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Test Driving Revenue Management Solutions


What Can You Expect & How It Will Benefit Your Hotel

By Rachel Grier, Asia-Pacific managing director, IDeaS Revenue Solutions


The sleek silhouette of a vehicle effortlessly manoeuvres through a winding mountain pass. It accelerates into the distance – leaving a spray of mist from the dewy road. In the background, there’san advertising voiceover talking through the car’s key features and encouraging you to test drive it today. It’s tempting, but will the car live up to its hype? Will it counter the myths you’ve already heard from others?


Many Indonesian hoteliers wonder the same thing about investing in some of the technology systems they know about. Will a PMS operate as effectively as an industry article said it would? Do you really need to be in the cloud? Will revenue management actually pay for itself and how can the system actually help generate profits?

To better understand a key operational technology such as revenue management, it is the perfect opportunity for Indonesian hoteliers to take virtual test drive and put some of the myths to the test:


Myth:We don’t have any issues manually setting our rates, so we don’t need a revenue management system.


Many hoteliers operate with a heavy reliance on online travel agents (OTAs) and tactical “flash” sales.With constantly changing booking patterns, it’s nearly impossible to manually identify trends from hotel’s booking history. This makes it difficult for hotels to recognise changes in demand and react in time to make higher profits. In such a high-speed environment, manually collecting, evaluating and calculating data via Excel spreadsheets is not only a tedious process, but it’s also time consuming and highly susceptible to errors.

It’s simply not possible to compile all of the data points required to provide meaningful forecasts and pricing decisions across a manageable time frame. By the time the data is aggregated and analysed,any identified opportunity will have likely passed.

This is where revenue management software and automation can make a huge difference. Through  algorithms, calculations and machine learning, revenue management systems automatically assess hotel performance on a daily, weekly, monthly and annual basis. Revenue managers can use highly visual dashboards and reports to quickly compare rooms sold and revenue against data at the market segment and total hotel level for the next year.

The system provides regular, updated reports; some systems extracting data up to four times a day. This gives revenue managers and hoteliers a clear vision of their data, bringing more accuracy and consistency—versus gut instinct—to the forecasting and reporting process. The increased business intelligence and accurate granular forecasting makes it easier for revenue managers to determine correct pricing, optimise demand and increase revenue across their property or portfolio.


Myth: I need a dedicated on site revenue manager to use a revenue management system.


The rise of the mobile consumer isn’t the only trend impacting a hotel’s operations today. Hotel staff are also becoming more mobile. Revenue managers can be responsible for multiple properties across multiple time zones – including those who regularly travel for work and are away from their office environment for extended periods. There is a critical need to access their pricing systems at any time of the day and from any environment.Where past hoteliers and revenue managers needed to make pricing decisions at their desks in the beginning of the day, it is now possible to make decisions on the go through mobile applications.

Revenue management apps help enhance productivity for hotel personnel by providing critical demand forecasts and rate analysis including historical behaviors, seasonal patterns and recent trends that can all be acted upon.Based in the cloud, with online syncing to any mobile device, mobile revenue management apps ensure that hotel personnel responsible for pricing decisions are never offline. Mobile access to key metrics and rates also presents an opportunity to capitalize on time-sensitive opportunities, as well as involve a wider management team in accessing KPIs. Revenue management mobile apps mean that revenue managers are empowered to make informed pricing decisions anytime, anywhere.


Myth: A revenue management system is too expensive and only used by large global hotel chains.


It’s important for any hotelier to operate prudently and not spend beyond their means. As revenue management solutions have been widely adopted by larger hotel chains and properties for success, this can sometimes lead smaller or independent operators to maintain a misconception around the real cost of the technology and the ROI they can expect. Many leading revenue management providers work with budget and midscale hotels in both city and resort locations all over the world.
Additionally, there are also entry level technology platforms for hotels looking to start their revenue management journey, such as pricing system technology that focuses setting and distributing the right rates to the right guest at the right time.


Myth: My hotel is still under construction; I can’t consider revenue management until I have been operating for at least one year.


Many new hotels struggle to reach their optimal revenue potential due to poor pre-opening preparation and a lack of clarity around in-depth pricing strategies to address varying and often fluctuating market demand and conditions. It is no longer enough to build a great property, ensure the rooms are nicely decorated and have staff in place to service potential guests.  An integral component to the pre-opening process should be considering the optimization of room type configuration, as well as the implementation and integration of revenue management technologies with the hotel’s IT infrastructure and platforms from the very start.

There are many areas of revenue management that must be considered throughout the pre-opening phase of a hotel – ranging from establishing market segment revenue and sales strategies, undertaking comprehensive competitor evaluation, pricing research, pricing processing and forward planning of market demand cycles. It is also important that properties follow a structured, standardized approach to pre-opening to ensure consistent and effective results from day one.

To ensure that hotel revenues are maximized, hotels under development should conduct a strategic hotel analysis that includes a study of the micro market and overall economic factors that could affect the hotel’s performance. They should also finalize a competitor analysis, including competitor value and benefits positioning.

Hotel pricing structures should be based on market conditions, hotel positioning and should include established channel strategies according to product positioning and market environment in order to cement “product positioning” (i.e. hotel descriptions, room type descriptions, etc.) through all channels.

Over the years, a vast amount has been discussed in the hotel industry regarding revenue management. To help increase awareness and foster better understanding of the benefits a revenue management system can bring to your property, there is only one way to determine if this leading technology is the right fit for your hotel. So go ahead, take it out for a test drive and see for yourself.




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