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- Independent hotels and smaller chains are turning to technology to enhance their revenue management, offering a wider range of integrated systems for sales, marketing, distribution, and more.
- The industry is seeing a shift towards “total revenue” per guest, focusing on maximizing potential revenue from all guest services, and not just room bookings.
As per PhocusWire, the hospitality industry is seeing a rise in the adoption of advanced revenue management systems, particularly among independent hotels and smaller chains. Daniel Segerblom, head of revenue at Diamo, a revenue platform spun out of Life House, describes it as the “second wave of technology adoption.”
The first wave involved modernizing small hotels’ property management systems (PMS). In contrast, this second wave sees PMS offering vast integrations into other systems like sales, marketing, distribution, and revenue management.
This shift has been made easier by the availability of off-the-shelf products for smaller hotels, according to Sabrina Jackson, senior director of product management, applications at Duetto. The pandemic has also contributed to propelling this movement, forcing hotels to streamline workforces and integrate their commercial divisions.
With these changes, hotels are becoming more experimental in revenue management strategies. The concept of “total revenue” per guest is gaining traction. It involves maximizing potential revenue from all guest services, such as food and beverage, spa, and more, instead of just focusing on room bookings.
Companies like IDeaS and Duetto are developing tools and services to help hotels visualize and strategize more profitable outcomes. Duetto, for instance, recently acquired Micerate, a dynamic pricing technology provider for meeting and event spaces, indicating a heightened focus on the groups and events sector.
As revenue management evolves, companies are exploring new avenues to maximize profits. Diamo, for example, is leveraging big data, social media, and AI to analyze various customer touchpoints. They aim to understand as much as possible about the customer before their arrival to offer a tailored experience. Similarly, SHR is exploring the “propensity to cancel” a room to provide better deals to more loyal customer profiles.
Fast reactions to market shifts, particularly around event-based tourism, are becoming more critical. Duetto’s Dynamic Optimization product, for instance, listens to incoming data 24/7. If it detects an anomaly, it can reevaluate pricing for that hotel and push out new rates almost immediately.
While the future of revenue management may see the influence of generative artificial intelligence, the current focus is on improving the user experience for hotel employees. The goal is to make hoteliers more comfortable with revenue management, allowing them to understand and question suggestions and price recommendations more effectively.
The transformation of revenue management in the hospitality industry underlines the growing reliance on technology for competitive advantage. CEOs now frequently discuss revenue management and related technologies during earnings calls, as noted by IDeaS’s Klaus Kohlmayr.
