At HITEC 2022 in Orlando, Dax Cross, CEO of Revenue Analytics, met with LODGING, where he explained how and why his company transitioned from creating custom revenue management systems to become a software-as-a-service provider mainly for hospitality. He also described the seven feature improvements to its N2Pricing originally introduced at the height of the pandemic in 2020, which he says has an intuitive interface that enables hoteliers to access and act on fluctuations in demand and competition in a timelier manner, providing revenue teams with the most precise forecasting technology currently available.
How did your company come to occupy your current niche as a software-as-a-service firm delivering revenue management solutions to hospitality?
We had previously been building custom solutions, i.e., custom revenue management systems, for the big brands. For a number of years, we built all or part of the RMS for companies, including IHG, Marriott, Hyatt, and Starwood. Then, in 2018, we created a modern cloud platform as a foundation for agile, API-backed, user-centric SaaS products. Upon deciding to begin offering software as a service, we honed in on hospitality—which is pretty loaded with legacy technology—as a great opportunity to kind of combine all of those enterprise analytics with a more modern approach to software.
Why did you create N2Pricing RMS originally and how was it received?
With N2Pricing, we wanted to simplify and make more intuitive and modern approaches to optimizing things like the best available rates, and setting your inventory controls, minimum lengths of stay, etc. We launched the N2 in late 2020, for better or worse, during the height of the pandemic. The goal then was to get it out, get it into customers’ hands and see what we needed to do after that. Launching at that time was, quite frankly, a disaster. Everyone was strapped for cash, and the mindset of the industry was that there was no revenue to manage. Yet, coming out of the pandemic, those handling revenue management manually were overwhelmed by resource restraints at a time when they were managing more properties than previously. Given that the vast majority of revenue management today is being done manually—hotel by hotel, day by day—by central teams who are managing five, 10, maybe even 20 hotels at a time, they were understandably complaining that they didn’t have enough time to take on more hotels. As a result, we feel like that headwind has become a tailwind for us because we’re offering something to solve that problem.
Why was it updated, and what are its seven new features?
The objective of this new update is to provide a suite of features and capabilities that really helps people to do pricing and revenue management in a more automated way, so they can manage that greater number of hotels and drive revenue uplift. They include Multi-Property Workflow to help cluster RMS and central teams; Inventory Controls & Overbooking, which does the math needed for yield management; Group, which optimizes speed to quote in providing group rate recommendations; Intraday Updates, which allows users to refresh data whenever they want, down to the property level; Profit-Optimization, which better captures overhead and uses restrictions to optimize profit down to the rate plan- and room type-level; Dynamic Differentials, which uses smart rules to update the entire transient rate structure automatically; and Performance Dashboard, which tracks the performance of rooms, ADR, revenue, and RevPAR across the user’s portfolio (or one hotel at a time), while also permitting users to drill into segment detail.
Which of the features added to N2Pricing is likely to be most helpful to hotels/hotel companies that may have struggled and are now coming back?
I think that would be the multi-property management feature, which allows someone to actually go in and look across a portfolio and do a kind of management by exception. It’s an entirely new way of doing things versus that classic hotel-by-hotel, day-by-day approach, where things get lost. With this, you can see that your biggest revenue opportunity may be three weeks from now. The system will automatically surface that for you and make sure that you spend your attention on the highest-priority items. So, when I log into my multi-property dashboard, I can just look at exceptions across my portfolio. This brings my attention to the most important things, the biggest price changes that I should take a look at. This lets revenue managers decide for themselves, for example, to let the system automatically make any change of less than 10 percent, then show the things of more than 10 percent.
This multi-property view, in combination with other features, such as the dynamic differentials, allows a higher degree of automation. The dynamic differentials module lets people set a strategy—for example, modifying the standard AAA according to demand. If it’s normally 20 percent, but I’m forecasting more than 80 percent demand, I want to compress that and make it only 15 percent, and if I’m forecasting over 90 percent, I’d make it 10 percent or even 5 percent at over 95 percent. Establishing that as a strategy even once means every time the system re-optimizes, which it does multiple times per day, when the forecast crosses a threshold, it’ll automatically update the discount and then the same thing on the room type side.
Do you think that more hotel companies will move from legacy technology to this more modern approach?
This is a tough industry for technology. Hotel owners with limited budgets tend to place a greater value on customer-facing improvements, like refreshing the lobby, over technology, which is back office. But I do think that, as the next generation comes in, we will see more of a willingness to invest in technology to run hotels more efficiently. The fact is, kids graduating from college today would not expect to just be doing things by hand.