A new hotel business model has arrived, one that will continue to expand and grow through the coming years as the online channel continues to increase in importance and prevalence. Hotels are being pummeled by the economy, and the hospitality industry is suffering in every corner of the globe. The cornerstone of this new business model is the pricing and revenue management sector. Revenue managers are no longer using historical data to determine the pricing of their hotels; rather, they are using revenue management systems to compare a particular property's rates with others in the same destination and continually update the rate, automatically and in real-time, to ensure that it is offering the best rate at the right time, even to customers who book at the last minute.
Here he comes to save the day
Jean Francois Mourier, a former trader, financial analyst and director for top European financial firms, saw this shift in the hotel business model while working at two boutique hotels in Miami Beach, Florida and created the first integrated revenue management and pricing solution. The algorithm-based solution gave dramatic results - occupancy increased from 63% in 2003 to 96% in 2004, and has remained at 98% year round since then despite the recession, with steadily increasing average room rates and revPAR which positioned the hotel as a leader in the market.
The future is here
So in January 2008, along with his colleague and 25-year veteran of the hospitality industry, Bruno Perez, Jean Francois founded RevPar Guru to provide the Yield Dynamic Price & Distribution Engine, the most comprehensive online pricing and sales intelligence system, to others in the hotel industry.
Proof is in the numbers
The general manager of Hotel Twentyseven in Denmark, Christopher Alm, signed up with RevPar Guru in October 2008 because he saw the potential that it offered for his revenue managers, giving them the time to spend on detailed fine tuning in pricing strategies and driving business in need periods rather than the daily mechanics of opening and closing room types and channels. And his investment paid off - the hotel has experienced revPAR increases of 39.9% this year using the solution when compared to their competitive set.
Survival of the fittest
This shifting business model has brought the hotel and hospitality industry into the 21st century and, hoteliers must embrace these new changes. By accepting the new revenue management pricing methods and moving on from the tried and ineffective historical method, every hotel can make it through the recession and be ready to compete and thrive in the post-recession travel marketplace.
For more information on RevPar Guru, please visit www.revparguru.com or to find Jean Francois' tips on how to properly implement a new revenue management system, please contact Jennifer Rodrigues at jrodrigues@thinkinkpr.com and 305.749.5342 ext. 234.
About RevPar Guru
RevPar Guru provides hotels around the world with an alternative revenue management software solution, to manage revPAR intelligently and effectively, and deliver maximum profits. RevPar Guru's custom-designed Yield Dynamic Price Engine meets the rapidly changing needs hotels in a demanding business environment - dynamic rate optimization, real-time pricing, integrated internet and extranet yield channel management, and GDS sales distribution, to increase a hotel's revPAR while maintaining rate integrity and automated rate parity. It is the only revenue management solution that automatically optimizes and updates hotel rates across all major consumer travel websites, based on all market variables and in real time, and provides a strategic room inventory control. Once deployed, hotels can boost their occupancy rates and cut their distribution costs dramatically. Headquartered in Miami, Florida, additional information can be found at www.revparguru.com or by calling +1.786.478.3500.
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