Summer is in full force here in Minneapolis, and we love to make the most of the opportunity to get outside after a long, harsh winter. During a recent afternoon on the lake, I watched some sailboats competing against each other. And that got me thinking about the similarities between competitive sailors and revenue managers.
In a regatta sailboat race, sailors compete along a defined route that subjects them to all sorts of challenges – shifting currents, oscillating breezes, sudden gusts of wind, wakes created by other boats, and so on.
Competitors plan their strategy based on information they gather right before the race is about to start. Like other sports, sailors plot a route and consider their strategy, understanding the relative specifications of their boat (how streamlined their boat is and how it performs) and how they expect the environment and their competitors to behave. These tactics may need to be adjusted when forces unexpectedly change– currents, weather, or competitor activities may create or change the forces at play.
And more external forces are at play than ever before.
For hoteliers this means facing similar issues in the race towards share dominance and profitability. These forces constantly impose the need to course correct as quickly as possible. Many of these forces are surprisingly adjacent. When there are large changes in a hotel’s business, such as large group cancellations, inflating prices, new short-lead event announcements, and last-minute pick-ups, revenue leaders have little time to re-analyze and update their spreadsheets, make fresh decisions, and execute on these decisions to capitalize on the new market conditions. Just as quickly, competitor properties also race to make the same adjustments. These changes are required to avoid lost revenue by selling the remaining inventory to the right guests at the right price and time.
How can technology help hoteliers during rapidly changing conditions?
Most revenue tools offer simplistic approaches that simply re-run business rules. These rules are often retrospective, meaning they will react as they start to see conditions change or require heavy user intervention to steer them in a new direction. Even with an automated revenue management system designed to react to changing business conditions, there may be a need to adjust strategy quickly before the next update is due.
On-demand Optimization is the newest addition to the IDeaS G3 Revenue Management System (RMS), and it ensures business leaders remain confident that their controls remain optimal as business conditions change, allowing hotels to be competitively positioned in their marketplace and gain share from slower-moving competitors.
With just a few clicks, G3 RMS automatically captures the latest data, re-calculates the current business on the books and re-optimizes. G3 RMS considers the current demand, existing market conditions (such as inflation), the guests’ willingness to pay and uncertainty with each market segment to produce controls that proactively drive revenue performance – a true approach to optimization.
G3 RMS’ on-demand optimization feature empowers revenue leaders to take control and manage these sudden and significant changes and ultimately win the race.
And G3 RMS is the only revenue solution that optimizes pricing for all key products and each length of stay. It creates dynamic-rate restrictions and overbooking controls to maximize revenue effectively without setting business rules.
With the ability to make speedy strategy updates, hotels can quickly capitalize on emerging revenue opportunities and grow market share. And in the end, this ability to change course quickly gives hotels (and sailors) the cutting edge that helps them execute a winning strategy.