indispensable tool for optimising pricing strategies?
Let’s say that from a technological point of view we are talking about another step forward in the Hospitality world. Revenue Management Systems are present in 10-15% of facilities, but this percentage is constantly growing and they will soon be an indispensable tool for optimising prices. The sphere of Revenue Management is very broad, but pricing is certainly an important aspect for improving revenues.
For facilities equipped with a Revenue Manager, the RMS will be of support, recommending the most suitable price and allowing them to evaluate the situation in just a few moments, displaying the hotel trend, and comparing it with past trends, showing the prices applied by their competitors, and the pressure in the destination.
In small / medium-sized facilities where those who deal with prices also have other tasks and time is always a problem, Revenue Management Systems will be able to change prices independently. It is important to consider that the objective of an RMS is to increase revenues, therefore it is an investment that pays for itself quickly.