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08/09/2022

The Connected World: How Post-Pandemic Technology Trends are Enhancing Revenue Management

The time for revenue managers to maximize rate has come, and they can use technology and trends adopted by hotels and travelers throughout the pandemic to provide better information and act on it faster than was previously possible.
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Amid high and rising gas prices and other economic pressures, travelers are still expected to hit the road this summer and fall. This is likely attributed to leftover cabin fever from two years of lockdowns and uncertainty. Still, regardless of the reasoning, nearly 48 million Americans took road trips of 50 miles or more during the 4th of July. This is a good indicator of the strength of the upcoming fall travel months, but during this period, a hotel’s success will continue to be driven by rate, not occupancy, and operators need to leverage technology to return to profitability.

This is even more important to consider because leisure travel continues to be the main driving force behind U.S. hotel performance. According to STR, just 17 percent of hotels are experiencing rate declines today compared to 2019. As recent as July 30th, STR found that while occupancy was down only 3.8 percent compared to 2019, with average daily rates hitting $158.32, up 18.3% percent, further strengthening is occurring against the same period before the pandemic.

The time for revenue managers to maximize rate has come, and they can use technology and trends adopted by hotels and travelers throughout the pandemic to provide better information and act on it faster than was previously possible. Today, we will look at some of these technologies and how hotels can leverage them to make this an unforgettable summer and fall.

  1. Immediate Access

Guests are done with waiting; they want to get right into their stay. While some travelers will opt to visit the front desk on arrival depending on the property, the vast majority have quickly adopted the contactless check-in technology that was frequently requested prior to the pandemic. Today, a hotel stay officially begins during the booking process. With this in mind, hoteliers have an opportunity to maintain contact with guests from the moment they start shopping for rates and even after their stay concludes.

This level of connectivity is immensely valuable as a tool for better understanding traveler needs. By examining the requests travelers provide to hotels through digital communications channels and maximizing their overall experience, hotels can position themselves as market leaders and command better rates within their competitive set. It will also contribute to creating an environment that allows for attribute-based pricing, whereby travelers can pick and choose the elements that are included with their booking, which are then reflected in the overall rate.

Providing immediate or contactless access to the hotel guestroom and other areas has a relatively low impact on a hotel’s technology stack. Still, hotels may require investment to gain data insights from these interactions and bake these findings into their revenue strategy. Most importantly, such a strategy is impossible without every system in a hotel joining the same network. This brings us to our next trend.

  1. Dynamic Pricing

One of the rising innovations taking off in hotel revenue management is the growing sophistication of overbooking controls, which provides hotels control over excess bookings and cancellations to fly as close as possible to 100 percent occupancy consistently. It’s possible to execute this strategy using advanced revenue management technology to examine guest booking trends in real-time and quickly adjust for discrepancies.

This technology has revolutionized the way hoteliers approach the available pool of traveler bookings and enables them to attain peak levels of occupancy which were previously out of reach. The challenge in executing such a strategy comes from the Revenue Management Systems’ (RMS) need to access information possessed by the Property Management System (PMS), such as available room types and amenities, among other factors. More importantly, an intelligent system can account for unexpected discrepancies, historical shifts, and other surprises without impacting the hotel’s ability to operate.

This requires a full 360-degree view of a property’s operating fundamentals, which is not easy to obtain without a connected system running underneath. These connections are important because, without them, hotels will be stuck fighting for the lowest room rate without considering the rest of a property’s potential value.

  1. Uniting Internal Hotel Systems

Last year it was clear that for hoteliers to succeed, it was necessary to adopt a strategy of total profit optimization. To do so, they began seeking ways to gather data from all corners of a hotel ecosystem, allowing booking data to be informed by guest requests at the property level. This helped them grow revenue beyond the hotel guestroom.

Getting to this point has taken some time. Still, after spending two years overcoming sputtering demand and worker shortages, operators have a renewed interest in finding new ways to do more with less. Many operators have taken steps to ensure all systems within the hotel are connected and able to share information, allowing fewer hands to be required on deck to manage day-to-day operations.

Once the hotel PMS is connected to the revenue management system, operators gain insight into the hotels’ potential profitability and can make snap decisions to increase short and long-term returns. These hotels can fully manage the reputational side of hospitality while ensuring guests are getting the best possible rate.

Additionally, connecting these systems allows for a more harmonious inner tech stack, particularly when making future changes and additions. Operators should not have to jump through multiple hoops to get a complete picture of the marketing, sales, and operational systems related to the property’s revenue strategy. Operators also deserve the freedom to make nimble decisions and act on short-term findings. The best way to do so is through a fully connected commercial strategy that brings all internal systems under one umbrella.

  1. Tapping Into Big Data

In-depth data analysis has changed the way hoteliers approach the guest experience. Predictive analytics is actionable today in hospitality when accounting for guest booking trends and activity once travelers are on property. Finding ways to peel back the onion around guest behaviors is one of the best ways for hotels to attain total profit optimization, thanks to the return in the viability of ancillary services.

Ancillary revenue has been one of the missing pieces in the hotel profitability bubble over the past two years. Finding ways to recover this revenue is one of the most pressing goals for revenue managers today. Room revenue may be up, but hotels can’t rely on it to recoup the losses of the past two years. Hotels need to approach this new era with fresh eyes to understand how to price based on the availability and interest in ancillary amenities, from spa services to F&B and even local tours.

While this marketplace is starting to look a lot like the one hoteliers were familiar with before 2020, it comes with a number of technology caveats. Essentially, every trend that was looming on the horizon before the pandemic is now overhead. Technology trends are likely to accelerate throughout the current business cycle, and it benefits hoteliers to rethink their tech stack to make accessing data easier as the process of taking on new technology and strategies becomes second nature.