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The future of revenue management – part 2 of 2

  Posted in Revenue Management

Revenue management is essential for any hotel today. In part 1 of this blog, we took a look at some of the developments, complexities and challenges today’s hoteliers face in the bid to optimise their revenue and returns.
In this final part, we will explore three recommendations for hotels to regain some of their lost margin and learn how to maximise the impact of their revenue management techniques:

1. Fight for direct business – it’s possible for you to win!

Most independent hoteliers will be hard-pressed to consistently win business from OTAs in pure CPC-style auctions. More and more Metasearch channels, though, are giving hoteliers CPA/commission options and a guaranteed share of clicks. Two great examples include TripAdvisor’s new Instant Booking product and HotelsCombined’s hotelier program, both of which offer participating hotels a more secure revenue stream.
It’s not just about Metasearch, though: hoteliers should be prioritising any channels (social media, for example) where they can get more guests looking to make their booking directly on

2. Prioritise channels that give you better revenue management opportunities

The more closely a channel can emulate the pricing strategy you’ve constructed in your RMS, the better it is likely to be for your bottom line. Therefore, if an OTA affords you an easy way to yield reduced prices for longer stays, and if it is possible to configure offers and packages without jeopardising your business across other OTAs, then this presents a great opportunity to boost your margins.

Market managers at some OTAs can even provide you with data to help instruct your decisions: typically they can provide information such as how a new package is likely to boost conversion, average lead times on reservations, and more.

3. Choose right-sized technologies for your hotel

Though RMS technologies like IDeaS and Duetto provide some extremely powerful tools to hoteliers in the fight to improve margins and occupancy, pricing may well put these systems out of reach for many. Even if your hotel can afford the product, it’s important to ask yourself: will my hotel be able to make optimal use of this?  Would a simpler, lower-priced product – like a PriceMatch – be a better fit for my revenue management team?  This is a hard question for many hoteliers to ask themselves, but it is important to be introspective and honest about how much time, need, knowledge, and money you have to commit towards stronger revenue management.

So, what does the future hold?

Clearly, the travel and hospitality industry has a long way to go before hotels can truly begin to retake some of their lost margin – but things are looking up. At SiteMinder, we have a few things in the pipeline to help us prepare for a future where hotels will be able to manage a greater depth and breadth of pricing strategies across all of their sales channels.

Real-time, pull-based interfaces have been a direction the industry has been slowly heading for some time now, and these not only improve OTA interfaces by pulling smaller chunks of ARI (Availability, Rates, and Inventory) on a need basis, but also by allowing technology solutions like SiteMinder to manage more revenue management on our side. Cached pricing requires a single price send to an OTA on a given night, but if an OTA is querying us in real time as a guest browses the site, we can dynamically generate a price based on the conditions at the time of the search.

Other development include deeper integrations with all channel connections – OTAs, CRSs, PMSs, and RMSs alike – so that SiteMinder solutions can speak to those systems in a common language while maintaining all of the cleverness of each individual player.

Buckle up – it will be an exciting few years to come for revenue managers!




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