Consider these 3 factors when selecting the best technology for your Revenue Management capabilities

In a hyper-transparent hospitality landscape, finding a way to differentiate yourself is critical to the future of your business. Beating the competition entails growing your Revenue Management (RM) capabilities and deciding whether off-the-shelf or custom-developed RM systems provide the greatest value to your chain.  When making this decision, it’s essential to consider features that drive revenue for your hotels and grow with your brands over time.  With thoughtful consideration, it quickly becomes evident that bespoke Revenue Management solutions outperform off-the-shelf software to provide hospitality chains with the best fit, the right features, and ongoing flexibility to deliver long-term profitability.

Let’s consider three critical factors when selecting the best technology for your Revenue Management capabilities:

  1. Fit - A RM solution is tailored to your pricing philosophies, inventory strategies, management processes, staffing models, and system interfaces. Since your enterprise has technologies, practices, and structures specific to your chain, a RM solution must be precisely synchronized to each of these facets of your organization to operate at the highest potential.
  1. Features - As your team leverages RM technologies, it’s important to have access to top-tier functionality that synchronizes mathematics with required capabilities in a simple and intuitive manner. Solving these needs begins with PhD analytics to segment customers, forecast demand, optimize prices, and make complex inventory decisions. The analytics are then supported through screens, reports, alerts, and automation that provide hotels with simple methods to interpret and act on analytics. Finally, a RM system should align directly with the information required by your organization to communicate with key stakeholders and support strategic decision making.
  1. Flexibility - Change is inevitable! You may notice fresh patterns of customer behavior or shifts in economic conditions. Perhaps you’ve enhanced your property management system, upgraded your central reservation system, or modified your RM philosophy. How is your business poised to keep up with dynamic technologies and the latest analytics? All these uncertainties have implications that trickle down to your RM software.

While off-the-shelf software has many advantages, including lower upfront costs and established functionality, it fails to meet the true criteria of discerning RM leaders. For example, there may be a long integration period, poor fit to your chain’s technology ecosystem, or limited features which force tradeoffs and sacrifice profitability. When enhancements or bug fixes are needed, your voice gets lost in the crowd of the provider’s other customers. Even if an enhancement is completed, the competitive advantage is short-lived because the updates will be immediately shared with competitors who use the same software.

Developing custom RM solutions in-house can alleviate many of the concerns with off-the-shelf software but also carries risk. There are unknowns with a brand-new solution; your teams might not have the expertise to develop and maintain the software, and you may not have the mathematical proficiency to develop and support leading analytical models.

As a result, the ideal approach to delivering the best RM capabilities is to build custom software and partner with an experienced firm that can help you avoid the risks of developing solutions on your own. This strategy will leverage your partner’s expertise to select the mix of features that offer the greatest value to your brands. By working with a skilled organization, you also gain the peace of mind that the functionality of your solution includes analytics built with mathematical rigor, and features delivered by software developers who are battle-tested in the hospitality industry. As your solution needs to change and mature, an engaged partner will be highly responsive to your requests, ensuring that your RM capability remains aligned with your business as it grows over time. What’s your next move? Contact us today.