Managing the revenue is a crucial thing to do for any hotel, because without such a thing no hotel will be able to track the number of clients, check out how many bookings are available, as well as keep an eye on the profit. With revenue management each hotel manages to bring promotions into the mix, while also making sure that continuity is not a problem. Revenue management includes a wide range of responsibilities that include things such as mobile pricing strategies, as well as brand protection and price manipulation, all with the main purpose of getting more clients. However, the future of revenue management can be a little hard to understand and direct, but with enough commitment and attention, nothing is impossible. In this post we will focus on how complex and challenging it can actually be to optimize your revenue, get better returns and increase profit for your hotel.

Data collection


Despite the fact that revenue management might be a straightforward practice, it’s surely far from being easy. There are numerous revenue management technologies that hoteliers use, such as Ideas, Duetto Research, IDeaS and others, all of which were successfully integrated into the day to day life of hotels and imbued numerous powers when it comes to increasing their profitability.


Big data has grown tremendously, but with it, it’s now very easy to make the hoteliers get a glimpse inside their market. There’s lots of information to be had here, which includes things such as regional pricing trends, the historic prices, competition and so on. Moreover, the introduction of sophisticated performance measurement tools also make the process of tracking the hotel performance fast and seamless, which is really cool. Despite these amazing facilities and tools, how are the OTAs still eroding the hotel margins? The idea seems to be that despite the advanced revenue practices, hotels are still failing to see the results they want, which is truly unfortunate to say the least.


There are a few defining factors that seem to contribute to the margin erosion, and one of the major ones is the continual growing of metasearch that was initially seen as being a great way for hotels to earn more business from OTAs. Unfortunately, this seems to be better from the OTAs instead of hoteliers, which is a shame. Moreover, the CPC metasearch channels are very difficult for the hoteliers because they can have a very hard time making them to work, but OTAs do this in a natural fashion. This is why hoteliers need OTAs in order to bid in an optimal fashion, because without them the hoteliers will face higher costs or lower results, depending on the situation.


In addition to the metasearch, another reason is the slower uptake of the RMS technologies being implemented by the OTAs. This happens because only a few of them can actually bring flexible pricing by length of stay, and thus revenue management is underperforming. The main idea is that when OTAs are using cached pricing, the hotels will not be able to implement a set of advanced techniques that will improve their profitability and reach amazing results in the end.


The last reason here is definitely rate parity. This is a continual issue in the world of hotels that want to have full control over the price margins. OTAs come with automated tools that help get the best results, so it’s very hard for a hotel to actually bring special prices into the market and promotions without circumventing the system and using tools that might be overlooked in one way or another.

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