Has the UK hotel industry now fully embraced revenue management technology?

The past decade has seen the art of revenue management completely transform the UK hotel industry.

The ability to price dynamically in an increasingly competitive market and maximise profits in a sluggish economy has pushed revenue management to the top of the hotelier’s agenda.

In the lead up to our hotel technology special issue in February, in which we will be running a major feature on hotel revenue management, Hotel Industry Magazine asked some of the industry’s major technology providers a single question:

Industry View: has the UK hotel industry now fully embraced revenue management technology?

The answer to this seemingly simple question is complex. It is both yes, and no. The reality is that the industry remains fragmented, with some areas investing heavily in revenue management; others not.

For IDeaS Revenue Solutions’ Cheryl Hawksworth, a divide has opened up:

“The UK hotel industry, as with hotel industries in many other countries, is seeing a Great Revenue Management Divide between the hotels that ‘Have’, and the hotels that ‘Have Not’, embraced revenue management technology.”

Revenue management technology is a way for hoteliers to close that divide and make better use of time in strategic planning and operations.

Economic Climate

The cost savings and revenue increases that this technology can bring are more important in the current climate than ever before.

“One of the comments is that hotels don’t need a revenue management system in the current weak economic climate,” explained Infor EasyRMS, Niels Mekenkamp. “But what is forgotten is that in down times it is even more important to have a good revenue management structure and strategy in which a revenue management system is crucial.”

For Anand Medepalli at JDA hotel performance during the recent Olympic Games is a good example of how the industry needs to more fully embrace revenue management. An early spike in prices forced hoteliers to make steep cuts at the last minute, leaving unsatisfied customers and a significant amount of money on the table.

“Had hoteliers made better use of revenue management principles, they could have avoided this kind of erratic ‘boom and bust’ attitude to pricing, which can impair revenue generation in the long run,” explained Medepalli.

“If hoteliers are to avoid making these mistakes again, they must embrace revenue management to help to forecast optimum room rates and to provide valuable insight into overall demand, in order to make other hotel business functions more efficient as well.”

Industry View: has the UK hotel industry now fully embraced revenue management technology?

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