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The New Era of Revenue Management for Independent Hotels with Chas Scarantino · GAIN Momentum

• GAIN Momentum episode #109: The New Era of Revenue Management for Independent Hotels with Chas Scarantino === Adam Mogelonsky: Welcome to an exciting episode of the GAIN Momentum podcast. Today, we have our co-host Vincent Somsen, and we have our special guest, Chas Scarantino, CEO of RoomPriceGenie. Chas, how are you? Chas Scarantino: I'm doing great, Adam. I appreciate you guys having me, and it's great to be here with you guys today. Adam Mogelonsky: It's fantastic to have you, and as we talked about before we went live, you are our first RMS company to join. So we're gonna give you the special task of not only the elevator pitch of what RoomPriceGenie is, but also giving us, in one sentence or less, what an RMS is overall. Chas Scarantino: Okay, great. Well, first of all, I'm honored to be the first RMS on the podcast. RoomPriceGenie, at a high level, is an RMS, revenue management system, and we focus on dynamic pricing for independent hotels and independent hotel groups. That means we take all the different data from the market, from the customer's PMS system, from their strategy, and utilize all that while thinking about demand trends and occupancy trends within the hotel to deliver the right price at the right time for each room. That's what we do, and we focus on the independent hotelier. Because of that, it's meaningful because a lot of our customers never had a revenue manager before they work with us. So it's very important that it's a system that's very intuitive and easy to use for someone who's never done it before, yet sophisticated and has all the controls in place for someone who's a professional revenue manager. Adam Mogelonsky: So within the RMS space, how can hotels use this technology, or specifically independent hotels, use this technology for incremental gains in revenue? Chas Scarantino: Yeah, it's a great question. To me, a revenue management system is an operating system that really maximizes their decision matrix around pricing. So how a hotelier uses one of these systems is that right now they're getting data from so many different places. Like I said before, it can be from the market, it can be their occupancy, it can be events that are happening in the area. Our hoteliers are sharp. They know all this stuff is coming at them, but they also have to manage the guest and deliver an amazing experience to their customers. So the way that they utilize an RMS for the incremental gains, if you will, on a daily basis, is the RMS system can do all this calculation constantly in the background. Then, depending on the specific hotelier, they can have it set up to update pricing automatically on their behalf. They can choose for it to make recommendations and then approve them. At the essence of it, the system never gets tired. The system never forgets to look at the data. The system never has a customer that needs something. So it's able to process huge amounts of data and do this in real time for the hotelier. For the sophisticated user, it acts as that layer that handles all of the details and allows them to think about revenue strategy. It allows that sophisticated user to take revenue management to the next level and start thinking creatively around different techniques that they could potentially deploy to increase their revenue. Vincent Somsen: Yeah, that makes sense. What do you say to those hoteliers that are really hesitant about implementing any artificial intelligence or any machine learning, anything that they don't have so much power over? Is there anything that you tell them, that you can assure them of, regarding certain risks? Chas Scarantino: Yeah, I would say I get it. It's scary. For a lot of our customers, they've been doing this themselves for years and getting by just fine. Because we work with independent hotels, we find ourselves having this conversation every day. We really have seen that we've got to take our customers on that journey with us. First, it's really important that whatever they choose to use isn't a black box. I don't want something just giving me pricing recommendations without really understanding why. I want to know the inputs that go into that. I want to be able to understand how I get the outputs from it. That's a core foundational piece to getting somebody comfortable with going on this journey. The next piece is really just starting to experiment. Sometimes it's as simple as thinking about how am I setting my pricing boundaries with my minimum and my maximum pricing per room, and just tweaking those a bit and adjusting them slowly over time. Then it might be thinking about how a lot of our customers just want 100% occupancy. Sometimes we have to take them on that journey that at 100% occupancy, you may be able to make the same amount of money at 95% occupancy, and then you're not worried about never having an extra room in case something goes wrong, because things go wrong. Then you go down that journey to more sophisticated things where it's letting the system start to give you recommendations on how to think about minimum stays and maximum stays. I think this journey is intimidating, especially when there are so many new solutions coming at you with AI and machine learning. As they're thinking about this, you should always look for something that also gives you full control, where you really understand every decision and recommendation that's being made. Vincent Somsen: Yeah. Is there any minimum number of rooms that a property must have to be able to work with you guys or perhaps create a win-win scenario? For instance, we were advising a small portfolio