Your property doesn’t offer cookie-cutter guest experiences—but does your revenue management system act like it?
To thrive in a market where margins seem to shrink at every turn, it’s absolutely critical to have an RMS that’s up to the task. Every detail of your guests’ stay, from suites to spa access, should be fine-tuned for revenue success.
Fortunately, an advanced RMS can help make quick work of complex manual calibrations, bringing precision, speed and improved profitability to your pricing strategies.
How rigid, “base room”-centric pricing is selling your property short
Faced with managing a complex mix of room types, guest segments, rate plans, stay patterns and more, many hotels have made a conscious (and unnecessary) decision to settle for less under the guise of simplicity. By leaning on static hierarchical pricing structures, rules and thresholds to guide pricing efforts, these hotels forego truly intelligent demand-based dynamic pricing and miss opportunities.
Consider how this plays out with a common room hierarchy of garden view, ocean view, and villa rooms—villa commands the top price, garden view the lowest, and ocean view sits somewhere in between. With manual revenue management practices or less sophisticated solutions, pricing is informed by broad demand signals or seasonal high/low patterns. As demand rises or falls, pricing is often guided by offsets (e.g. “base rate plus or minus 10-20%”). That approach will almost certainly outperform static rates, but a lot of competitive nuance and opportunities are still forfeited to simplify implementation.
The fatal flaw with this approach? Assuming uniform demand patterns and price sensitivity.
You know different segments of guests behave in different ways—a rate increase is much more likely to be a dealbreaker for a family vacation than it is for a business trip. Alternatively, the folks looking to book a garden view room won’t behave the same as those exclusively looking for a villa. These differences are where the shortcut of hierarchies and offsets can put you in a competitive disadvantage.
Let’s illustrate the problem.
Say a conference leads to demand far outpacing your supply of standard rooms, but demand for premium suites remains flat. Standard room demand triggers an across-the-board offset increase, making it even more difficult to sell lower demand premium suites. Without manual intervention, premium suites that could likely be filled at a discount are left unsold.
Bespoke stays demand pricing precision
A tailored guest experience shouldn’t be bound by off the rack pricing. While a simple defined pricing hierarchy can serve relatively uniform properties where “a room is a room” well, many upscale and luxury properties operate with a diverse mix of room layouts, types of guests, and amenities that inject additional layers of complexity and nuance into pricing decisions.
Consider:
- Are guests willing to pay a premium for a suite with an ocean view versus a suite with a garden view, and does your pricing reflect this?
- If you offer configurable component rooms (ex: a king suite with an attachable standard room that can be sold separately or as a pair) can your system dynamically price it effectively?
- Is the potential for ancillary spending factored into pricing decisions?
Each layer of pricing strategy complexity presents an opportunity to either gain a competitive edge or leave money on the table.
“G3 RMS provides us with precise, dynamic recommendations tailored to each room type, and its forecast accuracy has been critical.”
Leaking margins: Why inventory controls matter
Importantly, dynamic pricing alone will not produce a watertight revenue strategy at your property. During high compression periods, dynamic inventory controls play a critical role in ensuring you’re not just filling up on high-rated short stays that can displace lower-rated longer stays that may be better for total profit in the longer term.
When done correctly, a strategy that incorporates inventory controls considers not just price, but the overall value of the stay. Through a concept called Last Room Value (or rate hurdles), advanced revenue management systems can use granular demand projections to determine a dynamic minimum value threshold a potential booking must meet in order to be accepted. The result? Decisions that improve RevPAR, not just Average Daily Rate.
Is your RMS controlling complexity, or is complexity controlling you?
For many revenue management systems, complexity creeps in quietly. What starts as a few simple rules often grows into a tangled web of manual overrides, exceptions, and “special cases.” When premium rooms underperform or a segment’s demand shifts unexpectedly, these systems typically rely on reactive interventions—decisions made on after-the-fact gut feelings rather than data-driven precision. That’s not optimization; that’s firefighting.
Even systems that promise flexibility through configurable “rules” can backfire. Over time, those rules multiply, overlap, and potentially contradict each other, creating an unwieldy mess that’s hard to manage and even harder to audit. Instead of empowering revenue managers, the RMS becomes a puzzle that only the most experienced staff can solve. Additionally, revenue strategies that effectively incorporate inventory controls require sophisticated analytics to predict and evaluate all possible length-of-stay permutations over time—that’s a highly complex task that cannot be reliably executed with systems guided by simple business rules.
And here’s the hidden risk: even if everything seems to run smoothly today, staff turnover can turn that fragile balance into chaos. When the person who understands the logic leaves, so does the institutional knowledge. Suddenly, your RMS isn’t a strategic asset—it’s a liability. Complexity shouldn’t control you. Your RMS should simplify decisions, not bury them under layers of manual guesswork and brittle rules.
A better way to think bigger
It’s time to re-imagine what’s possible at your property. With the right RMS, tactical work like managing complex room pricing and inventory management decisions shifts from burden to baseline. The efficiency gained opens the door to a more strategic, cohesive approach to commercial success. When stakeholders across sales, marketing, operations and revenue management can align to wow guests and make better informed business decisions, the sky’s the limit.
We can help make it happen. Connect with us to learn more.