Pricing is a critical factor that influences every aspect of hotel operations. While setting the right price once may be straightforward, continually adjusting it to stay competitive is a significant challenge. This is where dynamic pricing comes in—a solution that is increasingly gaining popularity in the hospitality industry. We spoke with Marvin Speh, a hotel revenue management expert and co-founder of RoomPriceGenie (RPG), to discuss the hows and whys of automated revenue management.
I am one of the three founders of RoomPriceGenie. Before this, I worked in finance for a few years before a series of fortunate events led me to the hotel tech industry, which I'm thrilled about. As a founder, I go wherever the company needs me, particularly enjoying setting up new departments and passing them on once they're established.
At RoomPriceGenie, we help hoteliers in 50-60 countries price their rooms intelligently using data, saving time and increasing revenue. My main motivations are creating a workplace where people can grow and thrive, and helping hoteliers globally. Seeing our team and clients succeed is incredibly fulfilling. We've often heard that our solutions have saved businesses and transformed lives, allowing hoteliers to focus on their guests again.
At RoomPriceGenie, our goal is to make a significant impact on the hotel industry. One of the best parts of this work is the genuine appreciation from hoteliers, who aren't afraid to express gratitude or offer honest feedback. Their positive responses keep our entire team motivated.
Ten years ago, I never imagined I'd end up in the hospitality tech industry, managing revenue. It all started when my co-founder Ari noticed his dad, who still today runs a 20-room bed & breakfast, struggling to set the right prices. Like many hoteliers, he kept prices fixed because he lacked the time and expertise to adjust them. During the summer, he sold out quickly, but in winter, his property stayed empty while competitors thrived. Ari realized he could help, and we launched RoomPriceGenie in 2017 as a side project. Now, our team is nearly 100 strong, and we work with over 2,500 hotels globally.
Our entrepreneurial journey has been fascinating. When we began, we never envisioned growing this large, but today we see immense opportunities. We're leading the revenue management space in our market segment, and with low market penetration, we know there are countless hotels we can still assist. Our goal is to keep growing, helping more hotels, and expanding rapidly to meet the high demand.
In recent years, revenue management and its software have often been seen as complicated and meant only for big hotel chains like Hilton and Hyatt. This misconception has persisted because the industry has used complex terms and built difficult products, making them inaccessible to small independent businesses. A 30-room hotel owner would likely view traditional systems as too complicated, but RoomPriceGenie has changed that. RoomPriceGenie is the most accessible, user-friendly, and easy-to-learn revenue management solution available.
The second misconception is that revenue management tools are expensive. Historically, integrations and setup fees were costly, with many systems charging 500-600 euros a month, targeting larger hotels. However, RoomPriceGenie offers a much more affordable option, proving that this misconception no longer holds true.
At RoomPriceGenie, we focus on being simple, transparent, and efficient. Transparency is crucial, especially for hoteliers new to using technology for pricing. RoomPriceGenie ensures they can see and understand the logic behind the calculations. For instance, they might see higher demand due to an event like a Taylor Swift concert and understand why prices are adjusted accordingly. This transparency builds trust, allowing around 97% of our clients to use RoomPriceGenie fully automated, confident that the system will make the right decisions.
We can generally agree that data-driven pricing is better than static pricing. Pricing exists on a spectrum—not just static or dynamic, but with many variations in between. You might start with weekday and weekend prices, then manually adjust rates for the next month. You can set rules, like increasing prices when occupancy hits 80%, or use a revenue management system that handles it more intelligently. The more you automate, the more benefits you gain by becoming granular in pricing.
The two main benefits of an automated revenue management system are:
Fast reaction to market changes: For example, if Taylor Swift announces a concert in London, hotel demand—and prices—will shoot up. If you don't adjust quickly, you risk being the cheapest and getting booked out first, missing the opportunity.
Constant adjustment to market conditions: A revenue management system ensures smooth, continuous price changes, rather than spikes, by constantly monitoring and adjusting based on the market.
So, fast reactions and ongoing adjustments to market conditions make a revenue management system very effective.
