The eBook titled, 'The Truth About Pricing and Revenue Management', released by JDA Software Group, estimates organizations could see a 1-3% increase in revenue if such an approach is taken.
The group reveals that one third of hotel properties do not have automated revenue management systems in place. An automated approach means businesses can adjust pricing as customer demand; competitor pricing and other external influences fluctuate and ensure that pricing remains at a profitable but competitive level.
"Many organisations take a time consuming, manual approach, or worse - do no revenue management at all - because they mistakenly assume revenue management systems are tough to implement and run," said Andy Archer, regional vice president, pricing and revenue management, JDA Software.
"Additionally, our research has shown that over half of revenue managers believe customers think revenue management is a business trick that drives customer ill will, if prices are complex and change too frequently. The truth is that customers are more open to a company's revenue management efforts, if that organization communicates the benefits of the dynamic pricing it brings.
"A more flexible approach to pricing offers the means to move with the industry. If demand is expected to dip, or boom, pricing is instantly repositioned to reflect that shift. It is this ability to better understand customers and be proactive in pricing, rather than simply reacting to the competition that will help ensure sustained success for the hospitality sector."
The eBook looks at five biggest myths and aims to set the record straight, separating fact from fiction and debunking the myths that have slowed industry adoption. It also contains insight from leading hotel company Carlson Rezidor Hotel Groups, which owns high profile brands such as Park Plaza and Radisson. Carlson itself has worked with the group to take a smarter approach to pricing, which has resulted in 2-4% incremental revenue growth.
"You don't know what you don't know," said Fred Deschamps, vice president of global revenue optimisation at Carlson Rezidor Hotel Group. "The system will point to a pricing opportunity you didn't know existed, so prior to implementation it's difficult to estimate precisely how much value creation can be expected. However, the results across the industry are surprisingly consistent. Regardless of their starting point, it seems that most organizations that implement revenue optimization are experiencing a 1-4% improvement in revenue per available room relative to the current situation."
To download the eBook, go to http://jda.com/pr5myths. To review the Ibis World report, go to www.ibisworld.com/industry/global/global-hotels-resorts.html.
