Only 10% of Hotels Practicing Revenue Management – HSMAI


Although no one can say definitively, industry consultants believe that only 10% of hotels are using revenue management to maximize their profitability. To saturate the market, revenue management tools are becoming more affordable.

“Affordability in analytics will bring Revenue Management to the level of a utility, a powerful tool for profitability,” said Patrick Andres, Managing Director for Asia for the Rainmaker Group at the recent Revenue Optimisation Conference hosted by HSMAI Asia Pacific in Singapore.

Rachel Grier, Managing Director, Asia for iDeaS Revenue Solutions, concurred with Andres saying, “Understanding information is critical. Hotels aren’t willing to invest in the suites of systems that enable them to do such analysis today. There is an investment involved in deploying big technology systems.”

“The guest experience is merging with technology, happening on the mobile phone,” says Bhanu Chopra, an entrepreneur and the CEO of RateGain. “When are hotels going to outsource technology? It is often a lack of skillset in the hotels that is inhibiting the use of revenue management systems. Service providers need to make the installation of their products frictionless as there is still a lot of manual input after the software is installed.”

Grier thinks that hotel owners and managers need to move the question away from what do I need to know to “What do I need to do?” changing their attention from looking specifically at days that change occurred to day-to-day change.

Andres says, “There’s no star power associated with Revenue Management yet. We need to get it from a support role to revenue-critical; it’s the most exciting part of making money for a hotel, but management doesn’t yet see it.”

Jeanette Ho, Vice President of Revenue Management and Customer Analytics at Fairmont Raffles Hotels International (FRHI), says “The problem is, its very complex. No one really knows what the Director of Revenue Management does or that they do it well. Business intelligence systems as they are, are good enough to do day-to-day pricing, but how do you make sure that you have the critical metrics in front of as many people at the hotel as possible? If the staff feel like revenue management is a collective decision, it will go a long way to helping overcome perceptions about the discipline.”

Michael O’Connell, SVP Business Development forLodgIQ argued that the barriers to entry to do revenue management for the smaller hoteliers were too high. “They need a simple, efficient dashboard, that looks as familiar to them as a phone, because design is important, to help them make informed decisions. That way, the 80% of hotels that are not served now can be served.”

Philip Niemann, Director of Customer Success APAC for Duetto, agreed with the notion that giving hoteliers more control and enabling revenue decision makers to save time meant new revenue management tools had to integrate with customer relationship management (CRM) tools to pull customer spend information.”

New revenue management tools are focused on end-to-end integrated solutions, but Grier argued that, “The reality is that hotels need something that is complex, almost to the extent of moving to an airline model of ownership of pricing, giving visibility to the way that commission for online travel agencies (OTA’s) is handled.”

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Founded by two travel and technology professionals with years of experience in Asia, Representasia specialises in sales & marketing representation throughout Southeast Asia for travel/hospitality technology providers and travel-related startups, as well as providing marketing consultancy services for hotels and travel businesses in the region.

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