World Panel
Viewpoint 5 February 2020

Is revenue management stuck in a rut?

Revenue Optimization

— 11 experts shared their view

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This viewpoint was created by
Klaus Kohlmayr, Chief Evangelist at IDeaS Revenue Solutions
Floor Bleeker
Chief Technology Officer at Accor

While having a revenue management system was a competitive advantage in the past, it's now commonplace. We are close to what the airlines are struggling with for years, they all use the same algorithms and they all end up with the same pricing. Instead of paying for an expensive system you might as well just follow what others are doing, and some hotels have taken this route already.

Fortunately, hotels are not as much a commodity as airlines and they can differ greatly by brand or experience. Revenue management systems need to start taking this into consideration and work more with CRM and sentiment data to optimize pricing for each individual customer.

Most hotels offer much more than just a bedroom. Revenue management systems should be able to yield F&B, events and any other type of ancillary revenue. This will become especially relevant when CRS systems adopt an attribute-based pricing approach. 

Finally it's really not about revenue anymore. The RMS systems should start looking at profit. Two bookings at the same room rate could vary widely in profitability based on the channel or type of customer.

If the RMS systems don't adapt and hotel sales become more like regular retail, then the big retail engines may become an option for hotels as well and that would open big opportunities!

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