ZEN Expert Talks Series 1: Anticipating and Preparing for the Future of Hotel Revenue Management

Hospitality Innovators Inc., Corporate Director of Revenue Management Michelle Ann De Ramos-Lascano, MBA has over 14 years of experience in hospitality, working with many distinguished hotels in the country. 


In the last two blogs, we took a closer look at the Fundamentals of Hotel Revenue Management and How to Adapt Your Hotel Revenue Strategy to Today’s Market. In the last part of this series, we’ll be looking at what hoteliers should expect from the industry, competitors, customers, and other key players in the market. 


Looking Ahead to What Awaits Revenue Managers


Q: How do you see hotel revenue management changing in the next 10 years? What challenges would hotels need to overcome, and what trends and opportunities await? 

In the next 10 years we are foreseeing aggressive hotel revenue management applications across all hotel levels as hoteliers continuously experience gains from implementation of various revenue management strategies. This is in line with foreseen growing dependency on online bookings, which is greatly influenced by revenue management best practices. 


Future Challenges in Hotel Revenue Management


1. Scarcity of revenue management professionals means less experts to study and analyze the dynamics at play in the hospitality industry.

As the application of revenue management grows not only in the hotel industry, more and more revenue management professionals are needed. However, there are only very few that we have in the Philippines. Thus, some of the international chains are hiring expats for this role. 


2. Increasing online hotel room price wars makes it more difficult to produce excellent results. 

Room rate disparity will become more rampant as more and more online channels compete in the market. Online transparency and comparisons make it more challenging for hoteliers to compete based solely on price. 


3. Higher cost of sale because of hotel room distribution costs and marketing fees hampers hotel revenue maximization. 

As part of inflation and the growing dependency of hotels on online distributors, the cost of sale is expected to significantly rise in the next 10 years. Commission fees, operation and marketing costs, as well as other external expenses all add up to increase recurring costs. 


Trends and Opportunities in Hotel Revenue Management


1. The growing online hotel booking channels offer hoteliers more options for room listings and business marketing. 

With traditional travel agencies shifting to online hotel booking platforms and operating on a hybrid model (mixed online and offline services), hotels have more options for distributing their products. This also translated to a wider market reach. 


2. There are more hotel revenue management systems providers working with hotels than ever before. 

As more hotels recognize the value of applying revenue management to their operations, RMS providers are becoming more aggressive. With the competition growing, new product features are being developed and hotels have more options to fit their needs. 


3. Healthier hotel revenue per available room (RevPAR) is on the horizon because of hotel revenue software. 

More hotels are relying on revenue management systems and investing on various revenue management tools and software. It is expected that despite strong competition, hotels will have a better RevPAR which will support overall growth for the hotel industry. 



Q: How important are revenue management systems for hotels? What are the major advantages and disadvantages of automating such a vital function in the business? Can hotels remain competitive without using technology? 

With travelers becoming more tech savvy, and demands and booking patterns rapidly changing, more hotels will see the importance of having a revenue management system to support operation and efficiently maximize revenue. 

Regardless of hotel size, RMS plays an important role as it will make use of data from your own hotel and the market to guide you in making more informed decisions. This allows complex calculations to be carried out quickly and make real-time tracking of market data. The hotel saves time and resources while also reacting immediately to various market and data changes. 

On the other hand, we should keep in mind that there will always be advantages and disadvantages in using any system. Here are some key advantages and disadvantages of a hotel revenue management system. 



Advantages of a Hotel Revenue Management System

1. An automated hotel revenue software saves time and maximizes hotel resources. 

Collating historical data, analyzing trends, predicting market demand, checking on competitor rates and occupancy all cost time and money. These are the key information that revenue managers would normally look at before coming up with pricing decisions. With an RMS, information is processed in one click with real-time updates. 

Read More: Automate Room Pricing and Maximize Revenue with ZEN Revenue Management Software


2. Fact-based market data is gathered faster and more accurately to guide hotel revenue decision-making and strategy-planning. 

Most RMS software includes an integrated competitor rates feature, allowing hoteliers to easily check room rates of other hotels in the area, or those of a similar size. This feature is valuable, because when armed with a knowledge of competitors’ rates, hoteliers can subsequently adopt a more strategic approach at their own pricing. 

Read More: Effortlessly Maintain Rate Parity ZEN Channel Manager


3. A hotel revenue software provides hoteliers with accurate and real-time analytics that allow them to respond to changes and demands faster. 

