What you need to know about Pace's intelligent revenue management system

By Hotel Tech Report

Last updated January 26, 2022

4 min read


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Revenue management has been part of the hospitality business for many decades. Its origins can be traced back to a meeting between American Airlines and Marriott back in the 1970s. Marriott wanted to learn more about American’s success in what it called yield management or the process of optimizing revenue by matching price to demand. Marriott went on to develop software tools of its own, such as the Demand Forecast System, and began calling this revenue management. 

Those tools have evolved immensely in the intervening years, riding the wave of Big Data and predictive analytics to bring revenue management discipline to all categories of hospitality. Many hotels leverage real-time data analysis to crunch a variety of inputs and optimize pricing many times per day. One of the newer entrants to the field of revenue management software is Pace, which enables hotels to change prices accurately 1000s times a week and those changes help clients achieve higher rates, more occupancy, and significant revenue growth. Here’s what you need to know. 

 

What Pace does: Intelligent revenue management

Traditionally, pricing strategies have been guided by how our hotel wants to position itself within a specific Comp Set. This means that the hotel follows other peoples’ decisions, rather than setting their own strategy. Hotels that base their pricing on what the comp set charges are “price followers,” rather than “price leaders.” Hotels that want to be price leaders need to rely more on a revenue management strategy that doesn’t exclusively rely on competitor pricing. This is accomplished through:

Revenue science: Revenue science is ”the discipline of infusing sophisticated mathematics to transform data into accurate, automated, and actionable revenue-enhancing decisions” (more here). To do this, Pace relies on your hotel’s bookings reveal a lot about how you should price your hotel. It pulls this data via a direct integration with a hotel’s PMS to analyze performance, reservations, and booking pace. Strategy is the key word -- it’s not just about rate management but rather a holistic rate strategy. It identifies high-quality booking data patterns to drive decision making.

Continuous pricing: Accurate, quick responses to changing market dynamics is the path to success with revenue management. Price with confidence with Pace’s “Continuous Pricing,” which simulates different variables, such as market demand, price sensitivity, room type, and date, to find the price with the highest RevPAR. Since the average hotel receives bookings every few minutes, it’s not realistic for humans to keep up with all of this new information. The system processes each new data input to update pricing recommendations hourly.

 

 

Adaptive forecasting: Forecasting is a tricky thing. Whenever you change a rate, it affects everything else; each price change impacts forecasts of your occupancy and total bookings. These are complex interdependencies that are nearly impossible for a human to calculate. Pace’s forecasting adapts so that forecast evolve when one variable is changed, so RMs can make decisions on the most up-to-date and accurate information. 

 

Who Pace is for: Independent hotels and hostels

Pace is a mature platform that is both enterprise and brand ready but has found a sweet spot in the hostel segment as it is one of very few RMS players that can actually price beds (vs. rooms). Pace works with both hotels and hostels worldwide, with a sweet spot for Europe (the company is based in London). The company works mostly with unbranded independents, both those with a dedicated revenue function and those without. For existing teams, Pace saves time and increases accuracy. For hotels where GMs run revenue management, Pace can boost effectiveness and provide additional resources without hiring a full-time seat. 

Pace’s client includes groups like Generator Hostels that blend across categories. Since Pace relies on a hotel’s own data first, it's ideally positioned to support blended lodging categories that don’t easily fit into the competitive set benchmarking of traditional revenue management. 

With available integrations through popular marketplaces like Mews, Opera, apaleo and Protel, the Pace software can be integrated and customized. This flexibility makes Pace a versatile tool for all kinds of hotels, who can slot it into existing tech stacks with less cost.  

 

5 reasons why hoteliers love Pace

 

1. Intuitive calendar that simplifies optimal rates.

Pace evaluates recent bookings and runs simulations to compare all possible pricing strategies. The engine then identifies the optimal price for each unique room night, so revenue managers can make hundreds of accurate pricing decisions in only seconds. The Calendar makes this process simple and straightforward, without any further manual work from staff.

 

2. Advanced segmentation.

Pace Makes it easy to keep tabs on your hotel segments. Segmentation becomes especially pertinent when demand differs across segments. Thanks to this advanced segmentation, Pace can isolate segments and evaluate the impact of each segment on your rates. This also includes detailed segment analysis, so you can quickly see how your various segments are performing -- and take action as needed.

 

3. Events module.

Many rate shopping tools have an events module that highlights local events that may affect demand. Pace includes a similar module so that all revenue decisions can be made with an eye towards local events and related market demand.

It’s worth noting that Pace does consider secondary data, such as local demand patterns, in its pricing recommendations. Having an integrated event calendar ensures that revenue managers have the information they need when accepting pricing decisions or manually adjusting rates. 

 

4. Dedicated team that’s responsive to feedback.

If there's one theme found throughout Pace’s user reviews on Hotel Tech Report, it's that the company is responsive. The team is quick to acknowledge and act on customer feedback, while also improving functionality. 

One HTR reviewer was thrilled to work “with a company who listens, adapts and evolves to your business needs is paramount.” Another noted “Great support, very easy to work with & fast acting on feedback,” as well as “thorough on-boarding & training.” These are all positive signs when trusting a vendor to deliver on its revenue optimization promises.

 

Read more Pace reviews

5. Pace gets results. 

Pace argues that basing pricing decisions “on primary data is a superior strategy” because it helps hotels “react faster to future trends by selling at the right prices at the right time.” Reference customers, such as Floris van Es, the GM at Star Lodge Hotels, seem to agree: “After using Pace for 6 weeks and RevPAR was up 25% year on year. Since then we've continued to see very clearly that Pace is helping us outperform last year and the market.”

 

Pace pricing

Hotels looking to implement Pace for revenue management can try it out for a month without cost. After that, there’s a monthly subscription based on the number of rooms in a hotel or beds in a hostel, with a minimum monthly commitment of €300. Simple and transparent, no strings attached just like software should be.

Get a custom price quote for your hotel

 

Conclusions: Should you consider Pace?

If you’re one of the 90% of hotels that still manage pricing manually, Pace is definitely worth consideration. It’s simple to use, quick to on-board, and doesn’t require a deep knowledge of data, analytics, or statistics to take advantage of. 

Pace also has a refreshing approach to revenue management, focusing not just on optimizing price but also on the optimal strategy. In Pace’s own words:

Every feature that we build at Pace is designed to inspire the right action for you. Our philosophy is one of building tools that enable you to take the correct actions at the right time in a joyful way. In this way, we believe, the best possible results for your business will emerge. 

 

One of the most important characteristics of a valuable vendor is also one of the hardest measures: a partnership mentality. Vendors that see themselves as critical allies and partners will provide a stronger backbone that supports a beneficial relationship. Judging from user reviews and Pace’s own words, there seems to be just such a mentality in play here -- a good sign, indeed!