of two hotels in Prague, and they were saying, "Hey, we only have 70 or 80 rooms. We don't have a dedicated revenue manager. We only have a GM and a reservations agent that actually changes prices. Is it worth it for us to get an RMS in place?" Is there anything that you can tell us about that? Chas Scarantino: Yeah, it depends is the simple answer, or the complicated answer maybe. I would say that we have customers as small as five rooms. We have customers as large as over 1,000 rooms. I think the things that really start to play into that are where they're located and what segment they play in. Are they in that luxury segment where maybe there's not as much variability, but they're in a luxury segment where events will impact them from a much larger geography? I think those things really play into it. When you talk to a really small customer in a really rural area, that might be a hard sell. If somebody has five rooms and they've been doing that and there's not a lot of events and there's not a lot of changes. But once you get to 10 rooms and above, generally speaking, you're not adding that much more staff. So you're getting busier and busier, and you're spending less time thinking about revenue, pricing, and revenue management. I really do think it depends. When you get into urban areas, or even vacation spots or any of those kinds of places where there can be wild swings and surge events that happen, we've really seen customers of all shapes and sizes. Adam Mogelonsky: Well, one interesting thing about targeting independents and small groups is, as you said, no one really has time to look at another system. They need the insights right away. They need things to be automated. So what features does RoomPriceGenie have from a user interface point of view to really make things intuitive for these hotels that are so rushed to handle 20 other things? Chas Scarantino: Yeah, a couple of things. They're not sitting in front of the computer every day thinking about their pricing and waiting to tweak pricing. They've got to be running the property. Everything we develop, we think about how can we maximize the decision-making time for the independent hotelier, somebody who is stretched for time. It starts off in the simplest way. When they log into our system, they've got a calendar view that shows them every day of the month, what their occupancy is looking like, and simple visuals around whether pricing is going up or pricing is going down. They can click on a day and drill into all the metrics that matter. We want that easy place for them to see everything. The other thing when we think about the user interface is there's so much complexity that you can have with a revenue management system, but what do you actually need to do? How much of that do you need to do on a daily basis? We try to take those things that are going to be impactful in their day-to-day operations and surface those first and immediately. Another thing that we really focus on is making sure we can tell them each morning, in plain language, the decisions that happened since the last time they logged in, or the night before, or even that day. Why did we make the pricing decisions we made? Don't make them have to look for it. When they log in, that should be the first thing they see. Also, what pricing decisions did we not make because of something that's set up in your settings? Those all go into that intuitive nature of using the software. The other thing that we look at is where the hotelier is. I would love to tell you they're in the revenue management system all day, but they're not. If they were, it'd be a pretty bad experience for their guests. Where they are spending the majority of their time is in their PMS system. This past year, we've launched a feature that allows us to deliver our most important day-to-day features directly into their PMS system. The thought is to give them a single pane of glass where they are working consistently for 90% of the things that happen on a daily basis, but then have the revenue side and the pricing side available right there for most of the things they need to do in real time. If they need to go deeper and change settings, they can do that. When you think about intuitive software products, they always take the customer journey first. That's the most important thing they do. What customer journey does my specific user need to go on? I think we've always had a really focused view on that. Adam Mogelonsky: Wow. So the whole idea of a customer journey goes back to this idea of revenue strategies. You talked about that hotel that's trying to get to 100% occupancy, and now when you optimize for occupancy plus rate, you can get down to 95% and earn more. Then, all the way down to the bottom line, there are additional strategies to maximize revenue. Within that, a big push that we're looking at right now in the hotel space is direct bookings, which you could say is channel optimization. What does RoomPriceGenie help with in that regard? Chas Scarantino: Yeah, we really try to help our customers think about how to balance their inventory across different channels, as well as the give and take of what a channel actually costs. Our customers know intuitively that they're paying more when they use an OTA or go non-direct. We help them quantify that on a daily basis and think about, as you're further out and maybe your occupancy is already trending in the right direction, why don't you start to deprioritize some of the channels that cost you more? We help them think through what they put on the channels. It's not just about how much you're using them, but what offers you're putting on the channels. Do they have a strategy about non-refundable rooms versus refundable