Special reports
The hotelier's guide to evaluating revenue technology
Why invest in hotel revenue technology?
Whether you're already using hotel a revenue management system (RMS) or still reporting and calculating rates in Excel, taking on new technology can seem daunting. It’s easy to ask: why invest?
An RMS such as Duetto helps hotels to:
- Drive team and operational efficiencies
- Tailor packages to what the consumer wants
- Make more money
Sounds simple. But how does this work? Let's look at each in turn:
1. Drive team and operational efficiencies
Today’s revenue leaders are often responsible for clusters of hotels. If all properties are running on the same RMS, these leaders can easily track performance at a group and individual property level.
This helps them to identify and act on trends in the market and take a holistic approach to the profitability of the business. For example, by being able to see downturns in the market up to 365 days in the future, revenue teams can advise operations when it is most cost-effective to schedule maintenance, adapt staff rotas, or scale back on F&B orders. Alternatively, a spike in demand in one hotel may lead to rate rises in sister properties, as demand overspills.
2. Tailor packages to what the consumer wants
An RMS can take in a multitude of demand signals from the market. It can tell you when suites are at a premium or when single occupancy is more favored. This data can help your teams to get creative in crafting packages at a price that is attractive to the guest and competitive in the market.
Hotel revenue management doesn’t stop once the guest has booked. Using upselling tools, an RMS can then serve up attractive upgrade offers ahead of arrival, again tailored to the guest, helping boost occupancy into higher-rate rooms and suites.
Hotels that take a total profitability approach to revenue can further boost the bottom line by revenue-optimizing ancillary sales, such as beach cabanas, golf tee times, spa facilities, and more.
3. Make more money
The primary reason for adopting an RMS is to make more money. But how can an RMS do that? A cloud-based revenue solution like Duetto ingests more data than a human can manually manage. Data such as your web booking engine traffic, channel management signals, event data, OTA data, and more. It takes that data, analyzes it, and finds the market trends and prices accordingly. And it does that in real-time, continually flexing your rates up and down to find the price points most likely to convert.
What’s more, an RMS does not stop working at 5pm. It does not go on holiday or take weekends. It revenue optimizes 24/7, 365. So, if the market changes suddenly on a Sunday afternoon, Duetto reacts.
We find that, on average, Duetto GameChanger adds 5 to 10 points of RevPAR Index to new clients within their first year of running revenue on Duetto.
Does this make me obsolete?
Absolutely not! Even if you run your revenue on full automation, you need someone to check in on progress and ensure your segments, restrictions, and min/max bounds for example, align with your strategy.
A good RMS augments the talents of the revenue team, enabling them to focus on strategy and ‘manage by exception’ rather than be bogged down by manual data entry and generating reports.
Duetto’s controlled automation is built to help revenue teams manage by exception. By being able to set parameters at a property, cluster, group, brand, or even company level, revenue leaders can automate the areas of their revenue strategy that are most often smooth running, safe in the knowledge that Duetto will flex rates up and down depending on market sentiment and conversion rates.
This frees up their time to get more strategic. To get into the weeds on the parts of their commercial strategy that need a more human touch.
Six revenue management trends to watch
Today’s staffing pressures and market variability means that hotels need to implement systems that can harness and process extraordinary amounts of data without having to hire large teams of specialists.
Integrated, cloud-based solutions provide hotel revenue teams with access to comprehensive and clean data including inventory, reservations, group, competitor rates, and third-party market data.
However, even though your RMS is making calculations and adjusting rates automatically, revenue teams still need to have their finger on the pulse of current trends.
Here are six revenue management trends to watch for:
Variable demand
Demand will continue to be variable and as such hotels need to adopt very flexible pricing models. However, there are opportunities here. This variable demand should drive hotels to focus more on the repeat customer, using personalization and emotional trust appeal to build closer connections and loyalty with the individual guest. The value of this connection between hotel and guest will only grow in importance in the years to come.
Short term-booking windows
The short-term booking window remains, and this will continue to challenge hotel teams, both operationally and from a revenue perspective. However, a short-term booking window represents an opportunity to connect with a more mobile, more astute, and engaged traveler, switching seamlessly between business and leisure profiles.
