Three ways pricing automation is evening the odds for independent hoteliers
Independent hoteliers are no longer contending with impenetrable brand resources when competing for rates, thanks to advances made in revenue management technology. Hoteliers often choose to operate independently thanks to the freedom to make their own decisions and act quickly in response to changes in the marketplace. However, this tradeoff comes with a lack of historical knowledge and available resources that brands bring to the table. Today’s revenue management technology is evening the odds, creating a more level playing field when it comes time for independent hoteliers to optimize rates.
The key to accessing gains typically seen by larger brands is through the emergence of pricing automation and its availability to independent operators today. The greatest barrier preventing independents from accessing revenue management benefits often lies in independent hotels’ willingness to experiment with technology and the perceived cost of pursuing such an investment. However, pricing automation is the true equalizer capable of stretching internal revenue management resources beyond what was previously possible, and independents who have made the commitment to this new technology have acclimated to today’s competitive climate.
Here are three ways pricing automation is evening the odds for independent hoteliers:
1. REDUCED LABOR REQUIREMENTS
While big chains have full teams dedicated to revenue management, independent hotels have been known to operate with just one revenue manager across a portfolio of properties – or even without a dedicated revenue manager at all. For these hotels, the opportunity to automate their pricing strategy could be their sole way to optimize revenue. For others, it could break down remaining barriers to reach profit optimization.
Independent operators share common challenges with the rest of the industry, from concerns their staff is being stretched too thin to the need to continue evolving while staying true to their unique vision. At these hotels, it’s easy for operators to see how additional opportunities exist for new avenues of revenue generation but believe they lack the means to implement them.
Unfortunately, this often-misguided belief often becomes self-fulfilling, and many of the smaller hotels, boutique properties, and independent operations that would benefit most from automated revenue management technology stick to doing things “the way we always have.”
2. EARN ABOVE EXPECTATIONS
Market forces are putting intense pressure on hotel owners to improve profitability today. While revenue management tools have a price tag, they’re some of the most effective means to improve the value or positioning of a property investment quickly. The increased revenue generation driven by these tools can free up further capital for additional improvements, create new avenues for better loan terms, and insulate your property against the unknown through resilient revenue-generating strategies.
“Market forces are putting intense pressure on hotel owners to improve profitability today. While revenue management tools have a price tag, they’re some of the most effective means to improve the value or positioning of a property investment quickly.”
Once in place, revenue management technology has a game-changing impact on hotel operations and efficiency. Small independents, backed by a well-informed RMS, can compete with the largest luxury hotels in their area based on accurate customer data and a greater ability to control costs related to revenue. For most hotels throughout history, this would be an impossibility. Thanks to technology, the competitive landscape is just even enough for independents to show what makes them great, speak directly to guests, and win on their own terms.
3. RETAIN INDEPENDENT FREEDOM
The tip of the spear for independent hotels is the control and freedom to experiment when they have access to revenue management technology. Branded chains have less flexibility when it comes to generating room-type configurations, corporate contracts, and group business. Brands have a strong playbook, but they stick to it no matter which way the wind blows. Independents who can leverage technology today have access to endless pricing possibilities for guests. These hotels can truly leverage current events to their benefit in a way no others can.
As revenue management technology advances, new affordable opportunities are quickly making it accessible. For the independent or small/select service hotel, having a revenue management tool in their back pocket will make the difference between moving ahead of the pack and being left behind.
