Beonprice’s RMS sets the right price for every single hotel room 24/7
Spain · Jul 03, 2018· By David Fernández Day
Ranked as 5th best RMS platform globally, Beonprice uses AI to stay ahead of competitors
“I don’t go into rooms. I price them,” was the astonishing revelation made by a revenue manager of a well-known luxury hotel.
Indeed, revenue managers only have to price rooms based on demand-supply data, customer demographics and competitor behavior. They don’t need to see the rooms. They are purely data-driven. But hoteliers can no longer rely on massive spreadsheets to make real-time pricing decisions. With online travel agents (OTA) dominating room sales worldwide, hoteliers are having a hard time trying to catch up with actual demand and prices set by competitors.
However, computerized revenue management systems (RMS) have become so complicated that only large international hotel chains can afford the expensive data analytics to achieve optimum room rates and profitability.
Founded in 2013 by two computer engineers in the centenary town of Salamanca, Beonprice has won accolades in Europe and in Silicon Valley USA. Funding and business connections from the Founder Institute have launched the unknown Spanish brand into the global arena. Beonprice now has offices in USA and Latin America, fast becoming one of the world’s top RMS companies.
With sales exceeding €1 million in 2016, Beonprice secured a Spanish funding round led by K Fund and Sodical to raise €1.4 million in 2017. To compete for a bigger share of the international market, co-founders Emilio Galán and Rubén Sánchez are re-investing every cent to focus on R&D to create an even more powerful AI server with superior machine learning capabilities. A new research facility has been set up in the Madrid Google Campus to develop better revenue management and customer-centric solutions.
Back in Salamanca, CEO Sánchez and CTO Galán won Startup Olé 2017 to showcase Beonprice at their alma mater Universidad de Salamanca’s 800th anniversary – a prestigious event attended by King Felipe VI of Spain and Marcelo Rebelo da Sousa, President of Portugal.
Best margins in real time
Beonprice is a user-friendly RMS program that shows key hospitality market data including real-time room rates of competitors, quality ranking and customer behavior on a single dashboard. With just a few clicks, managers can quickly adjust room rates simultaneously across distribution channels like hotel websites, OTA and even Airbnb.
A fully automated SaaS is also available to free up management resources to focus on operations and customer services. The RMS collates and interprets real-time market intelligence data including seasonal demand, competitor pricing and quality ranking to produce the most optimum mix of room prices 24/7. Predictive analytics help hoteliers to maximize revenue per available room (RevPAR) every day – squeezing out the best margins possible in real time.
Industry experts have estimated the global hotel market will be worth US$703 billion by 2021, having reached US$534 billion in 2014. The luxury sector was valued at US$15 billion in 2015 and is projected to exceed $20 billion by 2022. Tourist dollars spent at hotels and resorts are likely to hit US$1 trillion in 2018.
With so much a stake, it is surprising that less than 10% of hoteliers worldwide actually use RMS to maximize RevPAR. In the1990s, many hoteliers relied on massive spreadsheets and in-house database systems to achieve revenue targets. Today’s “intelligent RMS” is expensive and accessible only to large hotel chains.
Many hotel revenue managers admit feeling “lost” when trying to understand and use the different types of RMS software in the market. In fact, it was a relative who complained about this issue that prompted Rubén Sánchez and Emilio Galán to design a more user-friendly RMS pricing model at Madrid Founder Institute in 2012. Beonprice now offers bespoke plans to 2,000 hospitality and tourism companies.
“Friendly and powerful” partnerships
Shopping around for RMS can be confusing, especially for small to medium-sized hoteliers who are often bogged down by operational and staff training problems. Besides the well-established RMS companies, new startups like Duetto, Rainmaker and Pricematch have already entered the market for intelligent RMS.
Founded in San Francisco in 2012, Duetto is armed with funds totaling US$33 million to further develop its SaaS platform to integrate with hotel loyalty programs, guest databases and online marketing channels. Rainmaker, a long-time RMS manager for casinos like Caesar’s, has a strong foothold in the hotel market since 2009 with integrated RMS solutions for Omni hotels and resorts. Paris-based Pricematch, that acquired European rival PowerYourRoom in 2014, is now part of hoteltech giant Priceline.
But the leader of the pack is IDeaS that created the first cloud-based RMS in 2003. The American company has cornered the market with 7,000 hotels covering over one million rooms for global brands like Fairmont, Shangri-La and Kempinski. IDeaS is now part of the SAS business intelligence and analytics group.
But Beonprice is catching up fast as 5th best RMS – not far behind IDeaS top spot in a 2018 hotel industry survey. The Spanish firm has also been recommended by independent RMS consultants for small and medium-sized hotels. This is due to Beonprice evolving into a more industry-led and client-oriented platform. A new corporate brand was launched at FITUR, an international tourism trade fair in Madrid, Spain. CEO Sánchez explained that it was not just a design change but a people-driven focus to help hotel staff to use RMS effectively - to be better in what they do.
Competition from OTA
RMS and staff training to use new technology account for the bulk of hotel overheads.
Bernard Ellis, vice president of industry strategy at Infor EzRMS, believes that the RMS industry is in a replacement cycle. Many hotel chains that had previously relied on proprietary systems are opting to outsource to RMS experts, so that hoteliers can focus on the core business of hospitality management.
Price elasticity and hotel branding are also becoming more important. Market leader IDeaS has already adjusted its demand-supply algorithms to include OTA hotel ranking data. For example, the RMS can compute a client hotel’s pricing power based on TripAdvisor ratings and reviews to maximize profit.
Beonprice already has a patented BQI hotel quality index and is expanding into new markets by collaborating with Indra TMS and Oracle Hospitality Opera. Integrating RMS into in-house hotel management and reservation systems will reduce data processing time and produce more accurate predictive analytics. The Indra-Beonprice RMS will also manage all business operations, distribution channels, e-payment tools and customize cross-selling opportunities.
However, new competitors are entering the market as RMS products become more mass market and affordable. User-friendly, digital Big Data dashboards will also boost RMS sales to smaller hotel operators. A strong contender is OTA giant Expedia’s Rev+ Tool that was originally developed for partner hotels. Expedia and other popular online booking platforms may limit growth of RMS startups like Beonprice.
In 2015, OTA accounted for 71% of all online sales in Europe and 52% in the US. For decades, the OTA like Expedia have accumulated massive amounts of market-sensitive data from hotel partners and customers. It is only a matter of time before such cash-rich and data-rich travel companies will diversify into the RMS hospitality sector.
Edited by Suzanne Soh