What Hotels Need to Know About Revenue Management Automation

Revenue management automation is becoming ubiquitous in the hotel world.

As we enter the new year, hoteliers have told us that most organizations are now implementing at least 1 form of automation or AI into their revenue management tech stack. For hotels that aren’t utilizing an automated system, this can lead to vulnerabilities and missed opportunities.

Take an example: Late on a Saturday night, a large music festival is announced for a future date on social media; since it’s the weekend, the revenue management department isn’t there to implement strategy changes and guard the hotel’s inventory. Eager guests are able to book many rooms before more competitive rates can be set, and inventory restrictions are implemented. 

Now, our hypothetical hotel is in serious hot water; they’ve sold most of their rooms far below the market average ADR. Meanwhile, their competitive set still has plenty of rooms to sell, and has been able to capture much higher rates.

So how is it that some hotels are able to weather unpredictable scenarios, such as event announcements and major changes in competitor pricing and still come out on top? The answer is that they utilize some form of Revenue Management Automation.

What is revenue management automation?

Revenue management automation (RMA) is the process of automating routine revenue management tasks using a solution that allows users to define custom rules and thresholds that trigger certain actions and alerts when certain market conditions change.

Consider this: a revenue manager sets a custom rule in her automated RMS to push a $25 rate increase to both the CRS and PMS, but only when the hotel picks up more than 10 rooms over a 24-hour period for a specific day. She then copies this rule and applies it for all weekdays over the next 6 month period.

Although this is a simplified example, you can still imagine the time savings this creates for our fictional revenue manager. 

Before implementing this automation, she would spend around 10 minutes every weekday morning exporting and then analyzing her on the books report looking for dates that had pickup exceeding 10 rooms. She would then highlight each date that met the criteria in a spreadsheet, and then manually type in the new rate change into her PMS, cross referencing her spreadsheet.

Apply this process every morning over the course of an entire working month, and suddenly this simple automated revenue management task now saves several hours monthly. Add to this the potential reduction in human errors that happen over the course of the month due to highly manual processes involving spreadsheets and disparate systems.

This example only scratches the surface of the potential time savings that a well-calibrated, automated revenue management system can unlock.

Hotels need to use automation strategically

While automation is sometimes touted to be a silver bullet that will solve all of your revenue management woes, there is still something important to remember: automation should always be used strategically. 

Any rules, alerts, or automations should be periodically audited to ensure that they are producing the desired results. After all, airline pilots still make adjustments to their autopilot system mid-flight, and can take back the controls in the event that something unexpected arises.

Revenue managers should think of revenue management automation in the same light. An automated revenue management system should always be calibrated to make the most optimal decision at all times, and it is the job of the revenue manager or another designated member of the team to monitor and audit the RMS. 

With this consideration out of the way, let’s talk about why automation can be such a big benefit for hoteliers…

The biggest time-eaters in revenue management

According to results from a recent Lighthouse survey, the two biggest data-related challenges for hoteliers were lack of time to analyze data and data silos, respectively. Other challenges that topped the list included: data overload, lack of effective tools, and lack of actionable data. 

What’s interesting is that many of these challenges (data silos and lack of effective tools especially) are actually the cause of the biggest challenge (lack of time to analyze data).

Revenue managers need more time to think strategically, access their data and quickly extract the right insights for effective commercial decision-making. For RMs, the biggest time-eaters are: pulling reports from different sources, manually poring over those reports, and report bundling. These are tedious tasks that take away from the more meaningful data analysis they’d rather be doing.

For the General Managers or owner/operators of independent hotels, the biggest time-eaters include manually pricing individual dates, and juggling data from various inadequate tools, which keeps them from what they’d rather be doing: creating the best possible stay for their guests.

If any of these challenges sound familiar to you, it may be a sign that you could benefit from implementing an automated revenue management system. An automated revenue management system solves these challenges that both roles face by making data analysis more efficient and approachable. 

How so? Automated Revenue Management systems can succinctly summarize overnight changes, alert users to exception dates, and clearly present the data and logic used in its automated decisions, which represents massive time savings.

Choose a tool with the capabilities you need

Ultimately, as a hotelier you know best what capabilities are most important for your unique situation. This is why it’s important to compare the various solutions on the market before making a decision. 

Each automated revenue management solution offers different features at varying degrees of complexity and different price points, meaning that not every solution will be a one-size-fits-all for your hotel.

Consider factors such as your existing tech stack (for instance, what is my central reservation system or channel manager? Will my PMS be compatible?). Also, even factors like a user-friendly interface which might seem trivial at first, are important considering just how frequently the system will be used once you’ve committed to a solution. Other factors such as price, and whether or not you can trial the software up-front before purchase are also often top of mind for independent hoteliers.

Below we list what we think are the 4 top solutions currently on the market, along with a case for why each solution might be a good fit. It may even benefit you to jot down what you consider your top 3-5 considerations first, before reading up on each solution below, to see which has the most overlap with your list.

