Every hotel can benefit from automated revenue management. Boutique or hostel, independent or chain, there are huge potential revenue uplifts that can’t be ignored.
However, despite the clear advantages, many hotels still rely on outdated, manual methods to set pricing strategies, leaving significant revenue on the table – and revenue managers at risk of burn out. This article explores the revenue management revolution, and how hoteliers can overcome the legacy mindset to take advantage of real-time pricing automation.
The problem with manual revenue management
A surprising number of hotels today either don’t adjust their pricing at all or base their decisions on spreadsheets and historical booking reports. This approach creates inefficiencies, as hoteliers spend excessive time gathering and analyzing data instead of making long-term strategic decisions.
Without an automated RMS, revenue managers must manually pull data from multiple sources – property management systems (PMSs), competitor pricing reports, market trends – before even beginning to set rates. This process is time-consuming and inherently flawed, as pricing based on past trends fails to account for current market fluctuations. As a result, hotels often find themselves reacting too late to changes in demand, missing out on potential revenue.
The real-time pricing revolution
Automated RMS solutions like Atomize, a Mews company, revolutionize this process by leveraging artificial intelligence (AI) and machine learning to adjust pricing in real time. Instead of relying on outdated reports, these systems analyze live market conditions, booking trends and competitor pricing to determine the optimal rate at any given moment.
This shift from reactive to proactive revenue management enables hotels to maximize their revenue potential. Instead of manually adjusting rates once a week – a process that can result in lost revenue opportunities – an automated RMS ensures that pricing decisions are continuously optimized based on the latest data.
The current state of RMS adoption in hospitality
Despite the clear advantages of revenue management automation, adoption remains relatively low. When Atomize launched eight years ago, over 90% of hotels relied on manual revenue management. While the adoption rate has increased slightly – estimates suggest around 20% of hotels now use an RMS – the majority still rely on spreadsheets and labor-intensive work.
This slow uptake is surprising given the clear return on investment. For instance, Mews is a cloud-native PMS with a forward-thinking customer base. But even among its tech-savvy hoteliers, nearly half still manage pricing manually. These hotels are missing out on significant revenue potential by not leveraging automation.
Automated revenue management is for everyone
While some hoteliers assume that RMS solutions are only for large hotel chains, the reality is quite different. Atomize serves a wide range of properties, from boutique hotels to large resorts. All that’s necessary is sufficient booking volume to benefit from data-driven decision-making. The general rule of thumb is that properties with ten or more rooms can gain measurable advantages from implementing an RMS.
The benefits of automated revenue management may diminish slightly for long-stay accommodations, where pricing strategies tend to be more static. In contrast, dynamic environments such as city-center hotels, where demand fluctuates frequently, stand to gain the most from real-time pricing adjustments.
Overcoming barriers to RMS adoption
One of the biggest reasons for slow adoption is awareness. Many hoteliers don’t realize that such technology exists or understand its benefits. Those who do may be hesitant to trust an algorithm with pricing decisions, particularly if they have relied on manual methods for decades.
There is also a misconception that RMS solutions are prohibitively expensive. However, when viewed in the context of potential revenue uplift, the cost of an RMS is relatively small. For a hotel generating €100,000 in monthly revenue, even a modest 15% increase through optimized pricing would add €15,000 per month, far outweighing the cost of implementing an RMS.
Real-time pricing strategies
Revenue managers today have multiple pricing strategies at their disposal, ranging from traditional updates three times a day to fully real-time automation. It’s only the latter that lets hoteliers capture market nuances instantly. Whether that’s responding to sudden demand spikes or adjusting for specific room types months in advance, real-time pricing provides hotels with a competitive edge.
As a case in point, consider the ‘Taylor Swift effect’ – high-impact events where hotel demand surges immediately. Waiting four or five hours for a rate adjustment can mean lost revenue opportunities.
The advantages aren’t limited to large-scale events. Smaller hotels, too, benefit from automation. A boutique hotel with only 12 rooms might sell out overnight due to an unexpected surge in demand. Without real-time adjustments, they risk missing revenue opportunities that a responsive system would have captured.
This new generation of revenue management has created a divide among revenue managers: those who fully trust algorithms and those who remain skeptical. Atomize accommodates both mindsets, with hesitant users able to view price recommendations before enabling full automation. Over time, nearly all users transition to autopilot mode, realizing that the system often outperforms manual adjustments, even those based on years of experience with spreadsheets.
The value of an embedded RMS
The true power of an RMS is unlocked once it’s fully embedded within a PMS. This will create a more seamless experience for hoteliers, allowing them to manage rates directly within the PMS without switching platforms. Beyond interface improvements, deeper data integration will unlock powerful new possibilities, such as dynamic guest profiling and personalized pricing.
For example, if the data indicates that a certain guest segment typically spends over €200 per night, their pricing strategy should reflect that behavior. This level of dynamic pricing, based on a guest’s total value – including room revenue, dining, and other spending – represents the future of revenue management.
What to ask a potential RMS provider
Traditional RFPs (Request for Proposals) are becoming obsolete in an era dominated by AI and automation. Historically, RFPs focused on listing desired features, but as software evolves, the focus should shift to what a system needs to accomplish rather than specific functionalities.
Hotels evaluating an RMS should start by identifying their core business objectives. Instead of asking, “Does the software have this feature?” they should ask, “Can this system help us achieve X revenue growth or Y operational efficiency?” This consultative approach fosters more meaningful discussions and ultimately leads to better software decisions.
Summing up
The world of the modern RMS is only just beginning. As the interplay between technologies deepens, revenue management will impact every area of a hotel’s business, unlocking new revenue streams and untapped income.
Want a glimpse into what this future looks like? Check out episode 16 of Matt Talks, Unlocking Revenue Potential. Mews CEO, Matt Welle, talks to Atomize CEO, Alexander Edström, about how technology is reshaping hotel revenue management.
Watch the episode
About Mews
Mews is the leading platform for the new era of hospitality. Powering over 5,500 customers across more than 85 countries, Mews Hospitality Cloud is designed to streamline operations for modern hoteliers, transform the guest experience and create more profitable businesses. Customers include BWH Hotels, Strawberry, The Social Hub and Airelles Collection. Mews was named Best PMS (2024, 2025) and listed among the Best Places to Work in Hotel Tech (2021, 2022, 2024, 2025) by Hotel Tech Report, and won the Tech Hero 2024 Award at CIODAY. Mews has raised $335 million from investors including Goldman Sachs Alternatives, Kinnevik and Notion to transform hospitality.
www.mews.com
