The world of revenue management has come a long way from its airline beginnings. With new developments and technology, what was once reserved for the multi-million dollar airline companies and huge hotel chains, is now available to managers of even the smallest serviced apartments.
Getting your prices right and maximising your revenue has never been easier but just why should serviced apartments be using revenue management? Isn’t that reserved for hotels?
Absolutely not! Read on to find out exactly why you should be using revenue management software even for your vacation rentals.
1. To Gain Expertise
Larger hotels have decades of experience in the industry and bring with them an ability to read and act upon changes in the market. They also employ specially trained revenue managers with a long history of experience to help them make smart pricing decisions.
Serviced apartments and holiday lets, to the scale they are currently running, are relatively new to the world of hospitality. With companies such as Airbnb enabling anybody to become a property manager to their very own place, it should come as no surprise that there is a gap in expertise.
By using data from all around you and smart algorithms to process the information, revenue management software (RMS) will ensure you are pricing dynamically and competitively without needing decades worth of experience.
2. To Save Time
While larger hotel chains have more employees with more time to dedicate to revenue management, serviced apartments are often a one-man army, with limited resources and even more limited time.Â
Automated revenue management software is able to analyse and update your pricing regularly with minimal input from yourself or any of your team. Using RMS will alleviate a huge amount of your time and give you the freedom to invest more of it back into your business.
3. To Manage Pricing
If you only have one or two rooms, then you can use one of the many AirBnB software providers to get market demand-based pricing. This is great, and we would recommend it.
But if you have 4 or more apartments in the same area, you will need something more sophisticated. If you have one apartment you need to find one booking party to rent it. But if you have 5 apartments, you need to attract 5 potential groups.
The basic AirBnB software can’t optimise for this. But fear not, RoomPriceGenie specialises in real-world solutions on a budget, meaning you don’t have to break the bank to get great pricing. With a low cost revenue management system on your side, you could be maximising your revenue without forking out. Start your FREE trial!
4. To Differentiate
Serviced apartments may be relatively new to the market, but there’s still a lot of competition. With such a young yet booming industry, you have a great opportunity to steal a march on your competitors.
By charging less when you need to take business from others, but boosting your prices when you know there is high demand, you have a great opportunity to beat the competition.Â
5. To Maximise Revenue
Last, but perhaps most importantly, using revenue management software will help you boost your revenue. It’s pretty hard to say no to more money right?
Recently, we conducted a case study on just how much extra revenue can be made using revenue management software and it’s pretty hard to argue with the numbers. Using a selection of nine properties with as few as 4 rooms, our clients saw an average increase in revenue of 22%.
So, in conclusion, we would argue that it makes very little sense not to be using revenue management tools. When you could be increasing revenue, saving time and giving your property the competitive edge, we can’t really see a single reason not to invest in revenue management software.
Still unsure? We had a chat with revenue management expert and Director of Masters at Les Roches Global Hospitality, Scott Dahl about why revenue management is important for serviced apartments and vacation rentals. Watch the video below to find out more and be sure to get in touch with one of our team here at RoomPriceGenie if you’d like to find out more about how our software can benefit your serviced apartment.Â
RoomPriceGenie: Why is revenue management important to vacation rentals?
Scott Dahl: I think vacation rentals, if you’re talking about individual vacation rentals, or even if you’re talking about people who have apartments that have become more and more common in terms of use for short term stays, to basically directly compete with hotels with a different product…I think that the one disadvantage they have is that they are just learning how to sell their rooms a couple of days at a time. Typically they are pricing at least for a year, where hoteliers have experience pricing day-to-day.
So even a hotelier that doesn’t have a lot of great tools, is at least going to have much better experience than someone who is managing vacation rentals, some Airbnb’s or any of those kind of things. So I think that it would give them a fantastic way to get caught up to the people they have decided to compete against. And not have to make all the mistakes that hoteliers had to make over the last 20 or 30 years learning revenue management. They kind of get a jump start and catch up with us. I think that’s where it would most come into play; they can act like hotels quicker without having to make all the mistakes hotels made to learn how to act that way.
