In recent years, one of the biggest buzzwords for the hotel industry is real-time. No matter whether it is accurate or not (and in most cases, it’s not), almost all RMS providers are now claiming that their system updates a property’s pricing in real-time. Obviously, there is a misunderstanding about what the term actually means.
Never fret, I’m here to clarify. 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.
In the revenue management industry, updates need to be made in real-time; a lot can happen in four hours, or 24 hours, so if a hotel isn’t updating rates in real-time, they stand to lose big. In a matter of minutes, a big group 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 revenue management systems do exist. Algorithm-based systems never stop analyzing and updating rates for a property. 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?
By Jean Francois Mourier, CEO of REVPAR GURU