To an external hotelier, many revenue management systems might seem similar—they all analyze data to adjust prices and help you make more money. While the goal is the same, the way we approach it at RoomPriceGenie is what sets us apart.
Simple: RoomPricegenie is designed to be easily accessible. You don’t need to be an expert to use it; you can understand it quickly and then automate the pricing processes with ease.
Transparent: We ensure you understand why prices are set the way they are. Instead of hiding behind complex algorithms, we provide clear breakdowns of our pricing decisions, so you always know what’s happening.
Efficient: RoomPriceGenie offers a strong return on investment, making you much more money than it costs. Once you start using RoomPriceGenie, you'll quickly see that the revenue it generates far exceeds what you pay for the service.
Commitment to providing great service: Another key difference is our full focus on the user. Our entire commercial team has hotel experience, and most of our sales team are trained revenue managers. This means that when you speak with us, you’re talking to someone who truly understands the challenges you face as a hotelier. Even the first person you contact from our sales development team has hospitality experience, and the revenue managers who support you have years of industry expertise. This focus on people is often overlooked when selecting a tech solution, but it's just as important as the product itself.
At RoomPriceGenie, we simplify pricing by analyzing data just as a hotelier would with unlimited time. Our system reviews your data, market trends, competitor prices, and local events. It recalculates prices every hour and updates your PMS with the optimal rates, helping you maximize revenue.
During demos, hoteliers often describe their ideal pricing process, which aligns with how RoomPriceGenie operates. We collect market data—competitor rates, Airbnb trends, and local events—and compare it with your booking levels. For instance, if you usually charge €150 for a room, but the market rate is 50% higher on a specific day, RoomPriceGenie might suggest €225. If most rooms are booked, the system may recommend increasing the price further.
The system manages daily price adjustments automatically, allowing you to focus on exceptions. For special events like a concert, RoomPriceGenie detects increased demand and sends you a notification with a suggested price. If you don’t adjust it, RoomPriceGenie will gradually revert to normal pricing over the following days. This setup ensures you can concentrate on strategic decisions while RoomPriceGenie handles routine pricing updates.
Revenue management has gained significant attention in the past three years, yet only about 7% of hotels globally use automated revenue management tools. Despite the buzz, many hoteliers still haven't adopted these systems. While this is an improvement from when we first started, it's clear there's still a large untapped market. Initially, many hotels were hesitant, but today, most recognize the importance of revenue management.
Adoption often happens quickly in specific areas. For instance, the inner city of Zurich has one of the highest penetration rates for revenue management systems globally, a trend that developed rapidly over two to three years. This shift shows how quickly a technology can move from a "nice-to-have" to a "must-have." As more hotels in a market adopt these systems, those without them start to fall behind, prompting rapid adoption.
There's often a disconnect between what solution providers think hoteliers want and what they actually need. Providers may see their technology as cutting-edge, but hoteliers are focused on guest interaction, not tech. The key is to demonstrate that technology can enhance their ability to manage guests and optimize operations, not distract from their core passion for hospitality. The goal is to convince hoteliers that the right technology can make their jobs easier and improve guest satisfaction, rather than shifting their focus away from people.
Regarding the RoomPriceGenie algorithm, we start with the same basic data from either the Hotel Management System (HMS) or the Channel Manager, so initially, there’s no difference. However, as we go deeper, the HMS provides us with higher-quality data that the Channel Manager alone can't offer. This richer data is crucial for our reporting and analytics, which helps you understand your performance and track key metrics.
While you don’t need to get lost in reports, having a clear overview of how things are going is essential. For instance, our integration with SabeeApp is a premium one, which offers enhanced capabilities compared to standard integrations. This premium connection allows us to perform advanced functions, such as length of stay analysis and automated adjustments, that aren't possible with a basic setup.
Overall, connecting to an HMS instead of just a Channel Manager gives you more comprehensive data and a more complete room pricing solution. With partners like SabeeApp, we can leverage these advanced features to better serve the hotel owners’ needs.
