Why today’s revenue management systems just aren’t working anymore
The author points out the three factors that are driving the problem with today’s revenue management systems.
Everyone in the industry agrees that the job of the revenue manager has fundamentally changed over the past few years. As revenue management has demonstrated success and gained visibility, revenue managers are taking on a much more strategic role within the organization. Revenue managers are no longer responsible for simply opening and closing rates according to occupancy forecasts, but rather, are expected to take a more holistic and strategic view of pricing and demand management. They are now responsible for managing revenue from other revenue generating assets across the enterprise, understanding the market forces that impact the firm’s competitive price position, and coordinating with colleagues in marketing. Simultaneously, there has been a move towards price optimization, with many industry leaders advocating for the benefits of this approach.
Unfortunately, the systems that support revenue management decisions have not evolved as quickly as the role. Many revenue managers these days have the sneaking suspicion that their revenue management solutions are no longer providing optimal recommendations. Changes in the market are not reflected in pricing recommendations. Revenue managers find themselves working outside or around the revenue management system more often than not.
Based on what I’ve been seeing in the industry today, the following three factors are driving the problem with today’s revenue management systems:
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