2 min read

How an RMS Can Unleash Resort Profitability

Avatar

Julia Rey in Revenue Management

Last updated July 20, 2023

image description

In today's ever-evolving hospitality industry, technology has become a driving force behind hotel revenue management. The adoption of advanced systems and algorithms is transforming operations, particularly optimizing revenue generation. While many properties have embraced this technology, adoption in vacation hotels has been slower due to unique challenges.

In this article, we will explore the benefits of revenue management technology for resorts, focusing on optimizing distribution costs and using AI algorithms to enhance sales strategies and attract more direct bookings.

How Technology is Transforming the Future of Revenue Management for Hotels

Technology has revolutionized revenue management, allowing businesses to make data-driven decisions for optimal pricing and distribution strategies. Advanced RMS systems leverage historical data, market trends, and customer behavior analysis to generate accurate forecasts and recommendations.

These insights enable hotels to maximize potential by adjusting prices dynamically, managing inventory effectively, and targeting the right customer segments.

The future of revenue management lies in the seamless integration of technology to deliver real-time insights and automate processes.

Image
THE PITCH
RATINGS BEST FOR
85 HT Score
Hotel Tech Score is a composite ranking comprising of key signals such as: user satisfaction, review quantity, review recency, and vendor submitted information to help buyers better understand their products.
Learn More
BEONx is the cloud revenue strategy solution based on AI that helps increase the total profitability of the hotel.
Product logo
BEONx Revenue Management Systems
THE PITCH
RATINGS
85 HT Score
BEONx is the cloud revenue strategy solution based on AI that helps increase the total profitability of the hotel.
Learn More

Why Adoption is Slower in Vacation Hotels

Vacation resorts face unique challenges when it comes to adopting revenue management technology. Unlike traditional hotels, these kinds of properties often rely heavily on tour operators for bookings. This reliance can make it difficult to implement an RMS that optimize transient segment pricing and global distribution costs.

Furthermore, the seasonal nature of this sector, with high demand during peak periods and lower occupancy during off-peak seasons, presents a challenge in implementing consistent pricing strategies.

However, with the right strategies and technology, vacation properties can overcome these challenges and reap the benefits.

Get the latest hotel tech tips, trends and insights delivered to your inbox once a month

You’ve been subscribed
Invalid email format
post_faces_combined Join 50,000+ executives from world’s leading hotel brands and get the latest insights delivered to your inbox once a month

The Challenge of Beating Tour Operation and Optimizing Distribution Costs

One of the primary challenges for resorts is optimizing distribution costs while beating tour operation competition. Many holiday hotels are highly dependent on intermediaries, facing high distribution costs, not only in commissions but also in marketing fees and rappels on sales. Being able to manage these costs is essential for business success and optimising long-term net profitability.

Revenue management technology provides the tools to monitor and control not only inventory allocation, ensuring optimal pricing for tour operators, but also distribution costs, allowing access to in-depth knowledge of the distribution mix and opening up the possibility to renegotiate contracts based on the data. By analyzing historical data and market dynamics, resorts can negotiate more favorable conditions with tour operators, minimizing distribution costs and maximizing revenue from this segment.

The technology also enables alternatives to identify demand patterns in different segments and adjust inventory allocation, reducing reliance on tour operators when direct bookings are more profitable.

Optimizing Distribution Mix with AI Sales Strategies Recommendations

Advanced revenue management technology employs AI algorithms to provide sales strategy recommendations, enhance distribution mix, and attract more direct bookings. These algorithms consider factors such as historical booking patterns, market demand, competitor pricing, and customer behavior.

By analyzing this data, resorts can implement effective pricing strategies, personalized packages, and promotions to appeal to different customer segments. The technology's dynamic pricing capabilities allow businesses to adjust rates based on occupancy levels, demand fluctuations, and even external factors like weather forecasts. This flexibility ensures optimal revenue generation throughout different seasons.

5 Reasons Why Resort Hotels Should Use a Revenue Management System

    • Enhanced Revenue Generation: Revenue management technology helps maximize revenue potential by optimizing pricing, managing inventory, and identifying opportunities for upselling.
    • Increased Direct Bookings: By leveraging AI algorithms, resorts can offer competitive pricing to attract more direct bookings, reducing reliance on third-party channels and minimizing commission costs.
    • Improved Efficiency: Automation of revenue management processes reduces manual effort and human error, streamlining operations and allowing staff to focus on delivering exceptional guest experiences.
    • Data-Driven Decision Making: Technology provides with real-time data and insights, enabling them to make informed decisions based on market dynamics, demand patterns, and customer behavior.
    • Competitive Advantage: Adopting revenue management technology gives vacation hotels a competitive edge by staying ahead of market trends, optimizing pricing, and efficiently managing distribution channels.

    While the adoption of revenue management technology has been slower in vacation hotels, its potential for optimizing distribution costs and enhancing revenue generation is undeniable.

    By leveraging advanced systems and AI algorithms, resorts can overcome challenges in beating tour operation competition and attract more direct bookings. The benefits of adopting revenue management technology include increased revenue, improved efficiency, data-driven decision-making, and competitive advantage.

    Vacation properties that embrace this technology will be better positioned to navigate market fluctuations, maximize profitability, and deliver exceptional guest experiences in the evolving hospitality landscape.

Author image
Julia Rey
Head of Content Marketing @ BEONx
I'm a hospitality industry enthusiast, passionate about hotel management technology. I am a Hotel Revenue Management specialist and I love learning and teaching. I have found content marketing to be a great opportunity to share and spread the knowledge.