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The Xotels Revenue Management Solution (RMS) was developed with a vision in mind that managing rates is becoming more and more complex, and that the market insight of customers has increased greatly. Many travelers check different sites on the internet before they book online or call/fax the reservation office.
For offline (phone, e-mail, fax, walk-ins) reservations, a quick overview of availability and related rates with conditions is important. The most important for online bookings is pricing and distribution (of availability and rates). Not only to the own site, but also to the travel portals like Booking.com and Expedia, or the many smaller ones. Preferably, rates should be consistent over off-line and on-line channels.
Revenue management and pricing
The pricing of hotel rooms is nowadays very transparent and for best-price-seeking travelers it is not hard to find good deals. The initial reaction of many managers is to lower the rates to meet (or beat) competition. This practice (together with a decrease in demand) has lead to a decrease of hotel rates worldwide.
Revenue management is the art of managing prices through the demand curve (the demand up to the date of arrival), so that people who are willing to pay more, also pay a higher rate, while cheaper rates are available when the hotel is not going to be full.
 “Demand/booking curve” showing number of days before stay
Another part of the concept behind revenue management for hospitality and travel is to differentiate prices by bundling them with one or more conditions, like:
The future expected demand is a combination of:
Xotels Revenue management uses this expected demand to calculate maximum revenues in an optimal configuration of available rates. This is what we call “logical availability”; the availability of different rates (combined with conditions) with an automatic overbooking level when necessary. It is different from the physical availability (ie. the number of room you have available), since a room may be counted for different rate and conditions. Of course, as the hotel will get nearly full, the Logical Availability approaches the physical availability (including overbooking percentage).
At any given time, the logical availability and rates need to be known to systems and departments that approve/accept bookings. This is the distribution part of Xotels Revenue Management system:
Revenue management and distribution
Since the popularity of the Internet reached the masses between 1995 and now, depending on the country, the market has never been more transparent.
Next to the own website, most hotels sell through (online and offline) channel partners, like tour operators, travel portals (booking.com / Expedia), GDS’s and other channels. It has become more and more difficult to manage rates in multiple channels. You may be managing the availability of rooms for multiple online portals as well. And for each channel you need to set the rates.
Xotels RMS is taking away the manual labor to manage the different rates: it updates rates and availability in the Property Management System (like Fidelio or Opera), and in online portals. It can handle some portals directly (like booking.com and Expedia), or use an online consolidator like RateTiger.
Internally, Xotels Revenue management works with rate buckets, which contain the logical availability of a specific rate. To work with many online portals and more traditional Property management systems, this rate bucket availability may be converted to Best Available Rate models or even “virtual allotments”.
Unique solution, increasing revenues in an efficient manner
The unique features of the Xotels Revenue Management System are:
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