Automated Revenue Management: Why it's Important

The automated revenue management system is software that allows travel and booking agents and hoteliers to manage revenue more effectively and efficiently.

FREMONT, CA: Although the forecast for 2023 is much more potent, there is still a big deal of market uncertainty, leaving many hotels, motels, and holiday parks uncertain of the best pricing technique to follow moving forward. Room rates seem to be where most small to medium-sized properties often make errors. Whether through irregular rate changes or immoderately low costs, ineffective rate management makes life harder for small to medium-sized business holders than it requires. Because of the increasing popularity of Automated Revenue Management technology, small and medium-sized lodging providers can enjoy all of the advantages of a full-time Revenue Manager at a fraction of the cost.

Avoid the Downward Spiral

One of the most effective rate management trends has been the tendency for accommodation providers to lower prices to capture a more significant proportion of their market during periods of low demand. While this may appear to be an effective technique for increasing occupancy percentages in theory, it frequently results in a pricing war in which all lodging providers in the market suffer. Because an automatic revenue management system regularly monitors changes in market demand with occupancy, travel and booking agents or hoteliers can avoid unnecessarily selling rooms at rock-bottom prices.

Reduce Variable Costs

Lowering rates to increase occupancy is that it frequently results in much higher variable costs and profits. As a result, it is critical to balance occupancy percentages and average daily fees. Being wholly booked often indicates that hoteliers have not charged enough for their rooms and will spend substantially more on cleaning and restocking. Automated revenue management systems are designed to maximize revenues, which implies maximizing the rate for each room, even if it results in a somewhat lower occupancy percentage.

Reduce time spent in the office

A revenue management system that is automated is precisely that—automated. This entails installing the system, working it, and not touching it again. Rates are defined using a set of lowest, leading, and median values that act as hard constraints for the rates caused. Competitors in corresponding areas are selected to use active revenue managers, so travel and booking agents can ensure that market demand modifications follow actual human decisions. This permits them to spend more time away from the office, learning that their rates are secure.