rooms and that kind of thing? It's really about thinking through all of those components and then letting the software guide you. If we make these changes in the settings that are going to drive less business through the channel and more direct bookings, we can do that right now because you've already got occupancy that, historically, is above where you were last year. Or, if it's below, maybe it's, "Hey, we need to push more to the channel." We try to give them that information through the software. The other thing is software can't do everything. I wish it could. Another thing we do is hire revenue managers in our business. Everybody our customers work with is a revenue manager or was a former revenue manager. About 50% of my sales team came from hotels, specifically from the revenue management side, and on the customer service team, 100% of them did. I say that because, going back to taking the customer on that journey and helping them think through things, when a customer has become reliant on one specific channel that might be costing them more, you've really got to get them comfortable with trying different things. Even though it may make them more money, it's scary. I'm potentially losing that top rank on my favorite OTA if I don't give them as much inventory, and I'm nervous about how that's going to impact my hotel's revenue. So there is very much a human element to this that we try to coach our hotels on. Vincent Somsen: Yeah. Personally, I'm still so surprised when I look at hotels, especially in the US, that have static rates. They say, "Okay, during this season of the year, it's going to be $219 per room," and they still have a lot of rooms. I honestly don't know how they manage. It's really bonkers. A lot of the time they don't know where those rooms are exposed. You could be selling through Expedia, for example, but Expedia might sell them through one of their hundreds of partners. Exposing your inventory on channels where you actually know where it's being exposed, and what rates and discounts are being offered, is super important. I suppose with an RMS like yours, you can solve that. Chas Scarantino: We definitely try to. We definitely focus on helping them with that. There's a lot going on with AI right now that can get your rates exposed in a lot of different places that you might not want them, where they're grabbing that information from all the different channels. We definitely help our customers with that a lot. It's a big topic of conversation. Adam Mogelonsky: Yeah. Now that you mentioned AI, we can transition to talk about what RoomPriceGenie is doing in that regard. Any opening things you want to mention? New product launches, anything? Chas Scarantino: Yeah, let me give you, first of all, our philosophy around it. We are super excited about AI. We think it's creating so many different opportunities from both what you can do with data and what you can do for the customer. When I think about AI as it pertains to our customers, we think about it through two different lenses. First is the pricing side. From a pricing perspective, we have stuck with our focus on machine learning and deep machine learning because it doesn't become a black box. I can tell our customers exactly what data endpoints have gone into our decision-making around their pricing, and that's really important. We can also give a customer full control over what that price looks like and how they want to tweak it. From that side, we've stayed very much on the machine learning side. The flip side is that the AI piece is so exciting because we can now start to bottle up all of the years of revenue management experience we have, both in the company and through the software, and deliver real-time insights and feedback to the customer. Like I talked about earlier, we just launched our AI summaries. Every day when somebody comes into RoomPriceGenie, we tell them why we made the decisions we did, how they could tweak their settings to potentially make their prices go up a little bit, or if things aren't trending positively, what they could do. In the past, that always required a phone call. Now we can do it across 5,000 customers every day. That just means we're delivering a more powerful product. The future of that is unlimited. We're thinking about how we can now help you think three, six, nine, or twelve months out about your forecast and simulate different strategies. We're also thinking about not just what settings you could change, but potentially going so far as having you come in, showing you the settings, and if you want us to update them for you, we can do that. There are so many different things we can do with AI. On the reporting side, we're thinking about it a lot too because dashboards and reporting are something I've spent my whole life building in software. You spend so much time building them, and they're one of the least-used functionalities in almost every software product on the market. For us, it's something we're always thinking about. How can we use AI to deliver exactly the reports somebody wants to see versus giving them a whole host of dashboards they've got to figure out? Vincent Somsen: Yeah. How do you see the role of the revenue manager evolving in the next five years? Do you think they'll still work with these tools? How is that going to work if there's going to be a lot more AI and autonomy in the tools? Chas Scarantino: I talked about it earlier. I think a revenue management system is an operating system that takes all of the information that has to be accounted for into account in real time, constantly looking as much as a year and a half ahead to make decisions. No one can capture that much data. I think this is going to make the job of the revenue