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Condo-Hotels, Vacation Rentals Require Specialized Revenue Management Technology

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November 07, 2019
Branded Content
Fran Worrall

Groundbreaking IQrates solution addresses the needs of the alternative lodging market.

In recent years, increasing numbers of consumers have embraced alternative lodging, opting for condo-hotels and vacation rentals in lieu of traditional accommodations, and the trend shows no sign of slowing. Yet, as alternative lodging gains momentum, management companies have become more and more frustrated with the revenue management solutions available to them.

That news comes as no surprise to David Perkins, chief executive officer and founder of IQware, a leading technology provider to the alternative lodging sector. “Alternative lodging uses a different property management business model than hotels,” he said. “Traditional revenue management solutions don’t address the specialized needs of this market.” In the alternative lodging space, the primary customer is the unit owner. Therefore, a revenue management system must be able to treat each inventory component individually in terms of pricing and demand. “In a hotel, if demand for a particular room type is low, the property can always upgrade the customer to a different room type, so demand can be viewed as an overall demand for the entire hotel,” he explained. “In the alternative lodging market, inventory is extremely varied, and upgrading a customer isn’t always possible. A suitable unit type may not be available, or the upgrade may end up costing the owner.”

Moreover, traditional revenue management solutions only obtain basic information from the property management system to predict demand, set pricing and maximize profitability. That model works well for hotels, which typically have only a few room types, but not so well for condo-hotels, which often have 20 or more room types, or for vacation rentals, which have as many configurations as there are homes. “Managers of these kinds of properties need specialized revenue management technology that addresses the diversity in inventory as well as the large number of unit types,” he said.

Earlier this year, IQware introduced IQrates, a revenue management solution that works for the alternative lodging market as well as for the traditional lodging sector. Like most revenue management solutions, IQrates monitors and optimizes every aspect of the revenue management process, including price, discounts, market mix, allocation, stay restrictions, room type differentials, and corporate and group management. However, it also takes into consideration that certain variables, such as booking pace and travel patterns, are different in the alternative lodging market. So, rather than evaluating global occupancy and demand, IQrates evaluates demand at the room type level. And, rather than using a simple price factor to make recommendations on various room types (in a hotel, for example, a king room may cost $20 more than a queen room), IQrates evaluates the exact price recommendation of each unit or room type using an adaptive algorithm that builds a library of customized sales patterns specific to each inventory component.

The solution includes a range of comprehensive reports and easy-to-read charts and graphs that assist managers in making profit-maximizing decisions. Data is prioritized in order of importance and displayed on a user-friendly dashboard for quick access and interpretation. An enhanced user interface enables the display of unlimited inventory types.

According to Perkins, IQrates is the first revenue management system that combines managers’ expertise with innovative mathematical methods of “reinforcement learning” for making decisions about pricing and revenue. “This comprehensive approach provides maximum in-depth monitoring across the board and leads to the highest possible yield,” he said, noting than many users have seen revenue increases of up to 20 percent.

IQware has worked closely with its largest alternative lodging customers to find out exactly what they want in a revenue management solution, and the company is ready to provide it. “IQrates is a proven revenue management system in the traditional hotel space, and it now addresses the unique needs of the alternative lodging segment with its advanced features and functionality,” Perkins concluded. “The solution not only helps customers increase revenue but also boosts bottomline profitability by optimizing every aspect of the revenue management process.”

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