Smarter Pricing, Better Profit: How Indonesian Independent Hotels can use Revenue Management for Success

Tracy Dong, Principal Industry Consultant, IDeaS

Written by Tracy Dong, Principal Industry Consultant, IDeaS

Indonesian hotels often prioritised renovations or enhancements to the physical guest experience. However, in today’s increasingly data-driven, fast-moving hospitality environment, investing in revenue management technology has emerged as a critical need. By using automation power to implement core pricing strategies, deliver accurate forecasts and help hotels better optimise inventory and staffing, advanced revenue management technologies can deliver both short-term gains and long-term advantages to Indonesian hoteliers.

Data-Driven Decisions for a Dynamic Market

In a competitive environment, filling as many rooms as possible is not always the ideal end goal. A fully occupied hotel can still leave significant revenue on the table if rooms are sold below their optimal rate or targeted at guests with lower profit potential. By contrast, properties with advanced revenue management technology can effortlessly take a holistic approach to pricing, factoring in length of stay, seasonality, market segmentation, and even ancillary spend from a particular type of traveller to drive optimal revenue results.

These forecasting and pricing decisions are guided by predictive algorithms and machine learning models that capture ongoing shifts in consumer behaviour. For instance, an RMS can identify customer booking windows at a granular level, yielding out discounts when demand allows and optimizing to capture the most profitable business. This data-driven approach ensures hotels are attracting and retaining higher-value bookings, driving both immediate revenue and repeat business.

The benefit of an RMS to Independent Hotels

Independent hotels also face unique challenges compared to larger chains. With smaller teams, staff often juggle multiple roles, from managing guest services to maintaining operations, placing heavy demands on hotel management. Manually managing inventory, adjusting rates, and updating distribution channels can quickly become overwhelming. Without the resources of larger chains, these tasks often detract from more strategic priorities.

A well-integrated RMS alleviates this burden by automating repetitive tasks like rate adjustments and inventory updates. This streamlines operations, reduces manual effort, and ensures real-time updates across booking platforms, enabling independent hotels to focus on delivering exceptional guest experiences while maximising revenue potential.

Delivering an ROI with Revenue Management

The benefits of an RMS are increasingly difficult to ignore, with recent research showing the majority of hotels that use revenue management technology are experiencing revenue growth and a significant portion of RMS users (25%) achieved a double-digit net operating income increase of 10% or more. In a marketplace where every dollar counts, these kinds of gains can have an immediate impact on day-to-day cash flow and long-term financial health.

Hoteliers are operating in a competitive environment where underpricing leaves money on the table, while overpricing risks driving guests to competing properties. An RMS leverages data mining, AI, machine learning, and predictive analytics to evaluate market demand, competitor pricing, and guest behaviour in real time, enabling hotels to set precise pricing strategies that maximise revenue for every room sold. Instead of guessing or relying on manual calculations, hoteliers can work with the recommendations of their RMS to make decisions that optimise revenue and profitability.

In addition, revenue managers often save considerable time each month by eliminating manual processes like rate parity checks, updating inventory across booking channels, and running time-consuming reports. By automating these tasks, an RMS frees key personnel to focus on higher-value activities such as collaborating on strategic marketing campaigns to attract higher-value guests.

Overcoming Budget Concerns: An RMS as a Cost Saver, Not a Cost Centre

One of the biggest barriers to adopting an RMS is the perception that it is an unnecessary expense. However, this couldn’t be further from the truth. An RMS acts as a cost saver by improving operational efficiency and reducing waste. Forecasting tools can help staffing managers align labour with projected occupancy, reducing the risk of overstaffing during quiet periods or leaving the property stretched too thin during busy times. This efficiency directly impacts payroll costs and ensures an improved guest experience.

The same applies to food and beverage operations. Knowing when demand will spike or dip allows hotels to order perishables more accurately, reducing spoilage and associated costs.

Stay Ahead with an RMS

Properties that continue relying on outdated, manual methods are not only missing out on potential revenue but also exposing themselves to increased operational inefficiencies and competitive vulnerabilities. With a majority of hoteliers using revenue management technology today to stay ahead in pricing and targeting, any hotel relying on outdated manual methods risks losing guests and revenue that enable competitors to reinvest and amplify their advantage.

For more information on how hotels can benefit from RMS technology, visit: www.ideas.com