On the journey to post-pandemic recovery, hoteliers need to be clever about which revenue intelligence solutions they invest in

The coronavirus pandemic has severely impacted the profitability of the global hospitality industry, which in turn has accelerated its digital transformation, both front and back of house. Thousands of revenue managers have been furloughed or made redundant, and many of those still employed are either having to work remotely or are now responsible for a cluster of hotels, instead of being dedicated to a single property.

Still to this day, many hotels (especially independent properties and smaller chains) are making decisions that are based on gut instinct rather than data. These hoteliers know they need to finally start implementing a revenue optimization program to survive this crisis, but how can they do that at a time when they are more resource-constrained than ever before? If your tech stack already includes the essentials for advertising your rates and taking reservations (PMS, booking engine, channel manager, CRM, F&B Point of Sale), isn't all other software just a nice-to-have?

Is a Revenue Management System (RMS) essential for revenue optimization in 2021?

In theory, RMS software justifies its high cost by analyzing enormous amounts of historical and future data to automatically provide useful forecasts and optimal pricing recommendations. But, in practice, even leading RMS vendors have admitted that post-COVID-19 "technology purporting to use AI and Machine Learning has proved useless due to the dramatic shift in demand year-over-year, with many hotels turning off all automation on their revenue management systems." (reference).

Pre-COVID-19, conventional yield management wisdom dictated that hotels should be increasing room rates in parallel to pace and demand going up. Most RMS are geared toward optimizing pricing based on occupancy rates and past trends, whereas today we are experiencing historically low occupancy on the books (OTB). Until the hospitality industry and all the segments (corporate, groups/packages, events, etc.) sufficiently recover, it is near impossible to increase rates, as consumers are currently highly price-sensitive and on the lookout for the best deal with more determination than ever.

At the end of the day, according to research by Skift, only about 16% of hotels worldwide use an RMS (reference); further proof that it is not currently essential, especially for properties that are only just beginning a revenue optimization process.

Is a Business Intelligence (BI) solution essential for revenue optimization in 2021?

In a word, yes. A good Business Intelligence (BI) tool that automatically collects the data from all the hotel's disparate systems and revenue streams (PMS, CRS, F&B, etc.) into a single unified dashboard with operational analytics can potentially offer actionable insights similar to an RMS, while being more cost-effective and flexible.

Revenue managers can stop wasting significant time creating reports and interrogating their data. Likewise, General Managers and Chief Operating Officers (COO) can avoid spending further time collating various reports to give them the insights they need. With clearly visualized data in dashboards, Revenue Managers can identify opportunities, spot trends and improve their forecasting. Any BI solution that can create pick up reports, for example, would allow Revenue Managers to quickly spot an unexpected drop in occupancy and take appropriate steps to ensure occupancy. Business Intelligence tools eliminate data silos and allow better, faster, more accurate reporting that speeds up decision making. All teams can have access to the same data ensuring everyone is on the same page when agreeing on performance improvements.

How do I select the best BI solution for my property or hotel chain?

These are the questions to ask before you buy:

Will it seamlessly sync with my existing PMS and other source systems?
Is it cloud-based?
How cyber-secure is it?
How good are its data visualization capabilities?
How intuitive are the dashboards and reporting functionality?
Does it offer both property-level and chain-level views?
What level of guest analytics is available?
Can it automatically generate pickup reports?
Can I access it from multiple devices, e.g. on my tablet?
Does it offer different user access levels?
Is it available on a rolling monthly SaaS basis?
How long does it take to implement?
Has it been developed with hotels in mind?
What on-going customer service support will be available?
Can it scale and adapt as our chain evolves?

Is a Rate Shopping solution essential for revenue optimization in 2021?

Yes, and in fact the vast majority of hotels rely on legacy rate shoppers to inform their rate strategy. But, in the 'new normal', there's an opportunity to take a fresh look at your revenue technology stack and consider using a solution that not only tracks comp set rates, but crucially also monitors competitive visibility and guest reviews.

How do I select the best rate shopping solution for my property or hotel chain?

These are the questions to ask before you buy:

Is the data complete and current?
Is it comparing 'like for like' rates each time by conducting room type matching?
Can I customize the guest point of origin (Point of Sale) based on my hotel's source markets?
Does it show prices from Booking basic?
Can I compare my competitors' OTA ranking and visibility?
Would our head office have cross-cluster or cross-chain views?
Can I see how upcoming events are influencing pricing?
What other systems does it sync with?
Is customer success support available whenever I need it?

Is a predictive tool that tracks booking intent essential for revenue optimization in 2021?

Intent data (e.g. Google trends, OTA browsing history, etc) can indeed predict travel demand in normal market conditions, and there were many academic studies about this written over the past decade. But right now, many people (including yours truly) are looking on travel websites without actually really wanting to book a holiday or a hotel. In all probability, until all of us are vaccinated against COVID-19, internet searches maybe reveal our aspirations and daydreams for the return of tourism, longing for the day when we will be able to board a plane for a holiday in the sun again, rather than actual intent. Maybe toward the end 2021, such tools will become useful or even essential, but that is a very long time away - so this is something to look into in a year's time and consider for inclusion in the (hopefully improved?) 2022 budget perhaps.

To sum up, revenue optimization is a journey not a destination - same as digital transformation, in fact. Pricing your hotel rooms optimally will be an ongoing effort, but luckily there is affordable technology available right now to help and guide you on your way. Just choose wisely.

About Fornova

Fornova empowers the global travel and hospitality industry to optimize distribution, generate demand and maximize revenue by delivering best-in-class, data-driven Business Intelligence solutions.

Our clients include most of the world's top 10 largest hotel groups, the biggest global OTAs, hundreds of smaller brands and independent hotels, as well as car rental companies and booking sites. Our solutions enable their entire organization (from revenue and distribution to sales, e-Commerce and operations) to make better decisions faster, navigate through changing market environments and stay ahead of the competition.

We track 100,000 hotel brand.com, OTA, metasearch & car rental websites every day, and using our patented technology we monitor 1.25 billion rates from over 70 different countries (Points of Sale) every month. In 2020 we celebrated 10 years in business, having grown to 200 team members based in 10 countries across four continents.