The hyper-connected customer presents a new set of challenges for revenue management. How can revenue strategies meet the demands of an increasingly demanding customer who now has unprecedented access to technology, data, and choices? In advance of our industry leading conference, 'Revenue Management and the Connected Customer', we spoke to Alexander Edstrom, CEO of Atomize, leading revenue management system and proud Conference 'Gold Sponsor', as to how revenue management systems can support these challenges.
Alexander- What do you think are the main challenges for revenue management in this age of the connected customer?
I would say the main challenges are that as the clients have, as you say, been offered and adopted the latest technology and become “connected”, hotels have not. One indicator of that is that more than 90% of all hotels still set their prices manually in some fashion, which is not only resulting in inefficiencies, but also, in many cases, inaccurate and static pricing.
So in many cases, the market is broken in that respect, and hotels are unfortunately the ones taking the hit. The main reason for this is that too many hotels are sitting on legacy systems that are either completely closed to the outside world in terms of connectivity or have systems using really old APIs , These are hugely time-consuming and therefore costly to reach the connected customer in the “dynamic market”.
The result is many hotels today are completely operating in the dark in terms of revenue management. The obvious first step to balance the game is to make sure that hoteliers make use of a tech stack that is 100% cloud-based and offers open APIs – which opens up for using a revenue management system that can meet up with the requirements of the dynamic market, hence the connected customers.
How can Revenue Management Systems support these challenges and offer new commercial opportunities for hotels?
Successful revenue management today is a combination of both “strategic revenue management” and “tactical revenue management”.
It is vital to understand the difference between these since they are solving different challenges. 'Strategic Revenue Management' answers the questions about 'who is sleeping at your hotel and how do you in the most efficient manner reach these client segments' while “tactical revenue management” helps you to make sure you have the correct pricing of your hotel rooms. The latter, due the vast amount of data available today, can never be done by a human – the machine will win every time. To give you an example, a typical hotel needs to do more than 60 million price updates a year if they want to be on par and operating on the same conditions as the 'connected customer'. So to sum up, the best way a RMS can support today’s challenges and offer new commercial opportunities is through “real-time automation”.
How is the ‘connected customer’ shaping your product development?
The connected customer is very dynamic and lives and breathes in a real-time world. As must Revenue Management Systems. Our long-term product roadmap, focusses mainly on 3 continuously evolving areas that we believe are vital to continue to stay competitive and a market leader within tactical revenue management:
· -Real time (data retrieval & decisionmaking)
· - Automation (Prices should be set automatically without human intervention)
· -Ease of use (Atomize to be seen as your AI Revenue Manager)
To hear more, register now for ‘Revenue Management and the Connected Customer', the industry-leading one-day revenue management conference on 12th February 2019. Join thought leaders and innovators who are spearheading change as they discuss what the growth of the ‘Connected Customer’ means for revenue management. Listen, debate and network as we discuss how customer's increasing demands will shape your revenue agenda in 2019. Conference website here www.opportunity2019.co.uk