When it comes to hotel pricing, all eyes are on the revenue manager.
The hotel’s owners want to know what you’re doing to increase the average rate.
The general manager wants to know why your rates are higher than the competitor’s across the street.
And sales wants to know why you won’t offer a bigger discount to secure that group booking.
As the revenue manager, how do you build confidence in your decisions and help others trust them too? It comes down to five habits of successful revenue leaders.
1. Stay on Top of Demand Data
To price confidently, you need to understand the key factors that affect room demand. This includes:
- Historical performance. Demand patterns are often surprisingly consistent year over year.
- Current performance. Rooms on the books, booking pace, ADR, and average booking window all signal room demand and pricing power.
- Market conditions. Holidays, events, conferences, economic conditions, and travel trends can all influence demand.
Together, these signals create a clearer picture of future demand, helping you decide when it’s appropriate to raise rates, hold steady, or stimulate demand with targeted promotions.
By staying on top of demand data, you can assure stakeholders that you’re not just growing ADR, but you’re also balancing rate and occupancy to maximize revenue.
2. Know Your Competitors
Your GM isn’t the only one comparing your rates with competitors. Travelers compare pricing and features across OTAs, metasearch platforms, and direct booking channels.
Benchmarking rates and availability across a broad competitive set can provide valuable insight into market demand and price sensitivity.
To position your property effectively, you need to understand its strengths and weaknesses relative to competitors. Rather than simply matching their rates, focus on your own demand patterns, objectives, and competitive advantages.
When your rates reflect both market demand and your hotel’s pricing power, you can confidently explain why they may differ from competitors and why matching or beating the hotel across the street isn’t always the right strategy.
3. Learn to Trust Your RMS
Demand changes constantly, making it almost impossible for revenue managers to stay on top of every pricing opportunity manually.
A revenue management system (RMS) helps by aggregating and analyzing large volumes of data to automate forecasts, pricing, and inventory controls.
However, colleagues may question recommendations they don’t understand. If your RMS operates like a black box – providing little visibility into why rates are changing – you’ll struggle to explain those decisions to others.
The best revenue tools are transparent. They explain the factors driving pricing recommendations, whether it’s stronger pickup, rising occupancy, or increased market demand.
These insights become valuable learning tools for the whole team. When everyone understands the factors driving pricing recommendations, revenue management becomes less of a specialist function and more of a shared mindset. Owners, the GM, and the sales team can make decisions that better support the hotel’s overall revenue strategy.
4. Automate Pricing, but Own the Strategy
As capable as modern revenue systems may be, they can’t replace revenue strategy.
Much like on an aircraft, a flight control system automates routine functions, but it’s still the pilot who flies the plane. Likewise, it’s the revenue team that drives pricing strategy.
The revenue manager translates that strategy into automated decision-making by configuring the RMS. Depending on the system, settings may include:
- Occupancy and ADR objectives
- Minimum and maximum rates by room category
- Pricing flexibility and rate increments
- Promotional parameters and restrictions
- Comp sets and competitor weightings
If pricing recommendations appear illogical or aren’t producing the desired results, it may be because settings haven’t been updated to reflect changes in strategy.
Again, transparency is key. Modern revenue systems should identify settings that may be limiting revenue potential and provide clear guidance on how to improve results.
This gives the team the confidence that automation is supporting strategy, not replacing it.
5. Commit to Continuous Learning
When all eyes are on you, you need to stay on top of your game.
That means keeping informed about industry trends and technology through trade media, conferences, webinars, local tourism partners, and professional networks.
Take advantage of learning opportunities offered by your RMS provider, including tutorials, webinars, performance reviews, and educational content.
And take the time to share key learnings with colleagues across the hotel. When front desk, housekeeping, operations leaders, sales, and marketing better understand revenue principles, confidence spreads throughout the property, helping every department make better day-to-day decisions.
Confidence Is Contagious
Hotel demand will never be completely predictable, but that doesn’t mean pricing decisions should feel like guesswork.
With reliable pricing and demand data, transparent pricing tools, and a commitment to continuous learning, you’ll be better equipped to make confident decisions.
That applies whether the owner is questioning your ADR, the GM is fretting over competitor pricing, or sales is pressuring you for a lower group rate.
And confidence is contagious. When colleagues understand the reasoning behind pricing decisions, they’re more likely to trust the process, embrace a revenue-first mindset, and stay focused on the shared goal of maximizing revenue.
With RoomPriceGenie’s recent product update, understanding your pricing just got a lot easier. When you click any date in your pricing calendar, you’ll see a clear explanation of what’s driving that price and any settings that may be limiting revenue potential. Find out more.
To learn how RoomPriceGenie can help your property increase your property’s profitability, start your free trial of our automated pricing solution today!