A revenue management system stores and provides key performance data, including occupancy, rates, revenue per available room (RevPAR) and average daily rates (ADR). In most cases, users will be able to see performance data from the prior month, from the same time last year, and a variety of other options. An RMS instead provides both previous and current data for more accurate forecasting and planning. 

Read More: Enjoy 30% Increase in Revenue with ZEN eManager


4. Hoteliers can enjoy Instant rate recommendations and adjust their room pricing strategy immediately to attract more guests. 

Perhaps the most crucial feature of a revenue management system is the ability to quickly and accurately calculate ideal room rates, using sophisticated algorithms, past performance data, current market data and other information. Having this feature gives hoteliers an edge of competitors that have to manually calculate rates or wait for delayed data transmission. 

Read More: The Complete Hotel Operations and Revenue Management System


Disadvantages of a Hotel Revenue Management System

1. Investing in a hotel revenue system is costly and can be off-putting to small-scale hotels. 

Having a revenue management system installed in your hotel can really be costly especially for the small-scale hotels. Majority of them are having a hard time investing in this tool and will instead look for other alternatives that don’t provide the same results. 

Read More: Flexible Payment Options Available For All ZEN Hotel Management Systems


2. Regardless of how sophisticated an RMS is, there will still be unavoidable system errors. 

Just like any other system, errors and occasional system failure are inevitable. Thus, constant monitoring and upgrades are also needed to ensure optimal performance and maximum usage of all features. 


3. A hotel revenue software will still be, to some extent, reliant on user intervention and data input. 

A revenue management system will still need human intervention. There will always be information that needs to be manually inputted by the user. If the data fed is incorrect, then the accuracy of recommendations is significantly decreased. Users, then, must also be equipped with proper knowledge on how to use this tool. 

Read More: Combine a Powerful Revenue Software with a Dedicated Revenue Expert


As the world in general becomes more technologically dependent, it will be crucial for the hotel industry to also invest in new technologies to survive, more so to keep ahead of the competition. 


Q: What can hotels do to ensure competitiveness in the long term? 

1. Invest in product enhancement and hotel technology to improve performance and services. 

Regular product enhancement is crucial to remain competitive in the market. Though it might be costly, it is also expected to maximize revenue in the long run. Rooms, amenities and facilities in your hotel are key deciding factors for a guest to choose your hotel against the rest of your competitors. 

Book Now: Schedule Your FREE Consultation


2. Have a consistent hotel marketing initiative and constantly seek to improve strategies to stay relevant in the market. 

Online visibility is becoming significantly vital to keep on top of competition. There are a lot of marketing platforms that help hotels reach their target market faster and more effectively. Leveraging on these platforms and having a compelling campaign can give hotels an advantage over competitors thus, driving more business to them. 


3. Proper implementation of hotel revenue management strategies can significantly boost a hotel’s revenue and profits. 

The key advantage of applying revenue management strategies is to maximize revenue for the hotel. With a more dynamic market and greater online dependency, having proper revenue management in place will guarantee long term sustainability of the business. 


Heading into a new travel and hospitality landscape is a challenging endeavor for hoteliers. Knowing how to prepare and what to expect in the coming years can greatly improve hotel revenue and overall hotel performance. Anticipating customer needs, market trends, and prevailing hotel revenue management strategies are all part of thriving in a new travel era, seizing new opportunities and milestones. 

Missed the previous installments of our hotel revenue management series? Check out Part 1: Fundamentals of Hotel Revenue Management, and Part 2: Adapting Your Hotel Revenue Management Strategy to Today’s Hospitality Market. 


Interested in learning more about thriving in the travel and hospitality landscape? Work with ZEN Hospitality Solutions. Our in-house consultants and AI-operated hotel systems can help take your hotel to the next level. Talk to an expert today. 


Frequently Asked Questions About the Future of Hotel Revenue Management

Q: What are the new challenges of hotel revenue management? 

Some of the prevalent challenges in hotel revenue management are the scarcity of revenue managers, increasing rate disparity, and higher costs of sale. Hoteliers need to prepare strategies and contingency plans to properly address these problems if they want to succeed in the following years. 


Q: What are the advantages of a hotel revenue management system?

Some advantages of using a hotel revenue management system are: 

  • Maximized resources and efficiency

  • Automatically gathered fact-based market data

  • Accurate and real-time updates

  • Instant rate recommendations


Q: What are the disadvantages of a hotel revenue management system?

Some disadvantages of using a hotel revenue management system are:

  • Can be costly

  • Unavoidable system errors

  • Human user dependency


Article by: Ayna Gonzales