By Jean Francois Mourier 
November 5, 2012

We all watched as Hurricane Sandy, dubbed Frankenstorm by the media, pounded away at the North Eastern US, causing massive floods and serious damage. She caused many problems for the travel industry as well: flights have been cancelled, stranding travelers for days. Everyone's plans were scattered in the wind.
 
But as I watched the footage, I couldn't help but wonder about the effect that the storm had on hotels around the country. Hotels in New York, New Jersey, Delaware (basically anywhere that was seriously impacted by the storm), were most likely experiencing unexpected occupancy. On the flip side, many major hubs in the country were seeing an increase in travel as return flights to affected areas were being cancelled. Hotels in these areas were experiencing high demand at the last-minute from stranded travelers.
 
Either way, hotels around the country were faced with a very unpredictable market. The question that kept resonating in my mind was this: "did the hotels plan for Hurricane Sandy by preparing their room rates for the unexpected, as they would stock up on water and supplies for guests during a hurricane?" Unfortunately for the hotels, most would answer no.
 
Hurricane Preparedness 101
A hurricane can incapacitate your processes, losing your hotel valuable revenue. What would happen if your revenue manager were stuck at home because of flooding? What would happen if you're using in-house technology and your power goes out?
 
The only way to truly be prepared for a hurricane (or any other unexpected event) is to use a revenue management system that will survive any situation unscathed. Your revenue management system must be hurricane-ready, meaning it will still continue to function even if your office is flooded or if it loses power. Ideally, a hurricane-ready system will be web-based and will have multiple back-up servers to ensure that there will always be at least one left managing your property¹s rates even during a Frankenstorm.
 
Hoteliers should ask their revenue management companies whether their system is ready if another hurricane hits tomorrow. I know we are.
 
Historical Mess 
In today's volatile market, hotels must start planning for the unexpected to happen every day, making historical data alone insufficient as a basis for determining a hotel's rates. Imagine if meteorologists used only historical data to predict this year's hurricanes' would we have been able to predict Sandy's impact based on the storms we experienced last year? Doubtful.
 
The same thing applies for historical pricing on hotel rooms, but unfortunately most RMS companies rely on historical data to provide recommendations on rates. If hoteliers were looking at last year's data to decide how to price their rooms on October 29 (when Sandy hit), their rates would have been completely inconsistent with the reality that they were faced with. The same goes for the recession and any other unpredictable situation.
 
The only way to be prepared to face the unexpected, is to use a revenue management system that is adaptive and reactive, one that collects and analyzes data hundreds of times a day 24/7 in order to predict the best rate to increase bookings. As the environment, the supply/demand, rates of the competition, etc. changes, a sophisticated RMS will adjust accordingly. These systems are forward-looking, not historical based, and will account for the real economic, social and meteorological conditions facing hotels and their customers each and every day.

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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.