The hotel industry has undergone significant changes in recent years, especially in the area of revenue management. Vacation hotels are facing specific challenges due to factors such as the crisis in tour operation and the evolution of tour operators towards the use of dynamic rates. To meet these challenges and maximise their performance, vacation hotels should consider implementing a Revenue Management System (RMS).
In this article, we will explore the reasons why resort hotels need to work with an RMS, highlighting the benefits of managing individual bookings versus tour operation rates and taking advantage of technological advances in the industry.
The crisis in tour operation and the importance of adaptation
The bankruptcy of Thomas Cook in 2019 left a deep mark on the travel industry. Vacation hotels, which traditionally relied heavily on tour operators to fill their rooms, were directly affected by this situation. Exclusive reliance on tour operator rates has become less and less sustainable, as hotels need to diversify their revenue sources and increase their capacity to adapt to changes in the market.
In this scenario, the implementation of an RMS becomes essential. An RMS enables resort hotels to control their inventory and pricing strategies, allowing them to quickly adapt to changing market conditions and optimise revenues. By working with an RMS, resort hotels can adjust and customise rates based on real-time demand and supply, thereby maximising their room yields.
The shift towards dynamic rates and the need for flexibility
The evolution of tour operators toward the use of dynamic rates has altered the landscape of the hotel industry. Hotels now have the opportunity to set prices according to actual demand and adjust them in real time. However, to take full advantage of this strategy, it is also essential to have an RMS in place to constantly monitor and optimise rates based on demand and market conditions. Flexibility in price management is essential to maximise revenue and maintain a competitive advantage in the marketplace.
An RMS enables resort hotels to analyse and understand demand in real time, allowing them to intelligently adjust rates and optimise revenue. With an RMS, hotels can use advanced algorithms and predictive analytics to set optimal prices based on a variety of factors, such as historical demand, competition, local events and market trends. This ability to adapt and respond in real time provides a competitive advantage and helps hotels maximise revenue.
RMS technology advancements and their benefits
Advances in RMS technology have revolutionised the way in which resort hotels can now manage their revenue management. Modern RMS systems allow KPIs to be viewed per person, rather than per room, providing a more detailed and accurate view of each guest’s performance and profitability. This helps hotels better understand the individual value of each guest and make informed decisions on pricing, promotions and customer relationship management.
In addition, the most advanced RMSs offer features such as minimum stay management (MLOS) and quota management. Minimum stay management allows hotels to set minimum length of stay requirements, which helps to maximise occupancy and avoid losses due to short stays. Quota management allows to control room availability according to different market segments, optimising room allocation and avoiding overselling or underselling.
In conclusion, and as I mentioned at the beginning, vacation hotels are facing unique challenges in the hotel industry, such as the crisis in tour operation and the shift towards dynamic rates. To maximise their performance and adapt to these changes, it is critical that resort hotels work with an RMS that allows them to take control of their own revenue management strategy, manage individual bookings, adapt rates in real time and leverage technological advances to optimise their performance and improve the guest experience. By implementing an RMS, resort hotels will be better equipped to meet current and future market challenges and maximise revenue.