If you’re using an HMS that emphasizes automation, then pairing it with a revenue management system that also automates processes can be transformative. Many of our clients have transitioned from traditional on-premise systems to cloud-based HMS solutions combined with other automation tools, and they've found it life-changing.
For instance, clients have shared that before using our system, they’d start their day an hour early just to handle room pricing manually. Now, they no longer need to spend that extra time. SabeeApp also focuses on automating repetitive tasks that hoteliers typically handle manually, saving significant time.
With SabeeApp and RoomPriceGenie working together, you benefit from a comprehensive approach to automation, making your daily operations much smoother. Instead of manually checking competitor prices and updating spreadsheets each morning, our solutions handle these tasks for you, streamlining your workflow and freeing up your time.
This is a bit of a non-discussion because only about 10% of hotels worldwide have a full-time revenue manager. The reality is that not every hotel will have a dedicated revenue manager. Instead, most hotels will have someone on their team who occasionally wears the revenue management hat. Often, just a couple of hours a week is enough to effectively manage a revenue management system.
Revenue management systems excel at handling daily calculations and price adjustments. The person wearing the revenue management hat—usually the General Manager—focuses on strategy, which doesn’t change daily.
So, what’s the role of a revenue manager in the future? It will evolve. If the job is defined as spending all day analyzing data and manually adjusting prices, that’s outdated. The true value of a revenue manager lies in strategic decision-making, not in routine adjustments.
Our team includes former revenue managers from large brands, and they often found that having a full-time capacity didn’t always lead to better outcomes. Sometimes, having a dedicated person can create conflicts with the system. If a person doesn’t trust or use the system effectively, it undermines the whole process. In such cases, the system’s intelligence becomes less valuable, and the benefits of automation are lost.
I have mixed feelings about AI. While it can be beneficial, it’s important to understand its true capabilities and limitations. The current hype around AI, like ChatGPT, mostly involves natural language processing, which isn’t applicable to pricing.
Many industries use “AI” as a buzzword, but a study found that while 85% of companies claim AI is important, only 2% use it effectively. Often, "AI" is just a new label for old concepts like algorithms or computing. Providers may hide behind the term without explaining how their solutions work.
AI can be opaque, producing results without clear explanations. This lack of transparency is problematic for pricing, where understanding the rationale behind decisions is crucial.In revenue management, optimization algorithms are more suitable than current AI for pricing calculations due to the limited data in hospitality. However, AI excels in other areas, such as customer service and market intelligence, where it can enhance efficiency and accuracy.
We continually assess where AI can be best utilized. While AI may improve in the future, it’s not yet the right tool for pricing. As a hotelier, be cautious of the AI buzzword and focus on understanding the actual workings behind any technology.
Just as cryptocurrency and blockchain hype have waned, so too will the current AI excitement. Our role as technology providers is to use these tools wisely for the benefit of our customers, not just for the sake of using them.
Transitioning from static to automated pricing is a leap of faith. It's a significant decision because you're entering a totally new world. My advice? Go for it. The time will come where you will have to do it anyways, so you might as well start now. Finding the right solution involves talking to various providers to find one you’re comfortable with.
Remember, your revenue management journey starts once you've selected a provider. Ideally, you’ll find a long-term partner you can trust. Once you begin using a revenue management system, you’ll quickly see how you managed without it. See what you've been missing – it’s much easier and more efficient.
Looking ahead 15 years, I envision a future where technology is a hotelier’s best friend, handling repetitive tasks so you can focus on your guests. Every hotel will use an RMS, just as they use a PMS and channel manager today. RMS will become essential because it directly impacts your revenue.
Thank you, Marvin, for sharing your valuable insights into hotel revenue management. It's evident that while pricing may appear straightforward, it's actually about selecting the right solution and making it a central part of your hotel’s strategy. The range between static and dynamic pricing is vast, with many factors to weigh, making pricing decisions even more crucial. For hoteliers looking to stay ahead of the competition, revenue management technology is rapidly becoming essential.