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In-House vs Outsourced Hotel Revenue Management: Which to Choose?
In-House vs Outsourced Hotel Revenue Management: Which to Choose?
Imagine a scenario where a hotel has been struggling with growing its revenue for the past few months. One day, the hotel owner asks their hotel staff (hotelier A and hotelier B) - Should we go with in-house revenue management staff, or should we outsource revenue managers?
Hotelier A suggests in-house revenue management whereas hotelier B suggests outsourcing the revenue management professionals. Upon listening to this, the hotel owner faces the dilemma of which approach is best, and which one is better.
If you are also a hotelier facing a similar issue, then this blog is for you.
This blog explores the differences between each approach to help hotel owners like YOU make an informed decision.
What is hotel revenue management?
Hotel revenue management is a data-driven approach designed to optimize pricing strategy to maximize revenue.
Employing a dynamic pricing model, this approach strategically adjusts room rates by predicting demand, real-time market dynamics, and customer segmentation to optimize occupancy and revenue performance.
What is the difference between an in-House and outsourced hotel revenue management?
Both in-house and revenue management outsourcing share a common goal – to enhance revenue.
But let’s learn about the difference between the two:
Meaning
The in-house hotel staff is responsible for increasing the hotel’s revenue by selling the right room to the right guest.
Outsourced revenue management service refers to the process of hiring experts, agencies, or consultants, typically working remotely, with the goal of maximizing hotel revenue. The hotel relies on specialized external providers who bring expertise, tools, and insights to optimize revenue.
Cost implications
The cost of in-house management depends on the experience of the manager or the hired staff. Additionally, you also have to bear the infrastructure and equipment costs.
Whereas outsourcing revenue management services can be cost-efficient. There is a monthly fee, but you don’t have to bear any employee costs. The other reason is that they work remotely, and you don’t have to incur any equipment expenses.
Size of the hotel
4–5-star standalone properties generally prefer in-house teams, as they have direct control over revenue.
Budget hotel owners benefit from outsourcing revenue management services as it is a cost-effective option for them as compared to full-time revenue managers. Due to their limited budget, they prefer to pay a one-time fee rather than incur an ongoing overhead cost.
Communication
In-house revenue managers follow a two-way communication approach. They are physically present in the daily meetings.
Whereas with outsourced management, there is no miscommunication as they are directly in touch with general managers and owners. They are available on calls and virtual meetings throughout the day.
Control
In-house management has direct control over strategies and decisions, which enables hotels to implement changes effectively.
On the other hand, outsourced experts don’t have direct control over strategies, they may have some control but not directly. This means that they require approval from the owner. There’s no guarantee that in-house hoteliers will consider their inputs while making decisions or not.
How can BOTSHOT revenue management services help you?
With BOTSHOT’s revenue management services, we provide you with expert revenue managers to not only increase but maximize your revenue potential.
This way, you can enhance guest satisfaction, get more REPEAT bookings, and also become more visible on OTAs.
Our revenue management experts use:
- 360-degree OTA management to increase visibility and maximize revenue potential
- Demand forecasting enables you to prepare ahead of time
- Property analysis to identify areas of improvement to enhance guest satisfaction
- Competitor Analysis on a regular basis to give you an edge over the competition.