Dynamic optimization
Hotels can no longer rely on fixed pricing models to deliver consistent and reliable volumes across their hotel real estate. Dynamic pricing and rate flexibility have become essential, not just for the hotel, but also to attract the new breed of engaged traveler. Real-time dynamic optimization enables hotels to react instantly to changes in demand, accelerating go-to-market strategies and promotions.
Real-time forward-looking data
More than historic data is needed to build a hotel revenue strategy. Duetto has been focusing on forward-looking data for years. Our solutions pull in website data that provides insight into future demand dates and consumer price sensitivities. Hotels need to look beyond the booking engine and start considering wider demand intelligence, such as how upcoming events (sports, concerts, conventions, etc) may boost demand, and on the flip side, be aware of how other external factors, such as severe weather, may change the demand curve. If you measure it, you can manage it.
Data transparency and co-operation
Sharing data with the relevant teams and making sure that all departments have access to the same data, in real-time, means that operations teams can better schedule staff and order perishables. At the same time, revenue, sales, and marketing can work together to fill any gaps in demand through tailored packages and personalized pricing. And this data should be available and transparent to all stakeholders. Today’s revenue leaders should be able to adapt their data story or visualization to their audience. They should be working closely with executive teams, asset managers, and investors, as well as brand development teams.
Personalized pricing
The more personalized your offers, the higher your conversion rate. The best way to drive this is to link personalization directly to revenue. Working together with Duetto, the Oaky upselling tool has reported hotels achieving 45% more guest spend per upgraded night and at the same time providing a customized guest experience. Hotels will see this trend continue through loyalty and profile-based offers targeted directly to individual guests in the shopping and confirmation process.
⭐️ Success story: Read how Nobu Hotel Los Cabos increased room upgrade revenue by 22.5%
The #1 challenge for hoteliers to access and analyze their data in real-time is the lack of integration between hotel tech systems. The property management system (PMS) currently stands as the central hub for hotel tech operations, yet many PMSs are not capable of ingesting and delivering the right sets of data. For hoteliers to advance innovation in the space, the data must be accessible.
Duetto works on an open API, which means that we can quickly and easily integrate with the existing elements of your technology stack.
Duetto works with over 100 integration partners, including more than 30 PMS providers.
A fully integrated tech stack enables a hotel business to connect its PMS, CRS, RMS, and CRM, to create a holistic view of the guest, market conditions, costs, and ancillary spend.
Key integrations
Central reservation system (CRS)
A strong connection between the RMS and the CRS helps hoteliers avoid failed updates, lost reservations, and bad reports when data and files are not transferred accurately between the two systems.
Customer relationship management (CRM)
An RMS-CRM connection is critical when hoteliers want to price based on a guest’s value to your property. Without this connection, hotels cannot price based on loyalty or past purchase behavior
Booking engine (BE)
Without a connection between the RMS and the booking engine, the right recommended rates cannot be pushed to the guest at the time of booking.
Sales and catering
When an RMS is integrated with a sales and catering system, the two can share real-time availability and demand data, helping hotels bring in the optimal business. With the aid of a system that recommends alternative dates and properties, hoteliers can book the right business at the right rates.
Find the right revenue management system for you
While we would obviously love every hotel out there to opt for Duetto, when choosing an RMS it is important to make sure it’s a system that is the right fit for your business.
5 features you need from your RMS
1. Intelligent, scalable automation
A key benefit of opting for a modern RMS is that it can help scale limited revenue management resources by automating manual processes. For example, turning “on” automated pricing can help a few resources to capably handle pricing for a large group of properties. It also helps even a single hotel be more efficient.
Consider an RMS that offers controlled automation, which gives you the ability to react to ever-changing conditions. With controlled automation, you can decide what is automated, what is not, and what you want to manage with a mix of the two.
2. Instant innovation
The market is constantly changing and technological innovations in distribution, marketing, and personalization mean that you need a revenue system that is constantly in tune with this. As a cloud-native software, Duetto users are always on the latest version. No waiting for IT to deploy new releases, and no additional costs to move from V1 to V2 or V3.
3. Enterprise strategy
Enterprise revenue teams need to automate, collaborate and innovate in new ways that intelligent, flexible RMS technology can facilitate. Whether you are looking for a corporate-level solution or want to empower on-property team members, your RMS needs to be able to set parameters for you and your extended team to be able to work within.