manager much more exciting because they can start thinking about a lot of different concepts. They can start thinking about more revenue per occupied room. How do I maximize the revenue from every guest that comes into the building, and what do I do with that? They can think about different campaigns to drive inventory to different places. A buddy of mine, who's also a customer of mine here in Cascais where I live, and I were talking about it the other day. Because he's freed up so much of his time from the daily work, he started thinking about new ways he can drive revenue. The other day, he looked at all of his local staycation guests who had chosen his hotel from the local market, and he upgraded all of them. In one fell swoop, he upgraded them to the rooms that he's least likely to sell at the last minute. He freed up his more valuable inventory, and he told them all, "Because you're local, I wanted to give you an upgrade." Now they're all telling that story in the market. These are the kinds of things a revenue manager who used to be running around with their hair on fire trying to figure out everything happening in their market can now focus on—much more exciting things that build brand loyalty and local customer value. I think if it's done correctly, it should really increase the breadth of what a revenue manager can think about on a daily basis. Adam Mogelonsky: That's pretty interesting, the whole idea of room upgrades to free up additional rooms that are more likely to sell. I'm wondering if you could unpack, within RoomPriceGenie, the features that would indicate that these suites are not likely to sell, so you can surprise and delight someone and get more revenue that way. Or do you have some automated upgrade or dynamic upgrade feature of some kind? Just unpack how you'd tackle that from an automation standpoint. Chas Scarantino: We don't have the automated upgrade functionality yet, but it's definitely something that I love. What we do allow our customers to do is see all of their different room segments and room types, how they're selling, how they're trending, and how they've historically trended by time of year, time of month, and even down to the day of the week. For someone like the customer I was talking about, they can look at a weekend and say, "Okay, I'm now three days out. I've got these rooms all full, and RoomPriceGenie is telling me these are my top-selling rooms and that I could actually be charging more for them. I've got these rooms that are my most expensive rooms that still have availability." If I upgrade a customer to that room, we can help them see those trends ahead of time and play around with different scenarios. But once again, that's something we sit down with our customers and coach them on. It's not necessarily intuitive if you haven't been thinking about it before. Another thing we can help them with is thinking about shoulder nights and weekends. We can help them analyze questions like, "What if I did a minimum stay around some of my business-leisure travelers and offered them an extra night on a Thursday that would help secure that booking? Or offered them the option to stay until Tuesday on a weekend because so many people work remotely now?" We can help them see the data behind those decisions, the revenue trade-offs, and how they could discount rooms accordingly. That's where we really lean in from the software side to help. Adam Mogelonsky: Yeah, I love that you mentioned the word trade-offs because nothing is a silver bullet. It's all incremental quick wins in everything that we do, and just allowing hotels the freedom to think about freeing up rooms or the shoulder night situation. On the note of digital nomads and people working remotely, you've mentioned the term historical data a bunch of times. But to push back a little bit, things are changing very fast now. So I'm wondering how you think about historical data in a rapidly changing world, and how you can adapt either the machine learning algorithms or incorporate some other layer to account for new changes that are occurring. Chas Scarantino: Yeah, we actually take future-looking data more into our pricing suggestions. Historical data fuels our trend analysis, if you will. RoomPriceGenie took a different approach to this. A lot of RMS solutions compare competitive rates and really focus on that, whereas we take a market index approach. We look at a competitive set, but we also look at a non-competitive set because the hotels in your competitive set may be doing terrible pricing. You might be benchmarking yourself against the worst possible group. Then we take another set, which includes hotels in your market that we can tell are dynamically pricing. We also have a third set that looks at things like Airbnb data or short-term rental data. We help our customers think about which of those they want to give more importance to in their market index. Then we use that market index to understand how the market is trending today and how it should be trending based on the data we're collecting. I talk about historical data a lot, and we'll use it to help customers think strategically, but the algorithm is much more forward-looking. It's looking at the things I just talked about, along with your occupancy, your pickup, your booking window, and all of those factors as they change to make a recommendation. You're right. Demand trends are completely upside down right now in most of our markets. I was in Scotland last week talking to a bunch of partners as well as customers. The overall feedback was that we definitely feel some softness. At the same time, the bigger thing we're feeling is that our booking window has completely flipped because so many more customers are