Real-Time Pricing: Myth Or Reality? - By Jean Francois Mourier
Over the past few years, as the number of revenue management-related companies has grown exponentially, so has the prevalence of the term real-time in marketing messaging.
Let’s make this perfectly clear: real-time does not mean once a day. Real-time does not mean twice a day. Real-time does not mean once an hour. No. Real-time means IN REAL TIME, meaning on an ongoing basis, not just occasionally or infrequently.
Yet for some reason, companies insist on claiming that their systems operate in real-time. Hmmm… strange. Obviously, there is a misunderstanding about what the term actually means.
Never fret, I’m here to clarify. In the revenue management industry, prices update across the various channels once a day. Some may even offer price updates a few times a day. But the problem with this is simple: a lot can happen in four hours… and even more can happen in 24 hours. Big groups can cancel their room block, freeing up hundreds of rooms that won’t be sold until the next inventory/pricing update happens. There could be a local issue that causes rates to plummet or skyrocket at the last minute. So if your rate is only updating every four hours, you could be missing out on four hours worth of revenues that a real-time system would have been able to secure for you.
Yes, real-time systems do exist. Algorithm-based systems never stop analyzing and updating rates for a property so they can be considered to be working in real-time. These sophisticated revenue management systems will collect information 24/7 as factors change, updating inventory automatically and will make pricing updates at least once every ten minutes.
Let’s not forget other important factors. Monitoring of a property’s rates and the environmental/destination changes that can have a big impact on pricing should also be happening in real-time. Algorithmic systems can detect when the competition has dropped or raised their rates, and can adjust your rates accordingly IN REAL-TIME.
It comes down to this: the more frequently your hotel’s rates are being updated, the more effective that your revenue management system will be. And the more effective your system is, the more money that you earn.
Is your system really in real-time? Or have you fallen victim to the myth of so-called real-time systems?
Jean Francois Mourier is CEO and Founder of REVPAR GURU, an intelligent online solution that provides hotels around the world with an alternative revenue management software system designed to deliver maximum bookings and profits, as well as the convenience of full automation and integration 24/7. As REVPAR GURU's custom-designed Yield Dynamic Price Engine is the only real-time revenue management system available on the market, it meets the rapidly changing needs of hotels looking to increase their competitive advantage in an increasingly difficult marketplace. REVPAR GURU’s system offers dynamic rate optimization, real-time pricing, integrated internet and extranet yield channel management and GDS sales distribution, to increase a hotel's RevPAR intelligently and effectively, while maintaining rate integrity and automated rate parity. Since 2004, smart hoteliers worldwide have used REVPAR GURU’s software system to increase occupancy, average daily rate (ADR) and RevPAR.
To learn more about REVPAR GURU, please visit www.revparguru.com or call +1.786.478.3500. Follow REVPAR GURU on Twitter, Facebook, LinkedIn or YouTube.
- Demystifying the Magical Pricing Potion - By Jean Francois Mourier
- When Did Your Comp Set Die? - By Jean Francois Mourier
- What Not to Do in Revenue Management - Part 2 - By Jean Francois Mourier
- What NOT to Do in Revenue Management Pt. 1 - By Jean Francois Mourier
- Tour Operators: Whos in Control? - By Jean Francois Mourier
- Rate Parity: The Battle to Determine How You Buy Hotel Rooms - Chicago Tribune
- Competitive Hotel Pricing in Europe: An Exploration of Strategic Positioning
- Why Now is the Time for Hotel Owners to Leverage Revenue Management - By Trevor Stuart-Hill
- How Two Hotels Groups Are Taking the Data-driven Road Less Travelled - By Pamela Whitby
- HSMAI, Duetto Release White Paper on Open Pricing