Regardless how much revenue management systems (RMS) cost they all have a severe handicap… garbage in, garbage out. Booking data is collected nightly, data is ‘crunched’ and a predetermined set of rates act as a pricing guardrail. If you are currently at $149 and your system thinks you should raise rate, you will get a recommendation to go to your next higher rate level of $179, if that is what you have built into your pricing structure. If you set the next rate at $189 that would be the recommendation and here we stumble across the reason why your revenue management system is handicapped. Set your rates wrong, and while your system recommendation may be directionally accurate, your rate will never be truly right… and you will always leave money on the table.
You invest time daily reviewing your reports, pricing recommendations, then you override the rates. You know you do. The very system that is supposed to save you time actually eats your time while you correct its mistakes. What should your system do differently?
In a perfect world, your RMS would serve as a single version of the truth… one combined view of everything you truly need to make well informed pricing decisions. You need to see your rate, the lowest competitive rate in the market, which direction the pricing is heading in and what the market will actually be priced at. With all that information and insight, your pricing decision would be made simple. Powerful. Market share stealing!
Today, Fare-1-1 serves as your single version of the truth. We offer the Lowest Daily Fare in your market (organized by hotel star rating and length of guest stay), a Market Fare Forecast (organized by same parameters) and the pricing trend (which way is the market pricing moving?).
If your rate is set at $149 and the Lowest Daily Fare in the market is $159 you might feel a sense of comfort undercutting the competition. What you probably don’t know is the market is trending up, and the Market Fare Forecast predicts your competition will be at $199. This means you are not leaving $10 on the table, rather you are actually leaving $50 on the table. Per room night. If you recover $50 on just 10 room nights per week (5 rooms sold Friday, 5 rooms sold Saturday) that translates into an incremental $24,000 per year for your property (pure profit). You can recover a lot more money than that.
Once you set your rates, you’ll need to focus on other things… you can’t spend all day obsessing on just rates. Set your rate Alert and when any piece of the equation changes you’ll be the first to know… just by glancing at your email.
Your RMS doesn’t do that. Fare-1-1 does that.
Stop wasting time, stop leaving profit on the table.
Please feel free to join the discussion by leaving your comments, or contact me directly at email@example.com. Sign up for a free trial at Fare11.com today, and visit us on Facebook.com/nopricegaps.