Automated RMS Can Help Hoteliers Prepare for Upticks in Travel

Hotel revenue management

The hospitality industry is seeing an uptick in travel activity for the first time since lockdowns began in 2020. Expected high occupancy might be refreshing for hotels that have been stunted for 15 months if they are prepared for the booking rush. Shortages in resources and limited time to prepare for the return of leisure travel are creating complicated operations for an industry eager to return. Pre-pandemic booking data is limited because of the current travel climate, and hotels might struggle to manage revenue like before. Hoteliers need more data to make decisions, identify potential bookings, and prepare for a new level of competition that can set a hotel apart from its peers in its market.

Hoteliers cannot waste time making daily decisions about rates. An automated revenue management system (RMS) is necessary for the current environment.

Decisions and Recommendations

There’s a distinction and difference between automated, decision-optimizing RMS and a revenue decisions support system or pricing recommendation tool; the latter might not call itself an RMS. Automated decisions systems ensure optimal revenue and profit-maximizing actions are taken under any circumstances. Oppositely, decision support systems will assist a user, but will ultimately make them responsible for the manual decision-making process and might not arrive at the truly optimal revenue or profit-maximizing action.

Automating decisions is like automating any other business process. The systems codify stochastic mathematical optimization algorithms that create a connection between the data and how the decision gets made with efficiency and accuracy. A feedback loop is created that constantly analyzes the forecasts and associated uncertainty with the results to build a self-learning, self-correcting system.


Exceptions are flagged by the system for the user. This management by exception is only possible when a decision optimization system optimizes most of the decisions, and the user is then only required to focus on those where they can add value.

Predictive Adaption

RMS are valuable within the current environment. Traditional revenue management strategies focus on using a limited number of forecasting methods to understand transient and group bookings. While perhaps effective prior to the pandemic, this approach provides only a narrow understanding of a market’s activities based on where the revenue manager knows to look.

Automated RMS takes advantage of advanced algorithms to understand a multitude of factors impacting hotels’ revenue management practices, simplifying the tangle of data available to operators. Before the pandemic, this technology allowed hotels to optimize their revenue strategy within their core markets; today, it’s vital for understanding the next wave of travelers and their booking habits.

Historical data remains valuable, but the context for its value has shifted. The return of leisure travel has shown a shift in priorities and destinations, and these shifts can potentially prepare hotels for the recovery of business and group travel in the future. Presenting this data in a concise manner that can be quickly understood is just as important as aggregating it effectively. Hotels with access to advanced predictive data analytics will be able to see the pre-pandemic trends of value and adapt quickly to shifts in their competitive set better than properties attempting to forecast these changes manually.

Sweat Equity

Automated revenue management tools are also priceless for driving operational efficiencies. Hotels must decide the services and amenities to offer once bookings increase, as well as when to roll them out and track their adoption by guests. Hotels also need to effectively manage room inventory with reduced operating capacity in mind while short-staffed.

Fewer hands-on-deck means fewer eyes on the property and less room for error. By using an automated RMS, hotels can strategize the optimal booking layout to allow housekeeping to more efficiently service rooms as hotels gradually begin to fill, which will allow operators to adopt a layered booking strategy that accounts for all areas of hotel operations without focusing on the minutiae of the system daily.

This is an example of the impact revenue management tools can have on a property that would have been an extra perk of the tool before the pandemic but today is a key component for remaining profitable. Even with reduced staff levels, hoteliers can provide a better guest experience if they have access to technology that allows them to accurately strategize around inventory limitations.

More With Less

Basic tactical activities are automated with an RMS, while users are made aware when there are significant changes or conditions where they can use their expertise. This approach prioritizes critical actions and monitoring, allowing the user to focus more time on strategic activities.

Automated RMS can visualize data effectively, and revenue managers are increasingly using this technology to care for more clusters of multiple hotels at once. The focus is shifting from a niche strategy to the norm as technology advances and revenue management matures.

While it may seem at first that revenue managers overseeing multiple hotels lack the time to become familiar with the factors impacting each property in a cluster, they have the advantage of interacting with data from a variety of sources and can chart the ways this information impacts each market in turn. In this way, cluster revenue management allows operators to align their revenue strategy across multiple properties and maximize profitability in a way that wouldn’t otherwise be possible.

Reading between the lines is going to be necessary going forward as the drivers behind guest bookings continue to diversify. For many travelers, hospitality’s increased emphasis on sanitation may never subside. Other guests may value the return of specific amenities to the extent that it sways their booking. Hospitality will be defined by the need to serve guests on a case-by-case basis, something that can only be done by using an RMS capable of visualizing their findings in a concise manner.

The service element of hospitality may seem like it went into hibernation during the pandemic, but savvy hoteliers were able to forge close connections with guests if they decided to embrace new technology that eased their operations. While basic tactical activities—like room inventory management and revenue strategy—can be automated, operators will always be required to focus on the key priorities that compromise the guest experience.

The level of attention to the guest is not going away: It’s being amplified by the return to travel following the pandemic. Automated technology exists to elevate hotels’ tactical options and efficiency, allowing the property to focus on the most important aspects of hospitality.

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Dr. Ravi Mehrotra is the president, founder, and chief scientist of IDeaS Revenue Solutions. Dr. Mehrotra co-authored and holds more than one dozen patents. Today, he remains an active and hands-on chief scientist at IDeaS. He continues to research increasingly sophisticated methods for dynamic pricing that optimize expected profits over longer time horizons and is a widely-recognized leader in the field of predictive analytics, forecasting, and dynamic price optimization.