Marc Bertrand, Founder and CEORate Yield’s founder, Marc Bertrand, observed this gap in the market. Hardly 20 percent of independent hotels had advanced revenue management systems integrated into their processes.
Aiming to democratize the experience and benefits of this technology to every hotel, Bertrand built Rate Yield. He combined his passion for technology and revenue management experience gathered over the years working in different properties to create this advanced revenue management system for independent hotels.
Developed by revenue managers for revenue managers, Rate Yield is a SaaS-based, highly intuitive, and adaptable product that empowers clients to make data-driven decisions regarding the revenue strategies of their properties. This turnkey solution allows hoteliers to adopt automation and compete in the franchise-dominated environment.
The software adapts to the specific needs of hotels and regional scenarios, allowing clients to optimize their revenues irrespective of socioeconomic factors. Implementing this software is simple and starts yielding immediate returns. Clients can confidently integrate it into their processes and grow profits through dynamic pricing management overnight.
Automatic Pricing Optimization
The AI-powered software brings together information directly from the clients’ PMS in real time and adjusts pricing based on client-set parameters, ongoing booking trends, and market conditions. Instead of spending time and resources to compile reports in Excel or collect data from different sources to check the market pricing, they can focus on strategic revenue-generating activities.
Rather than training AI to learn the historical trends of a property, Rate Yield’s flexible and customizable algorithms are configured in just three onboarding sessions, allowing an immediate return on investment. Rate Yield’s algorithms look at the market dynamics through an innovative approach to competitive sets and hotel performance to define the final advised price. The software uses the hotel team’s knowledge and insights to build winning strategies based on their goals.
The AI-based system updates rates in real-time for 365 days to ensure clients never miss out on reservations and maximize the revenue potential for any future date. The software also sends reports to client inboxes daily to provide them with all the information and visibility into their operation at their fingertips. Hoteliers can remain confident in their pricing strategy. “As opposed to historical data, our solution focuses on market dynamics and hotel performance to determine the best prices for attracting customers and driving maximum profitability,” says Bertrand, founder and CEO, Rate Yield.
Rate Yield also enables honing room-type-specific strategies to drive the highest revenue at all levels. While it is standard in the industry to set price differentials for higher category room types, Rate Yield allows for dynamic management of these variations. Differentials can be set in fixed price or percentage formats and defined by day of week, month, or season. Allowing this flexibility means that hotels are selling the right room to the right client for the right price at the right time. Additionally, the percentage differentials allow compressed hotels and markets to capture slightly more revenue from clients with a greater willingness to pay.
We automate all the redundant tasks of revenue management, like compiling reports and competitive rate shops, to free up significant time for clients to focus on their strategic decisions and to drive better guest engagement and experience
Results Speak for Themselves
In the case of a recently onboarded five-star hotel, the impact of Rate Yield was immediate. Within 12 hours, the increased revenue, attributed to the launch of the RMS, paid for the full-year license. Without a system in place, prior to selecting Rate Yield, the hotel manually yielded rates through a laborious process that often involved meetings and discussions. By eliminating the opportunity for bias, as well as the constant optimization of pricing, the hotel immediately received dividends on the solution.
In another case, a 90-room corporate hotel in Joliette, Quebec, introduced Rate Yield into their revenue management strategy to eliminate biases and break through the ceilings they had set. Immediately after the software integration, the client noticed a significant impact on their average daily rate (ADR), particularly on weekend rates.
Rate Yield increased their ADR by double digits in a market that typically sees a hike of two to six percent annually, depending on the season. Their occupancy rates also increased despite the rising prices. Rate Yield also simplified the task of maintaining rate integrity and effectively competing in the right market. This was particularly crucial since the hotel was not located in a major tourist hotspot or a bustling business hub, requiring distinct and tailored market strategies to achieve the best results.
Today, they take a flexible and dynamic approach to selecting a wide array of hotels for competitive sets and weigh them appropriately by day of the week.
Case Study
When offering a service, it is common to be asked to provide an estimated return on investment. These estimates are often based on industry standards. For example, revenue management systems are said to have an ROI between 5 to 20 percent. However, given the volatility in recent years, it is difficult to attribute the growth in occupancy or ADR solely to a revenue management system. Since it is impossible to measure the success of a revenue management system in a vacuum, Rate Yield has studied the performance of its clients in Montreal as a weighted average against the Smith travel research (STR) data for the same market. Using this data set, the company can establish the variation in performance of Rate Yield hotels against a widely accepted benchmark.
To say that the Montreal market is experiencing high ADR is an understatement. When comparing ADR growth on a monthly basis, the market experienced an average growth of 18.42 percent from August 2022 to July 2023 compared to August 2021 to July 2022. Rate Yield clients in Montreal saw an average ADR of 32.22 percent for the same period. Its clients recorded an average ADR of $14.12 higher than their market benchmark.
Regarding occupancy rates, Rate Yield’s algorithm is not consistently designed to maximize occupancy. Its revenue management team works with client hotels to define strategies that align with their business needs. Given the difficulty in staffing experienced by the market, many clients have opted to increase ADR over occupancy, resulting in slightly lower growth than the benchmark (47 percent average occupancy growth vs. 49 percent for the benchmark).
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As opposed to historical data, our solution focuses on market dynamics and hotel performance to determine the best prices for attracting customers and driving maximum profitability
This analysis shows that Rate Yield clients outperform the benchmark within the same market. From growth to performance metrics, they are seeing great results and have the flexibility to achieve different goals according to their needs and budgets.
Rate Yield makes it easy to maintain rate integrity and compete with best-fit and flexible pricing strategies, and a high level of service post software deployment complements its credibility. A hundred percent retention rate and the company’s rapid growth testify to its effectiveness and value delivery. A solid, loyal client base built through word of mouth without spending significant money on marketing is evidence of its capabilities.
Committed to delivering the highest-level assistance post-deployment, Rate Yield continues to bring more support and sales expertise to the team. The company plans to expand its footprint in the coming years through integrations with leading Property Management Systems and Channel Managers like Opera Cloud, Mews, Maestro, Siteminder, Amadeus, and more.
Taking client feedback and acting on it is at the heart of Rate Yield’s mission. It has recently launched an integration module to automatically export data and send it directly to STR, saving valuable time on redundant revenue management tasks. On the roadmap are improved dashboards and reporting, length of stay restriction management, and a number of timesaving features requested by their loyal client base.
With a strong passion and deep understanding of revenue management at the core of the company, the sky is the limit for Rate Yield.
