When you have the right information, getting the results you want is made much easier. For hoteliers, getting the right information was, and in some cases still is, a laborious process. It can be an expensive one as well, because the less technologically savvy a property is, the more profits they’ll lose to competitors.
There are few processes as technologically demanding as developing your pricing strategy. If you’re not able to get the right information, it’s likely that your pricing will be off kilter from your comp set. You could also lag behind because your RMS misses a crucial data point. With advancements in RMS technology, more and more properties are adopting business intelligence enabled RMS to both make their pricing strategies more efficient, more agile, and more accurate. Here are a few ways that business intelligence optimizes your pricing strategy.
One of the most transformative ways that BI is optimizing pricing is by dynamic rate setting. A BI-enabled RMS can adjust pricing in real time. Therefore, if demand is high, rates will automatically go up, and vice versa. This flexibility enables your property to be more competitive and increase occupancy. In the future, your RMS software could integrate with sales and marketing to send out targeted campaigns to the appropriate guest segments based on fluctuating demand. Kristi White, Rainmaker’s Vice President of Deployment, says “Ultimately, you’ll make different rate decisions when you understand how you’re pacing against last year, what your distribution mix looks like, and how much of your business is group business. Based on those results, you’ll know whether to proactively focus on transient or group business.”
Dynamic Comp Set Monitoring
Another way that BI improves pricing is by dynamically updating your comp set’s pricing. Since so much of your property’s pricing strategy depends on an accurate assessment of your comp set, being aware of where they’ve set their room prices in real time is critical. With BI, your hotel’s pricing adjusts not only based on your own occupancy, but on that of your comp set as well. For example, if vacation rentals and other properties are experiencing high occupancy levels, your BI-optimized RMS would automatically raise your rates.
Manage Your Distribution Channels
Hotel owners and managers know the joys and pains of utilizing multiple distribution channels. While it’s more likely that you’ll generate more bookings through OTAs and other third parties, you’ll also lose a hefty percentage of your rate to acquisition costs. With business intelligence, not only can you determine whether you’re getting a reasonable rate of return on your investments into your booking channels, you can also use historical booking data to find out when to invest more or pull back. A high caliber, BI-optimized RMS can instantly collect and analyze data by specific OTAs, locations, time periods, and more so that you’ll always have the most accurate information at your fingertips.
Hospitality revenue management is thankfully moving towards more sophisticated and automated pricing, which means that there will be countless opportunities for revenue generation. The industry is evolving from piecemeal, disparate systems to total integration. To stay in the game, you’ll need an RMS that can keep pace. If you’re interested in more intelligent and efficient ways to optimize your pricing strategy, contact us today!