not taking flights. They're staying more local. They're getting in the car or on the train, and because of that, they don't have the urgency to book the hotel since they can make it a much more last-minute decision. In reality, that's where a revenue management system helps even more because it gives you those trends. As a hotelier, your knee-jerk reaction is often, "I just need to lower prices. I need to lower prices and fill rooms." If you want to do that, you can. But we try to give you guidance and say, "Here's what the market is actually doing, and here's what we would recommend. Don't go that far." Adam Mogelonsky: Yeah, that's very interesting about the drive-to market. You don't have the flight data, and naturally, if you have a flight, you're anxious about securing that hotel booking because otherwise you're going to be Ubering around town and incurring hundreds of dollars in expenses trying to find a hotel room if you leave it until the day before. So this whole idea of compressing average lead times is proof of concept for an RMS in terms of having more automated features to help you forecast accurately. I'm wondering if you could walk us through how a system really helps a hotel increase and maintain its pricing and revenue while these lead times are being compressed in this unusual situation we're in. Chas Scarantino: Yeah, it's hard. It's tricky. I think one of the things people don't realize is that, at least for us, the incremental gains we generate for our customers don't come from some wild pricing swing because there's a big concert and we catch it. We do catch those things, but the majority of our price changes are within about a 4% range. We're just making them constantly. We're making them to help sell more rooms and to adjust pricing very dynamically. In times like these, when booking windows have so much elasticity, it's super important that you're making those micro-adjustments in real time with as much data as possible to avoid overcorrecting or undercorrecting. If you looked at your occupancy, your RevPAR, and your market data once a day, you'd still be doing much better than someone managing pricing manually. We're looking at it constantly. With every new room that's booked and every change in the market, we're making adjustments. That's where a revenue management system really helps during times like these. It's not the wild pricing suggestions that make the money. It's the consistent upward and downward fluctuations that help drive the best possible balance of pricing and occupancy for the customer. Vincent Somsen: Yeah. Chas, I saw that you primarily work with hoteliers. Is it correct that I also saw somewhere on your website that you supply data to your partners as well, so they can use your data on their platforms and provide it to their customers? Chas Scarantino: Yeah. We just launched a new tool that I mentioned earlier, Revenue Intelligence. It allows our product and our most crucial daily functionality to sit inside the PMS system. They can actually interact with RoomPriceGenie within their PMS. That allows them to have the data side by side. They can look at occupancy data, pricing data in RoomPriceGenie, see surge events in real time, and view our summaries that explain what's changed on a daily basis while they're in their PMS. By bringing those two data sets together, it had one intended consequence, which was making those real-time decisions faster because it's super important for them to be able to do that. It also had one unintended consequence. We're seeing a lot of our hoteliers open up pricing data to more people in the organization. More people who are interacting with the PMS are gaining access to the RoomPriceGenie data, and they're saying it's influencing other decisions they hadn't even considered outside of pricing rooms. Vincent Somsen: Yeah, I can imagine making schedules becomes a lot easier as well if you can anticipate the forecast. I remember creating schedules myself when I was working in hotels over a decade ago. We would look at the weather, check banqueting orders, see if there were any groups coming in, track people on sick leave, and look at the PMS for occupancy. But it was all manual, and you would spend hours doing that because you had a team of 20 to 25 FTEs. It was a mix and match, but it literally took four or five hours each week to create a schedule. I suppose with the data you can pull out of RoomPriceGenie, you could make it much faster and simpler. Now, with AI combining that data, even creating an internal tool influenced by your data would be very interesting. Chas Scarantino: Yeah, we always talk about the ROI that a revenue management solution can deliver to a customer. Some of the biggest gains are simply getting time back. Now this really important task of pricing your rooms is being done, and it gives you a lot more time to focus on other things, like the creative revenue management ideas we talked about earlier. A lot of the time, it's also about spending more time with your guests and making sure everything is going well. That time-back component is a big benefit that hoteliers really value. Adam Mogelonsky: Yeah. On Vincent's point about incorporating all these different data points, I'm always looking at the guests who are going to contribute the most to total revenue, not just room revenue but total revenue management through ancillaries. It's one thing to have a guest come in, pay $500 a night, and not spend anything on-site. It's a whole other situation when they come in at $400 a night, but they're dining, having spa treatments, ordering room service, and so on. What are your thoughts on total revenue management, and what is RoomPriceGenie doing to incorporate ancillary