Revenue management focused solely on rates has gained traction in the last decade. It seems efficient at first glance, as it covers availability and revenue, but it can also compromise the total profitability of your hotel. An over-reliance on mechanisms such as the surge pricing (dynamic pricing adjusted according to convenience) ends up creating strategic blind spots in the medium and long term.
For those who do not know the term surge pricing, refers to when prices dynamically rise (or fall) according to real-time demand.
This model limits the ability to think beyond the instantaneous value of the daily rate. It prevents us from discovering richest sources of income, such as experiences, loyalty programs, integrated packages, or strategies that truly connect with the guest, not just their wallet.
The warning is clear: prioritizing only the price is sacrificing the sustainable revenue intelligence.
«The highest price isn't always a win, and managing your business strategy solely by price can be a shot in the foot.»
Trends that counteract this price trap:
- Omnichannel in data – Cross-referencing information from all channels generates powerful customer insights, driving more efficient and personalized campaigns. Applied well, this practice can increase performance by up to 494%.
- Use of artificial intelligence – hotels that implement RMS (Revenue Management Systems) based on machine learning They record up to 15% increase in revenue, especially during the off-season.
- Ancillary income (services beyond room and board) – spas, gastronomy, local experiences. These sources can represent more than 18% of total revenue.
- Total Revenue Management – Shifting your perspective to all revenue streams, not just fees, significantly expands your bottom line.
- Hotel technology – Investment in PMS, BI, and RMS has proven critical to profitability; the RMS market is estimated to reach $37 billion by 2028.
- Collaboration between departments – integrating sales, gastronomy, housekeeping and marketing makes the difference: the upsells and cross-sells they flow when there is synergy.
- More data, always – Considering historical, competitive, and market data improves decision accuracy.
In Latin America, this reality is even more urgent.
The culture of packages with local experiences, day-use integrated, gastronomy as a differential and the connection with regional tourism is already emerging as a structured opportunity.
Major national chains and boutique hotels have been testing:
- Upsell spa or local cuisine in packages.
- Smart promotions on direct channels, reducing intermediaries.
- Cloud-based RMS with contextual data (events, holidays, weather) to adjust rates and availability in real time.
- Loyalty programs that value each guest with benefits beyond the rate.
The new route of Revenue Management
By combining these alerts with our dynamic reality, where guests seek history, culture, and hospitality, it is possible to overcome the "easy price" and rebuild revenue and reputation sustainably.
The model focused solely on the convenient rate may seem practical, but it is a strategy short and limitedModern Revenue Management requires:
- A comprehensive view of income (rates + ancillary + loyalty).
- Technology that understands the customer and the market.
- Intelligence in the orchestration of experiences.
- Conscious synergy among all departments.
That is the way to transform convenience into real and lasting value for your hotel.