ROOMDEX hosted an webinar on the future of automated revenue management on Tuesday April 13, insights from four leading hotel RMS providers:
Cheryl Chavez, Chief Product Officer at Duetto
Michael McCartan, Chief Growth Officer at Atomize
Jens Munch, Sales Director and Co-Founder at Pace
Klaus Kohlmayr, Chief Evangelist and Head of Strategy at IDEAS
Moderated by ROOMDEX’s Paul Peddrick and also featuring CEO and Co-founder, Jos Schaap, the webinar discussed the role of price automation, the advantages that automated Revenue Management will give hotels and how systems will evolve in the future.
Paul kicked things off by comparing the job of a Revenue Manager to that of a Stocktrader, in that they’re trying to predict the demand trend and where the price of a product (hotel room) should be. He added that, just like trading, any insights or clues as to what the future might hold are critical for their ability to price the product and that that is why data is so important to profitability in the hotel business.
“More and higher quality data, if handled correctly, better helps predict the future and aids performance,” Paul said. He added: “The best Revenue Management Systems (RMS) are the ones that are best at connecting to, and processing data, so that better pricing decisions can be made.”
Revenue Management originated in the 1970s within the airline industry and has been around in hospitality since the early 1990s. But the last 12 months have been previously unseen . From a ‘features and functions’ standpoint, it's interesting to look at how RMS are adapting to these times we’re living through and how the landscape is evolving from a software standpoint.
Cheryl Chavez explained: “The need for automation is one of the biggest changes we’ve seen over the last year. A lot of Duetto customers are now needing to do more with less and their ability to react to things that are happening in real time requires automation to be front and centre as part of their revenue strategy.
“The data has also evolved. With our customers, we’ve noticed that the need to rely on historical data isn’t helping them right now because it doesn’t represent what’s happening today, so they are having to look at shorter time frames and shorter windows of data, as well as looking at forward-looking data to help give them a sense of what could be happening out there as people return to travel.
“At Duetto we’ve been handling this with controlled automation. This allows the customer complete control over how much automation they want, giving the user a level of flexibility that works right for them.”
The panellists also discussed the fact that RMS has always generally been seen as a revenue enhancer, and when Paul asked what’s made it a ‘must have’ for hotels over the years, the answers were interesting.
Klaus Kohlmayr said: “After more than 30 years, I think we’re now entering the golden age of Revenue Management. The last year has been devastating for many industries all over the world, but it’s also given me a lot of confidence in the power of Revenue Management. I feel that its value is now being truly understood by the industry.
“The reason Revenue Management is so important is because of the need for automated Revenue Management decisions. You can’t run your hotel on Excel spreadsheets, especially when you’re remote and your hotel is running everything from a central location. Revenue Managers rely more and more on the sophistication of the systems to run their day-to-day pricing decisions. RMS are more powerful now and are able to maximise revenue, inventory and pricing all at the same time and really drive optimal decisions for hotels, independent of what occupancy levels hotels have.”
The webinar also touched on the idea that RMS is critical in the competitive environment particularly when there’s so much pressure in the industry right now because of COVID.
Michael McCartan commented: “To roughly illustrate how critical automation is, think about this: If you took a standard hotel with five rooms, and you wanted to assess the price for every second of today, for the next 365 days for those five room types, as a human you would need to make 157 billion pricing decisions. There’s no way that a human being could ever assess the market in which they operate to that extent and so the obvious conclusion is that you need artificial intelligence and data science to do that for you.
“The big factor that has changed things over the last few decades is that there is a much richer source of data available now and the technology and data science is vastly improved. So, if you combine the amount and richness of the data available, the technology available and the unpredictability of the market, you can see it brings us to a point in history we’ve never been at before and it’s a real opportunity for hotels to capitalise and change the way they and revenue manage their hotels.”
Jens Munch commented: “In the last 12 months we’ve seen a divergence between temporary trends and an acceleration of existing trends. We’re seeing the acceleration because we have a more complex than ever landscape of Revenue Management, we have fewer resources, and we have a gap between those two. Resources are being taken away from Revenue Management teams across the world right now because of requests from up high for operations to become more lean, but at the same time we have a situation where competition data is less relevant, because there are less systematic trends with everybody responding in tactical and not very rational ways and you have less historical data to deal with, so the one thing that remains and connects both of those is that we need technology, help and strong partners more than ever and we need to be more focused on advanced data. That difference in hospitality is very clear.”
Jos Schaap concluded by commenting: “It’s clear that now is a very good time to make sure you can automate your processes within the hotel marketplace and to invest in revenue management and automation around booking and upselling.”
Catch the Roomdex webinar here: https://www.roomdex.io/the-future-of-automated-hotel-revenue-management-from-4-top-rms-companies/