In short: Outsourcing revenue management means entrusting the day-to-day management of pricing and distribution to an outside expert, based on a written strategy. This makes sense when a hotel doesn’t have the volume to justify an in-house position, or when the team doesn’t have the time to monitor the market on a daily basis. The alternative is to train the team so it can manage these tasks independently.
What is revenue management outsourcing?
An external revenue manager remotely adjusts the hotel's prices, restrictions, and distribution, with access to the PMS, the channel manager, and, if applicable, the RMS. He or she monitors booking trends, the competition, and events, and reports regularly to management.
In-house, outsourced, or self-managed: What are the options?
An in-house revenue manager: a daily presence, but with full salary costs and a skill set that is difficult to recruit and replace.
Outsourced revenue management (day-to-day): an expert who manages pricing on a daily basis on behalf of the hotel, for a fixed monthly fee.
Supported autonomy: The hotel remains in control, and an expert trains the team for several months until they can manage on their own.
No single model is inherently better. The right choice depends on the size of the hotel, the experience of the team, and the complexity of the guest base.
When Is Outsourcing Worth It?
when prices are changed infrequently, or only in response to competition;
when management handles revenue in addition to everything else;
when the hotel relies heavily on one or two OTAs;
when an RMS has been installed but is not actually being operated;
When opening a hotel, when you have to build a strategy from scratch.
What does the outsourcing process actually look like?
At GROOM, the day-to-day routine never begins without two prerequisites: a revenue management audit and a written strategy approved by management. Next:
Setup of access and tools;
day-to-day management of prices, restrictions, and distribution channels;
regular meetings with management, including monitoring of key performance indicators (occupancy, average rate, RevPAR, channel mix);
adjusting the strategy each season.
Distribution is included: parity, visibility on OTAs, and the importance of the direct website.
What pitfalls should you avoid?
Outsourcing without a strategy: the service provider reacts on a day-to-day basis without a clear direction.
Losing sight of the big picture internally: The team needs to understand decisions, not just accept them.
Confusing RMS with a revenue manager: A tool suggests prices; it doesn't set a strategy.
Frequently Asked Questions
How much does outsourced revenue management cost?
The cost depends primarily on the size of the hotel and the complexity of its guest base. It is generally expressed as a monthly flat fee, following an audit and strategy phase. We develop a customized proposal after an initial discussion.
Do we maintain control over our prices?
Yes. The strategy is approved by management, and any major decision is discussed before being implemented.
Can we move on to autonomy next?
Yes, that's actually a common approach: outsourcing the initial setup phase, then training the team to take over.
Where should I start?
Check out our revenue management and distribution offerings, or let's take thirty minutes to discuss them.