Effective Pricing & Revenue Management Tactics for a Post-Recession World - By Francois Mourier

As a company dedicated to optimizing RevPar, we also feel that a recovery will come gradually to our industry, and that the quick turnarounds the lodging industry has encountered after previous recessions are unlikely to occur this time - sadly. We see demand remaining soft, with rates reflective of consumer's lingering emphasis on value, and overall occupancy to remain well below 2008 averages until at least the 2010 summer travel season.

But we also see a silver lining in this dark grey cloud: it's widely accepted that the worst is over. It's time for us, as an industry, to step outside the confines of the recession - and the 'recession mindset' - and start implementing forward-thinking strategies for a post-recession world.

We believe that revenue management- with an eye toward maximizing RevPAR, not necessarily occupancy or ADR alone - will become increasingly important for the industry during the recovery phase. Hotels must start embracing cost-effective revenue generation measures; these measures will become the foundation for healthier margins in the future.

There is no reason why hotels cannot take advantage of the many sales channels available today and use the consumers' need for value to really boost sales. Effective revenue management, in this environment, must include the ability to adjust rates dynamically, automatically, across multiple channels; to take into account competitors rates and minute changes in demand; and incorporate these new-economy metrics with traditional revenue management tactics like historical and seasonal pricing. Our business has undergone immense change and so too must our strategies.

Above all, this is not the time to discount. The fact that value remains a top concern for consumers isn't necessarily a bad thing for hotels and resorts, but it doesn't mean that you should give away your house (or hotel). It opens up the opportunity for competition based on price across service levels, and encourages properties in the upper service categories to emphasize the value of their offerings. More importantly, it highlights the importance of effective revenue management tools, and allows hotels that dynamically manage their rates to enjoy a competitive advantage over those that don't - all of which are good things.

Yes, it's going to be a longer recovery, but we truly believe that the properties implementing forward-thinking revenue management strategies and systems today will be those that benefit most tomorrow. We encourage hoteliers to use all of the technical and strategic advantages that the waning recession has to offer to improve their position for when we are truly free and clear of the recession clouds.

Because this is the only way forward for our industry, wouldn't you agree?


Jean Francois Mourier is CEO & Founder of RevPar Guru, a company that has developed an alternative type of revenue management and real-time pricing solution (combined with automated online distribution) to help hotels maximize occupancy and increase their profits. The company's Yield Dynamic Price Engine, an integrated revenue management and pricing solution, adds unprecedented power and real-time adaptability to the pricing process, leaving managers more time to run their hotels. RevPar Guru has grown rapidly, now working in 25 cities and 10 countries, and offers full XML integration through its partnerships with leading travel booking sites. Reach him at jfmourier@revparguru.com or visit www.revparguru.com for more information about the company's services.

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