One of the hotel industry’s greatest strengths is its ability to shift pricing on a dime. Unlike residential or office leases, which are typically fixed and long-term, hotels can change the rates to which they sell anything on a daily basis. It’s why executives— especially during more challenging market times—refer to hotels as one of the great hedges against inflation.
Hotels, and vacations, for that matter, may be an elastic product, but savvy hoteliers, who understand the basic tenets of market supply and demand, usually come out on top: leaving a dime on the table should not be in the vocabulary of any revenue manager. Here’s the thing, like a piece of produce, hotel rooms are perishable, with an expiration date of 24 hours. Filling them at the right time at the right rate is crucial toward top-line financial success.
As technology has matured and evolved, and now, with the dizzying momentum of artificial intelligence, revenue management is as much about the people running it as the tech itself—some may conclude even more. To that end, there are a host of revenue management products out there helping hotels make the decisions that allow them to optimize rates across the board—from rooms and food and beverage to golf and spa. It’s no longer just about “setting it and forgetting it,” but using these robust tools to forecast demand, control room availability and length of stay, turn on rate fences and decide the best distribution channels to use in a given period. Smart revenue management even helps with staffing and making purchasing decisions.
There are myriad revenue management tools in the market, which can complicate matters: How does one choose? “Ultimately, it’s important to look at the hotel specifics to make the right decision,” noted berner+becker, a company based in Germany that hotels outsource their revenue management needs to. A smaller hotel, one with less than 100 or even 50 rooms and no food and beverage and caters to leisure transient, could opt for a simpler revenue management system with fewer layers than a larger hotel with hundreds of rooms that does lots of group business with heavy food and beverage and needs a more robust platform with multiple integrations. It’s not one size fits all.
Choosing five revenue management systems to highlight is no easy task. But we’ve come up with five we think check all the boxes to help rev up a hotel’s revenue.
1. IDeaS
HQ: Bloomington, Minn.
Hotel Partners: 30,000+
With more than 30,000 partner hotels across 164 countries and a 98% retention rate, IDeaS, which stands for Integrated Decisions and Systems, must be doing something right. The revenue management system was founded in 1989 with one clear mandate: to create a more impactful approach to revenue management and profit optimization. As one of the early adopters of the science of revenue management, it’s now looking forward, employing artificial intelligence and other tactics to optimize decision-making. “Empowering a user to unlock the potential of vast data sets, make more accurate demand forecasts and refine pricing strategies has positively changed the reality for revenue managers and hotel organizations, alike,” said Mike Chuma, VP of global marketing for IDeaS. “The next AI-driven seismic shift in revenue management will be how revenue managers interact with their systems and data in a business conversation. Moving from ‘access-based’ to ‘interaction-based’ will allow the revenue manager to ask and answer business-specific questions to help them execute more action-orientated strategies faster.”
2. Duetto
HQ: San Francisco
Hotel Partners: 6,000+
The Duetto story started in 2012 with the idea of simplifying distribution complexity and optimizing profitability through applications that increase conversion, guest loyalty, operational efficiency and revenue. Duetto’s suite of products seeks to generate and enhance a property’s revenue while also leading to higher profitability. It created Open Pricing to help hotels and casinos boost profitability by allowing dynamic rate adjustments. It created OpenSpace and pricing for Functions Space to analyze how multiple factors contribute to overall profitability. “We acknowledge that pricing transient, group and function space effectively and efficiently transmitting data across all of these areas within a single system significantly impacts total profitability,” said David Woolenberg, CEO of Duetto. When purchasing a RMS, hoteliers typically prioritize three key goals: capturing more revenue, driving profitability and ensuring accurate forecasting. “Our primary focus has always been on meeting the needs of our customers by exploring avenues to enhance their value, improve their performance, and generate increased revenue,” Woolenberg said.
3. FLYR
HQ: San Francisco
Hotel Partners: 2,000+
As chief advisory officer for FLYR for Hospitality, the hospitality line of business at FLYR, Andrew Rubinacci’s job may sound simple, but it’s one of mass complexity: how do you amplify customer commercial performance? Luckily, Rubinacci has a wealth of hospitality experience to draw from, with multiple years spent at companies including Aimbridge Hospitality and Omni Hotels & Resorts. He’s seen how the practice of revenue management has evolved to where it is today, which is to say “professionalized.” There are hotels that are still using Excel spread sheets, but it’s come a long way since. “Profitability and revenue are not the same thing. My mission statement is to drive profitable revenue,” Rubinacci said. FLYR prides itself on its adoption of AI-powered decision intelligence as a method to do so. “Before AI, nothing had really changed—as an industry we have had pretty static algorithms for 30 years,” he said. FLYR uses AI from the ground up, able to slice and dice data across multiple hotels. Before the end of the year, it said it will be able to use natural language. “When revenue management systems started it was a revolution; since then, it’s been an evolution,” Rubinacci said. “Now, we can do things we couldn’t even contemplate.”
4) RoomPriceGenie
HQ: Steinhausen, Switzerland
Hotel Partners: 2,500+
RoomPriceGenie is the ultimate family business. Not that it’s been passed down through generations; no, the impetus for it was a son seeing fault in his dad’s business.. When Ari Andricopoulos, founder & CEO of RoomPriceGenie, visited his father’s Bed & Breakfast in England, he noticed that the pricing wasn’t quite right: empty rooms or rooms filling up too early at too low of a price. Andricopoulos traded trading algorithms for financial markets for hotel revenue management and increased revenue by more than $50,000 in the first year at his dad’s establishment. What a good son! RoomPriceGenie is built for independent hotels with a mission to bring the best possible pricing with the least possible work. “With evolving technology, lower PMS integration costs and affordable SAAS models, revenue management technology is now accessible to more hoteliers,” said RoomPriceGenie CMO Thomas Landen. “As systems become more user-friendly and automated, hotel owners no longer need to invest significant time learning complex strategies. Instead, automated systems handle much of the work and make revenue management accessible to all hoteliers.”
5) Atomize
HQ: Gothenburg, Sweden
Hotel Partners: 500+
Leif Jägerbrand, the founder of Atomize, cut his teeth in a field that was fully automated in its approach—adtech. Imagine, then, when he learned that hoteliers set room rates manually: he was shocked. So, he started a revenue management system of his own that he believed fit the contours of the 21st century. The core focus of Atomize, which was founded in 2016, lies in maximizing revenues and profitability for hotels by automatically setting optimal room rates. Atomize embraces AI and machine learning, analyzing large datasets to make more accurate pricing recommendations, learning from patterns and improving over time. “Atomize excels in automating pricing strategies and optimizing rates in real-time without the need for constant manual intervention,” said Alexandra Fjällman, CMO of Atomize. Removing meddlesome humans is not the idea; in fact, Atomize uses a mobile-first approach for hotel managers on the go. Atomize’s RMS platform, Fjällman said, is designed to grow with the hotel, leveraging machine learning that continuously learns from market conditions. “Real-time pricing optimization can adjust room rates dynamically and in real-time based on market demand, competitor prices and other external factors,” she said. “It’s becoming essential.”
