By Jean Francois Mourier 
December, 2012

Revenue management is a seriously complicated process. There are literally hundreds of different factors that need to be considered in order to be as effective as possible in pricing each room. And these factors need to be examined on a regular basis, to ensure that rates change as the factors also change. Add to that, the data collection, manually updating rates across all of the online channels, strategy meetings with various internal teams, etc. Ugh. The list goes on and on, and on and on.
 
Humans can only do so much. There are only so many (working) hours of the day. We can only analyze one page of data at a time. And humans make mistakes; whether it's a typo or a mathematical miscalculation, it can cost a hotel thousands of dollars in lost revenue.
 
But that's what is so great about algorithms and technology. There are no costly mistakes. They can work all day and all night, collecting and analyzing data, offering specific rate recommendations and then updating the rates across all online channels. They don't require any breaks and can be easily supervised at any time from any computer or smartphone.
 
Unlike other companies who offer rate shopping tools or data reports, I believe that technology is much more than simply data.
 
Tools (a.k.a. revenue management systems) are what takes a revenue manager's job from impossible to possible (and successful!) in a short period of time. Revenue managers need a system to handle the minutiae of data collection and analysis, and the time consuming process of updating rates online. Data is fantastically useful, but unless you have the tools to use it effectively, it's just a bunch of numbers.
 
We're not saying that revenue managers will be replaced by technology. That will never happen - and we wouldn't want it to. Revenue management technology is important but revenue managers are even more important because they are ones who determine the strategy that the RMS should take, who develops relationships with OTA managers, who creates campaigns and who looks beyond data to make good business decisions that will earn a hotel more money.
 
Revenue managers are essential to the successful daily operations of a hotel, so if your property doesn't have a talented revenue manager, get one immediately! Once you've found a trustworthy and capable revenue manager, give your him/her the tools necessary to do the job more effectively: a sophisticated revenue management system. Having both will give your property the edge up over the competition, making it just good (business) sense.  

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Jean Francois Mourier is CEO and Founder of REVPAR GURU, a company that provides hotels around the world with an alternative revenue management software system designed to deliver maximum bookings and profits.  You can reach Jean Francois through www.revparguru.com or by calling 1.786.478.3500.