The life of a hotelier has never been easy. But especially in the new world we live in today, doing business isn’t getting any easier, right? Sometimes, it feels like the job of a hotelier turned from a guest-facing hospitality provider to a role where you are behind your computer all day long trying to make sense of data. Rest assured, this is not the world we believe you should live in. We believe that seamlessly integrated, easy to use technology is vital and will make your life easier and your business more successful.
May we introduce:
RoomRaccoon & RoomPriceGenie
You must have heard the saying: “Great minds think alike!” – we leave the aspect of greatness up to you to decide, but the new partnership between RoomRaccoon and RoomPriceGenie is one where two companies share the same mindset. Both, at RoomRaccoon and RoomPriceGenie, we live to build solutions that make your job easier. Hoteliers all over the world use RoomRaccoon and RoomPriceGenie because we focus on building usable technology for the not so large properties out there. You don’t want to have the same system as a 250 room hotel. You need something simple, transparent and effective. And that’s what we do.
In this article, we will help you find an answer to the following questions:
- Who needs a Revenue Management System
- The steps to revenue management
- How does the partnership between RoomRaccoon and RoomPriceGenie help
Who needs a Revenue Management System?
Do you have a hotel? If so, then you would greatly benefit from a revenue management system. It’s that simple.
But this is a totally new development. One that was only made possible by the emergence of open and forward-looking property management systems like RoomRaccoon. And with it being something new, many small hotels are understandably nervous about starting.
Usually, there are three main reasons why hotels are afraid of revenue management systems (RMSs). They think they are too complicated to get started with, too time-consuming to maintain and too expensive to have. Let’s get this kind of thinking out of the way. At RoomPriceGenie, we have built a solution that everyone can manage, maintain within only 15 minutes a week and get for the price of a cup of coffee. So how about you skip buying one coffee a day and instead increase revenue by 15 percent? Sounds like a nice deal? (And no matter if you buy your coffee from McDonald’s or Starbucks, we have the right solution for you).
Just this summer, coming out of the lockdowns, we started working with a new client who themselves thought that they were too small for an RMS.
- Fewer than 20 rooms
- No dedicated Revenue Manager
- Manually adjusted rates every now and then
In a time where many hotels lowered their prices because they were scared of low occupancy and really bad business, RoomPriceGenie decided on a different strategy. Fully taking care of the next 3 months of pricing, the system only slightly decreased rates. And as soon as the late bookings came in, the prices went up. In many regions of the world, there were weeks and months this summer where business was still good. Only the booking behavior was different. Our client here increased revenue by 12% versus the same time last year. Not too bad for a summer where all seemed lost.
We have heard hundreds of stories like this. And why is that? It’s because revenue management in one form or another is something that every hotel needs. No matter if you have 20 rooms or 200 rooms; reacting quickly and correctly to changing demand and supply makes you more money. But you need to find the right solution that works for you – one that you fully understand.
The steps to revenue management
Revenue Management is not an all or nothing decision, and there is no one size fits all solution. It is much more of a journey than anything else.
Step 1: Weekday or Seasonal Pricing with Special Dates
A hotel may start with flat pricing – all days the same. But often they will then move on to weekday based, or seasonal pricing. This could mean that the prices are the same for a whole season. Or could mean that every Monday is the same price, and that price is different from every Saturday. This is great in that it reflects seasonal and weekday demand but does not take into account either any changes in expected demand or how many rooms the hotel has left to sell.
They may then also put higher prices on special dates when they know they will be busy.
This approach made sense in the times when it was harder to get information, but guests now compare many hotels on price and value on the online travel agents. And those that have not got dynamic pricing are losing out.
Because of that, we see a lot of hotels that have moved onto Step 2.
Step 2: Active Manual Pricing
As soon as people realize that they are losing out, they know that they have to do something. In step 2 is where hoteliers usually learn the most and start to embrace the idea of dynamic pricing. It usually starts with two things: (1) they reduce prices as the check-in-date approaches (2) they are more aware of what other hotels in their area are doing. Your weapons for this fight are usually a spreadsheet for calculations and the OTAs for data.
It is not unheard of that people in Step 2 to spend hours over hours manually looking up competitor rates on the OTAs to then note them in an excel file before they start thinking about how this could affect their own rate. To get the data quicker, hoteliers may look at Rate Shoppers or tools provided by their OTAs. Most widely known is Booking.com’s RateIntelligence tool which was discontinued on 30 November. In general, this process is extremely time consuming, driven by emotions and a job that you never feel like you got everything done. With all the help provided, you still need to calculate yourself what your price should be.
Step 3: Semi-Automatic Pricing!
At RoomPriceGenie we know that it is difficult to trust a robot to make prices for you. But also that Step 2 is very difficult and time-consuming,
So we introduced something that takes a lot of the work out of manual pricing but leaves you in full control. It is a Daily Price-Recommendation Email – it checks all your competitors for you and then looks at how many rooms you have left to sell and suggests the optimal price to sell your rooms at.
By only showing you your biggest action points, you can use the benefit of the recommendations while a) knowing why we recommended it and b) checking every price before you put it into your PMS.
You can sign up to try this email here without obligation or cost.
Step 4: Full-Automatic Pricing
But the manual work of setting prices is still a struggle. And this struggle above calls for an upgrade! When you are comfortable with dynamic pricing you will want the best option, both in terms of time-saved and revenue. At RoomPriceGenie we provide you tools that give you full control of the pricing but take care of the heavy lifting of data analysis for you. We do all the calculations for you and then automatically put these prices into your RoomRaccoon. We look 365 days into the future, making sure that you never miss a beat. For us, this is about providing you automation technology with a simple user interface where you feel empowered, even if you have no previous pricing experience.
Find out more about RoomPriceGenie on our website RoomPriceGenie.com
And how do RoomRaccoon and RoomPriceGenie now make Room for Revenue Management?
Flashback: do you remember how 5 years ago, Channel Managers were something new and not everyone used them? And today, having a technical solution to manage your channels is the most common thing in the world? And would you want to go without it? If you fast forward 5 years, this is how you will look back on revenue management systems. Check the steps above and see where you are. And then maybe try taking the next step.
RoomRaccoon has made all this possible. We have spent the last months building a seamless integration between our two systems. This means that you can let RoomPriceGenie do all the pricing calculations. Then, if you want to, RoomRaccoon can automatically be updated with the prices calculated by RoomPriceGenie. This is awesome because you do not need to put in any manual work anymore.
Soon you will realize that revenue management does not have to be complicated and expensive. With the right tools, revenue management can be fun .And who does not like to have some fun while making extra money?