The Future of Hotel Revenue Management

Close your eyes and imagine what the hotel industry will be like in a year…  in five years… in 20 years.

What will hotels look like? Will hotel operations have changed drastically? Will value still be the primary factor for consumers when booking a stay? Will flagged or boutique properties be more popular? Will the technology that we use today still be used in the distant (or not-so-distant) future?

When I dream, here’s what I imagine the hotel industry will be like in the future:

It’s in the cloud

In recent years, there has been a huge interest in cloud-based technology in all facets of our lives. From Salesforce to Dropbox, we are all very familiar with the benefits of cloud technology: cost-effective; saves on electricity; info is accessible from any computer, at any time; and direct, real-time information transfer.

So it only makes sense that cloud-based hotel technology will be the next big thing for optimizing hotel operations. While most hotels today use a physical, on-site PMS, I predict that over time, we will see cloud-based versions of all operations systems: PMS, channel manager, RMS, etc. in most properties worldwide.

Which brings me to my next prediction…

Reservation delivery & automatic inventory control

The logical next step from making our operations technology more effective and more accessible is to ensure that all systems are integrated in real-time to prevent double bookings and other inventory management issues. Because the number of sales channels will most likely also increase exponentially over time, this will be an important feature in a property’s future PMS to help revenue managers perform more effectively.

In the future, a property’s PMS will link directly to the property’s various booking channels ­ both through OTAs and direct — and into the CRS. Obviously, this will save the reservations team a great deal of time; instead of having to manually update each reservation, new reservations will be delivered automatically into the CRS and will update the inventory available across all sales channels in real-time. This feature will go a long way to ensure that rooms are available for each customer who walks through the doorŠ or callsŠ or books online, and that a property will not overbook their rooms.

Going hand-in-hand with all this automation, is my third prediction…

Dynamic Pricing

This is a topic that you’ve heard me speak about many times, and in the future, hotels will realize the importance of truly dynamic pricing.

Today, the majority of properties use fixed rate pricing of some type: some update daily, some weekly and some seasonally. Unfortunately, not enough properties update their pricing in real-time as market conditions, demand, consumer booking habits, external influences, inventory, etc. changes. With time, it will become standard for every hotel’s RMS to collect and analyze data, offer the right rate at the right time to encourage additional bookings, and then update the price across all online sales channels, automatically and in real-time. This will happen every minute of every day in every hotel around the world, and hotels will see a big difference in the number of bookings and the revenue earned from the online channel after implementing dynamic pricing.

So there you have it, my top three predictions for what the future of the hotel industry holds.

The most important thing to remember when considering all of my predictions is that the future is already here! Every single one of these technologies is already available in today’s market, even though most hoteliers aren’t aware of their existence (or often their importance).

Seize the day and bring the future into your hotel today.