spend? Chas Scarantino: I love the concept. I think it's extremely interesting, and it represents a big next phase for the revenue manager. Right now, we haven't incorporated all of those other elements, but it's something we're constantly talking to our customers about. One of the big things this goes back to for us is our focus on our ICP. About 85% of our customer base never used anything before. They were doing nothing. Vincent Somsen: Well, okay... Excel. Chas Scarantino: Exactly. When you think about that, we're taking them on this journey with us. As these other concepts become more familiar, it's something we coach them on constantly. Now we're starting to have conversations about, "What's the next phase of revenue management look like for you?" We've always designed our product alongside our customers. Everything you're talking about, Adam, is absolutely the right next step. We recently hosted a conversation with some local thought leaders and hoteliers, and they were talking about the IRL experience trend, meaning "in real life," which I feel like ten years ago we just called real life. Vincent Somsen: Yeah. Chas Scarantino: Or just living. Vincent Somsen: It didn't have a name. Yeah. Chas Scarantino: It's important. Our customers are now thinking about, "Okay, I might not have a spa, but how can I team up with a local spa to dynamically provide volume to them?" And vice versa, those types of agreements are coming into place more and more rapidly. As the technology landscape expands across all of these different service providers, everyone is experimenting with, "What more can I do to bring these other life experiences into what my hotel can offer?" Within the independent hotel market, that's super important because they may not have the facilities to provide all of these experiences on-site. So, yeah, it's definitely a massive topic of conversation and a trend that we want to be on the leading edge of. Vincent Somsen: Yeah. Chas, I just had a question on that 85% of your ICP. Out of all independent hotels, how many do you think don't use an RMS right now? Chas Scarantino: The data that we've seen within the independent market is somewhere between 85% and 90% don't use one right now. Vincent Somsen: Yeah. Wow. Big opportunity. Chas Scarantino: On the independent side. Vincent Somsen: Fair enough. Yeah. I remember one or two years ago we were doing an assessment for a Portuguese chain with multiple properties. I think they had almost 10 properties, and they were still doing revenue management with Excel sheets. That was my understanding as well. Larger brands with three or four properties surely have an RMS in place because it's just too much manual work to do it themselves. But what you're saying is that's definitely not the case. It's interesting. Chas Scarantino: Definitely not the case. We are seeing a trend where more hoteliers are coming to us. The conversation has shifted from being purely educational every time to more hoteliers saying, "All right, I know this is something I need to invest in. Help me understand more about it and what I should be looking for." Vincent Somsen: How do you differentiate RoomPriceGenie from some of the other RMS providers? There are a lot of new players entering the market and releasing new solutions. With AI, there are so many new features coming out every day. How do you keep differentiating yourselves? Chas Scarantino: First and foremost, the good news is I think there are a lot of quality players in the market, and I think that's important to say. I think that's good for everyone because there are a lot of people doing this the right way. What separates us is that, from the beginning, we've always focused on the independent hotelier. I know I'm a broken record, but it matters so much because their experience with the software is unique. We've designed the product specifically for them and given them the level of functionality they actually need. For example, what we would do from a group displacement perspective is very different from what someone focused on large chains would do. It's simply a different product. From an automation perspective, we allow our customers to automate everything, and that's incredibly important for hoteliers managing revenue themselves. At the same time, we allow them to maintain complete control over everything. For some, that's part of their learning journey. For others, it's simply because they want to retain full control. I think that's another thing that differentiates us. Revenue Intelligence is also a major differentiator because we're meeting our customers where they already work. The reception from our PMS partners has been very exciting because it also gives them a valuable solution. We also talked earlier about our pricing philosophy. We're much more focused on a market index philosophy rather than purely direct competitive pricing. Adam Mogelonsky: I have a question about the business side of RoomPriceGenie. When you speak with sales teams at many of your competitors, or software vendors in general, they often avoid independents and small groups because the effort required to sell one hotel is about the same as selling 100 hotels. How do you streamline that process so your teams aren't overwhelmed by the amount of work it takes to close business? Chas Scarantino: It's a good question, and it's something we're always working on to become more efficient. The cornerstone is that once someone gets into the product, it's so intuitive that there's not much we need to teach them about using it. We spend much more of our time teaching them revenue management than teaching them how to use the software. That's something we've focused on from the beginning, and I think that's what allows us