4 Top solutions for automating revenue management

1. Lighthouse – Pricing Manager

Of all the solutions listed here, Lighthouse’s Pricing Manager is easily the most user-friendly, especially for independent hoteliers who may be making their first foray into the automation space. Lighthouse’s Pricing Manager is an AI-enhanced tool designed to automate and optimize room pricing for independent hoteliers. By analyzing both internal performance metrics and our best-in-class market intelligence data, it provides tailored rate recommendations, enabling properties to enhance revenue and maintain competitiveness with minimal manual effort.

Key features include:

• Automated, Transparent Rate Recommendations: Delivers 365 days of optimized rate suggestions, updated hourly, to ensure pricing aligns with current market conditions.

• Powered by industry-leading Market Intelligence Data: Monitors 1.7 billion competitor rates daily, offering insights to help your property stay competitively positioned.

• Effortless PMS Integration: Features a color-coded calendar for easy visualization of pricing strategies and seamless integration with Property Management Systems (PMS) to automate rate updates.

To see more of the features in action, watch this video of Lighthouse Pricing Manager.

2. Cloudbeds – Pricing Intelligence Engine (PIE)

Cloudbeds’ Pricing Intelligence Engine (PIE) is an intuitive revenue management tool designed to help lodging businesses optimize their pricing strategies. By automating rate adjustments based on real-time data and market trends, PIE enables properties to maximize revenue and maintain a competitive edge.

Key features include:

• Rule-Based Automation: Set custom rules to automatically adjust rates based on occupancy levels, competitor pricing, and other factors, reducing manual intervention and ensuring optimal pricing.

• Competitor Rate Shopping: Monitor competitor rates in real-time to make informed pricing decisions and stay ahead in the market.

• Comprehensive Analytics Dashboard: Access detailed reports and analytics to track key performance indicators (KPIs) such as occupancy, ADR, and RevPAR, facilitating data-driven decision-making.

3. Duetto- Total Profit Optimization

Duetto’s Total Profit Optimization solution offers a holistic approach to hotel revenue management by integrating data from rooms, food and beverage (F&B), meetings, incentives, conferences, and exhibitions (MICE), and other ancillary services. This comprehensive strategy provides visibility across all revenue streams, enabling hotels to tailor room rates and packages that attract and retain high-spending guests, thereby maximizing overall profitability.

Key features include:

• Open Pricing for Packages and Promotions: Utilizes Open Pricing strategies to optimize ancillary revenue streams such as parking, F&B, spa, or golf, ensuring dynamic and competitive pricing across all services.

• Data Sharing via Open API: Employs an open API to integrate and exchange data with other hotel technology applications, facilitating seamless operations and more profitable business decisions across the hotel ecosystem.

• Comprehensive Guest Spend Measurement: Aggregates extensive data to provide a complete overview of guest expenditures throughout the property, allowing revenue teams to measure, manage, and optimize total guest spend effectively.

4. RoomPriceGenie – Real Time Pricing Optimization

RoomPriceGenie’s real-time pricing optimization automatically adjusts hotel room rates in response to internal data (like PMS information) and external market conditions. This dynamic approach ensures that hotels consistently offer competitive prices, leading to increased revenue and improved occupancy rates.

Key features include:

• Automated Price Adjustments: Continuously updates room rates based on real-time data to reflect current market demand and supply.

• Competitor Rate Monitoring: Tracks pricing of the 10 biggest competitors and hundreds of local Airbnbs to ensure your property remains competitively positioned.

• Booking Performance Analysis: Monitors booking patterns to identify demand trends, enabling proactive pricing strategies that maximize revenue.

Improve pricing and optimize revenue management with a robust automation solution

Selecting the right automated revenue management tool for your hotel is no small undertaking, but when you have a better grasp of what you stand to gain by implementing an automated revenue management system, it should be apparent that the benefits far outweigh the costs.

Implementing an automated system like Lighthouse’s Pricing Manager is one way for hoteliers to safely and effectively start incorporating automation and AI into their tech stacks without breaking the bank on expensive solutions with steep learning curves created only for large organizations.

To see if an automated revenue management system might be a fit for your hotel, get started with a free trial now to see the product in action, and learn more about its features and benefits.

About Lighthouse

Lighthouse (formerly OTA Insight) is the leading commercial platform for the travel & hospitality industry. We transform complexity into confidence by providing actionable market insights, business intelligence, and pricing tools that maximize revenue growth. We continually innovate to deliver the best platform for hospitality professionals to price more effectively, measure performance more efficiently, and understand the market in new ways.

Trusted by over 65,000 hotels in 185 countries, Lighthouse is the only solution that provides real-time hotel and short-term rental data in a single platform. We strive to deliver the best possible experience with unmatched customer service. We consider our clients as true partners – their success is our success.