4. Comprehensive and configurable data set
PMS and CRS data have long proved valuable to revenue strategists. However, if you want to move forward you need to look forward, and not focus solely on your historic performance. You need an RMS that also ingests other integrated data sources to objectively assess demand.
Web traffic data is vital for assessing potential demand. Pulled from a hotel’s website booking engine, website data includes bookings, regrets, and denials on brand.com. Regrets are when someone visits a website, checks out rates, and decides not to book.
Denials are when a customer comes to a website, checks availability, and doesn’t find the availability because there is a restriction in place (room type not available, the hotel is closed, or the hotel is full, for example).
5. Flexible reporting
Your new RMS should offer a flexible reporting structure that enables you to define which metrics are most important to track and determine who should be notified. And, as we move away from STLY reporting, you need to be able to define the benchmark period most critical to your business.
Look for a system that enables you to analyze quickly and efficiently week-on-week pick up trends to enable you to adjust your pricing strategy in line with demand. Reporting should also be dynamic, and able to trigger against certain benchmarks, such as if booking levels fall. Manually reviewing every single aspect of the business daily is impossible.
Can the software price room types, segments, and channels independently of each other?
An RMS should allow hoteliers to flex their rates and discounts independently based on demand. For example, on high-demand days, hotels should be able to lower a discount channel to 1% or even 0% without lowering the BAR rate.
Will the software integrate with my PMS, CRS, CRM, and booking engine?
In general, pricing systems won’t work properly unless they are connected with a two-way integration to the PMS, meaning the system can pull rates and availability, analyze the data and then return a recommended rate to the PMS. Without a connection to the CRM, rates will not factor in loyalty or past purchase behavior.
What kind of data shapes the pricing algorithm?
All RMSs will pull in historical data, plus factor in pace and pick up, but advanced systems can react quickly to changes in market conditions with real-time pricing data, such as website activity, competitive rates, reputation scores, and air traffic.
How often will I have to upgrade the software?
There are a variety of different types of cloud platforms and SaaS delivery models. In general, the cloud allows multiple users to login from anywhere there is an internet connection. In a multi-tenant structure, such as Duetto, users are always on the latest version and receive regular product updates rather than continually purchasing new versions of the software.
Will I need dedicated staff to operate the system?
Modern RMS technology will automate much of the process. In advanced systems, users can build rules on top of the recommendations for additional flexibility. Users can override the rate recommendations should they know something about the market that the system doesn’t. Look for a flexible system, meaning it can both run on autopilot when needed and allow for deep analysis and modification at other times.
Integrations
Your revenue management system must integrate with your PMS, CRS, CRM, and booking engine with a reliable, two way connection so that the systems can share the right data.
Intelligent reporting
It’s important that your RMS can build, export, and share your most critical reports. Revenue teams must be able to share reports at the push of a button with management, ownership, and other departments within the hotel.
Open Pricing
With Open Pricing teams can yield all segments, room types, and distribution channels independently and in real-time. Open Pricing strategy enables rates to adapt to market demand.
Automated room-type pricing
Room-type differentials that automatically react to changes in market demand and guest booking behavior help ensure you’re pricing each room type according to its unique demand.
Cloud technology
An RMS that runs on multi-tenant cloud architecture allows your systems to integrate and share data more seamlessly and allows developers to push updates to your software in real-time.
Forecast and budget building
A good RMS not only presents your data in tabular reports but allows you to visualize your data and reports in graphical form. This allows revenue teams to better understand trends, outliers, and patterns in data.
Still unsure about the need for a technology upgrade? Ask yourself, are your customers still carrying around a Nokia 3310 out of loyalty? The phone was great in its day, but the world has moved on. Technology has advanced. The customer has advanced. And hotel businesses that don’t keep up with this change will slip behind at a rapid pace.
When your current technology is limiting your options, the replacement cost must be compared to the revenue lost from not implementing technology in the first place.
In addition, modern solutions attract the brightest talent, who don’t want to have to perform mundane tasks such as data entry. They want a system that offers the efficiencies of controlled automation so that they can work to influence the direction of business and strategy of a hotel business.
A cloud native system like Duetto also allows for a more fluid and hybrid way of working for the revenue manager, which is a tremendous benefit when attracting young talent today. A legacy system often requires an office presence. But by working in the cloud your talent can work in a more flexible way to drive revenue for the hotel from anywhere.