to be efficient. When it comes to reaching hoteliers, getting the message out, and helping them find us, it definitely takes more effort than selling to one group with 100 hotels. We've started working with more groups, but they're groups focused on independent hotels. Even then, it's a much more direct approach. We also try to provide thought leadership, share market trends we're seeing, and offer helpful resources to hoteliers. When you really think about deploying a software product efficiently, the only way to do it is for your customers to intuitively understand the product very quickly. Adam Mogelonsky: I love that you're teaching customers not only about the product but about the entire field of revenue management so they truly understand the value. On that note, I believe you have a joint report called The Hospitality Engineer. Can you tell us about that? Chas Scarantino: Yeah. We did a survey with one of our partners, RMS, and started looking at technology trends in hospitality. One of the things that really stood out was this new concept—not really a position, but more a way of operating—that we called the Hospitality Engineer. Think about it this way. A typical small independent hotel operates between three and ten software products. A hotel with roughly 20 to 75 rooms is usually running somewhere between seven and fifteen software products. The Hospitality Engineer is someone who focuses on how all of those connected systems work together. They make sure the systems function correctly, that the data exchanged between them is accurate, and that they're thinking about both the guest experience and the digital experience. This is someone who wakes up thinking about those systems every day. We're all guilty of this. We get an error in pricing, an error in the PMS, or another system, and we simply fix it. We don't usually investigate the root cause of what's actually creating that error. This person is focused on solving those root causes. It's especially important because, during the survey, about 70% of our customers rated their data accuracy as only a two or three out of five. If you fast-forward to today's AI world, there are many exciting tools available, but it's still garbage in, garbage out. AI performs exceptionally well when it's working with high-quality data. As a hotelier, clean, accurate data creates seamless integration across your systems today. It also prepares you to take advantage of future AI tools because those tools will perform much better if your data set is clean. That was one of the findings we thought was especially interesting. Adam Mogelonsky: Yeah. That's a very useful tool. When you think about the complexity relative to scale, you mentioned that a 20- to 75-room hotel can have upwards of a couple dozen systems. Then you consider that they have a very limited team to manage all those systems. The average person is switching between nine different browser tabs for web-based apps at any given moment. That can be a lot for anyone. Not to plug your product, but that ties right back into Revenue Intelligence in terms of having the product embedded in the system they're most likely to use, so they don't have to cross-reference different tabs or work across three different monitors. Chas Scarantino: Yeah. The switching cost between systems throughout the day is high. If you have to use three or four products in a day, the fewer times you have to switch between them, the more time you've saved. Adam Mogelonsky: Yeah. It's microseconds at a time. So, Chas, to close out and put a bow on it, where is the field of revenue management going? Chas Scarantino: That's a big one. I think it's going in a really exciting direction. The insights we can provide now are greater than ever, and they allow revenue managers to think more broadly than they ever have before. I'll give you an example. We help our customers think about events. When we first started, we focused on surge events, major events happening in their community. Now, with the changing technology landscape, we're helping them think about questions like, "What's the school vacation schedule in the neighboring community, and how could that impact my bookings?" Or, "What are the closest airline routes to me, and how could they affect my bookings?" As you think about the practice of revenue management, we've already talked about maximizing all the revenue within the organization, not just room revenue. Now it's also about thinking beyond your local community and attracting demand from other markets. Those are some of the really exciting developments. Then there are the more technical aspects. In a world of inflation, uncertain pricing, and constant market changes, you have to maintain a tighter focus on every dollar in the business and maximize every dollar. That side of revenue management is also extremely interesting. It's becoming increasingly valuable for revenue managers of the future to think about maximizing not only dollars coming in, but also dollars going out, and how all of those factors work together. Adam Mogelonsky: Wow. Yeah, it is very exciting. The bottom line that I love is that you're helping make things simple for hoteliers who already have so many other things to worry about. I love that. Chas Scarantino: That's the game plan. Adam Mogelonsky: Chas, is there anything else you'd like to mention before we close out? Chas Scarantino: No, this has been great. I really want to thank you guys for having us and for letting us be your first revenue management solution on the podcast. I'm honored to be here. I really appreciate everything. Adam Mogelonsky: Chas, thank you so much. Vincent Somsen: Thanks for your time, Chas. Adam Mogelonsky: Thanks. Chas Scarantino: Of course.