Even before the pandemic, hospitality revenue management systems (RMSs) were not perfect. Many revenue leaders have long felt RMSs weren’t keeping pace with platforms in other industries, to say nothing of the increasingly robust consumer technologies we enjoy.
COVID-19 has only made the problems worse. As revenue professionals have been forced to do more with less, the weaknesses in their RMS platforms have become untenable for many. As a result, many revenue leaders are reevaluating their RMSs and the entire tech stack, looking for better solutions to meet their rapidly evolving needs.
To start, the shifting realities of revenue management have created new priorities and new must-have features for any RMS. These are the priority features that revenue leaders from across the hospitality industry identified:
Affordability: Budgets are still tight, and that won’t be changing anytime soon. In fact, this is part of a trend that predated COVID and has only gotten more pronounced, which makes cost-effectiveness a top priority for any RMS.
“Leadership has looked for immediate opportunities for savings,” said Eric Gravelle, vice president of revenue management for Diamond Resorts International. “Is it slashing a program we’ve been using that looks like a luxury item? The number of people performing analysis? We’ve been hit hard with that.”
Resilient forecasting: Forecasts are broken. We heard that from our expert sources time and again. “The RMSs having most success use multiple forecasts,” said Timothy Wiersma, CRME, principal of Revenue Generation LLC. “They’re not placing their bets on just one forecast, but they’re playing multiple algorithms to come up with a forecast and then tracking the results for accuracy.”
Native multi-property functionality: More hotel companies are shifting to clustered and centralized models for their revenue teams and need an RMS platform that is purpose-built for that dynamic. “Most RMSs were designed for one-property directors of revenue management,” said Dax Cross, CEO of Revenue Analytics. “But there’s not many of those people left anymore. That was true before the pandemic and is doubly true now.”
GM orientation: Because general managers are the ultimate decision makers at the property level, your RMS also needs to feel accessible and useful to them. “You’re asking GMs at limited-service properties to do things like configure overbooking by room type,” said Jennifer Schneider, vice president of revenue optimization for the Americas for Radisson Hotel Group. “It’s complicated, and the training is complicated. Now more than ever, we need a better way because of GM turnover.”
Profit optimization: Another trend that the pandemic has intensified is the shifting focus from revenue optimization to profit optimization as it’s become even more important that every dollar counts. “All of our Revenue Optimization Advisory Board meetings recently have revolved around profit optimization,” said Nicole Young, CRME, senior corporate director of global revenue management for Rosewood Hotel Group and chair of HSMAI’s Revenue Optimization Advisory Board. “It’s absolutely critical.”
Flexible reporting: In a turbulent, ever-changing environment, your RMS has to deliver centralized, accessible, easily digestible information to revenue and nonrevenue professionals alike. “With revenue managers overseeing more hotels and the increased scrutiny over what they need to stay on top of,” said Sean Lynch, vice president of revenue management for Graduate Hotels, “it is not sustainable to log in to six to seven separate systems to get the data — future market, competitive pricing, pricing recs, group data, etc. — to piece together what you want to do. There needs to be a single place for this data to reside.”
User experience: The consensus among the experts we talked to is that RMS platforms aren’t easy to use at a time when they really need to be. Things take too many clicks, implementation is too painful, and training is too hard. “We work in a hotel, right?” said Terence Sham, head of revenue management for Ace Hotels. “It shouldn’t be that complicated. If it’s that complicated, then it’s not that intuitive.”
Adapted from The New RMS: A Buying Guide, a white paper from HSMAI and Revenue Analytics.