Mention Revenue Management Systems (RMS) to the average traveller, you’ll probably get a blank look. Yet book a holiday or take a trip and RMS will almost certainly be involved.
Often called a ‘dark science’ (for this reason) RMS determine when and where cheaper seats or rooms are available, among other things.
They have been the backbone of the travel industry for the last forty years, enabling effective allocation of inventory, revenue maximisation and optimal pricing strategies.
However, they might not work as well as they once did.
Revenue Management Systems analyse past demand patterns from up to three years previously. Algorithms process this data to predict when future demand will be high or low.
The forecasts enable businesses to make better-informed decisions, bestowing a competitive edge. Automated functions such as inventory release reduce the workload, allowing humans to concentrate on customer service and strategy.
However, RMS are complex, costly to implement and maintain, have to be integrated into existing systems and require a lot of staff training.
Travel providers over-reliant on RMS can sometimes ignore human insight or external factors, leading to misjudgements.
Covid exposed further RMS shortcomings. Notably, accurate data based on the past three years, vital for forecasting demand, is no longer available due to radical upheavals in the pandemic. This leaves businesses effectively guessing.
Post-pandemic trends have also challenged RMS. Travellers are turning to new, more bespoke experiences. However, they still want the best prices. Business travel used to be a source of high revenue yields but is now in decline.
RMS, based on volumes alone, and wedded to assumptions such as the further ahead you book the cheaper the price (from when schedule-sensitive business travel = profits) now struggles to function.
Journey Mentor’s white box solutions are a lower-cost, user-friendly alternative. They deploy the latest tech to solve modern travel problems Revenue Management Systems can’t. From e-commerce portals to dynamic revenue management, Mentor products easily integrate with existing systems, with minimal staff training. Search for better deals even after a customer has paid. Monitor competitors in real-time for effective competitive actions.
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