The automated revenue management system is a piece of software that enables travel and booking agents and hoteliers to handle revenue more effectively and efficiently.

FREMONT, CA: As people bid farewell to the year 2021, many of them were undoubtedly under the impression that the arrival of 2022 would bring an end to the ongoing strains of running an accommodation business during a global epidemic.

Although the forecast for 2022 is much more robust, there is still a great deal of market uncertainty, leaving many hotels, motels, and holiday parks unsure of the best pricing strategy to pursue moving forward. Room rates appear to be the one area where most small to medium-sized properties frequently make errors at the moment. Whether through infrequent rate changes or unreasonably low costs, ineffective rate management makes life more difficult for small to medium-sized business owners than it needs to be. Due to the growing popularity of Automated Revenue Management technology, small and medium-sized lodging providers can now enjoy all of the benefits of a full-time Revenue Manager at a fraction of the cost.

Avoid the Downward Spiral

Since the Covid-19 pandemic began, one of the most effective rates management trends has been the tendency for accommodation providers to lower prices to capture a more significant proportion of their market during periods of low demand. While this may appear to be an effective technique for increasing occupancy percentages in theory, it frequently results in a pricing war in which all lodging providers in the market suffer. Because an automatic revenue management system regularly monitors changes in market demand with occupancy, travel and booking agents or hoteliers can avoid selling rooms at rock-bottom prices unnecessarily.

Reduce Variable Costs

Lowering rates to increase occupancy is that it frequently results in much higher variable costs and profits. As a result, it is critical to balance occupancy percentages and average daily fees. Often, being wholly booked indicates that hoteliers have not charged enough for their rooms and will end up spending substantially more on cleaning and restocking. Automated revenue management systems are designed to maximize revenues, which implies maximizing the rate for each room, even if it results in a somewhat lower occupancy percentage.

Reduce time spent in the office

A revenue management system that is automated is precisely that—automated. This entails putting up the system, operating it, and not touching it again. Rates are determined using a set of minimum, maximum, and median values that serve as hard limitations for the rates generated. Competitors in respective areas are chosen to employ active revenue managers, so travel and booking agents can be confident that changes in market demand result from actual human decisions. This allows them to spend more time away from the office knowing that their rates are secure.