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By William May
Published: 06/03/20 Topics: Software, Sunspots Vacation Rentals, Vacation Rentals, Vortex Managers Comments: 0
Although the Vortex Organization first inserted yield management tools into their HelpBookMe lodging management system years ago, today they announced release of version 3.0 of tools referred to as S2D2 for "Seasonal, Strategic, Dynamic and Distributed".
Salman Arshad, chief engineer notes, "Artificial Intelligence pricing is based on the simple idea of Supply and Demand. But predicting supply and demand is a complicated undertaking because variables change frequently and quickly."
Yield Management, sometimes called "Dynamic Rates", increase or decrease based on the general economy, local and regional economic factors, the features and amenities of each property, local events and circumstances, prior day, week, month and quarter pricing, competitor rates and, even, the weather.
S2D2 rates are based on artificial intelligence that queries over 8 billion dollar points every evening, chooses the factors affecting every individual property, and then applies them to our geographic markets right down to the individual vacation rental home or lodging unit.
"Of course our pricing is based on sophisticated and ever changing algorithms, but we still apply manual review, oversight and, sometimes, intervention," said Kate Quinn, account manager at Vortex. "That is why our product name acknowledges all of those important factors."
"Studied" means constant inspection of what competitors are charging for similar and dis-similar properties. "Strategic" rates are set differently depending on time of the year, the season, and in accordance with local events.
"Dynamic" means that rates are adjusted regularly based on occupancy, advance notice and other factors. "Distributed" requires properties be widely advertised on every productive website and through conventional media to ensure that those who might demand the property know it exists.
You cannot have one of those elements without the others, otherwise the science of yield management would be incomplete. After extensive testing, results show that S2D2 version 3.0 can increase both occupancy and rates, resulting in more profit for property owners.
"It is counter-intuitive to recognize that S2D2 does not care what the day of the week is, what the season is or even if there are holidays." explained Arshad. "Instead, with constant calculation, the software foresees trends and adjusts rates to be at the sweet spot that fosters both occupancy and optimal rate."
Another reason yield management works so well is that, surprisingly, travelers have become accustomed to it and, in fact, learn to use variable rates to change their behavior. In other words, demand for lodging ebbs and flows based on rates.
The HelpBookMe technology and especially version 3.0 help charge the highest possible rate on the most popular dates. Modest rates are charged during shoulder seasons. And low rates are set for slow seasons to attract guests who would not otherwise consider booking.
Yield management shines during good economies, but quickly recognizes and reacts to negative events such as economic downturns, regional weather, and any happenings beyond anyone's control.
William May, a Vortex leader admits, ""Every owner loves the idea of high rates, but pride of ownership can be wounded when they look at lower seasonal rates. But once they see the growth in annual income, owners become quick converts to our S2D2 dynamic rates."
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Vortex Managers is a network of trained vacation rental management companies and provides its clients with the resources of giant lodging corporations without the cost or delay. HelpBookMe is a proprietary lodging management software system perfected with thousands of hours by expert engineers. For more information on Vortex, call or Email: Info@VortexManagers.com, or Website: www.VortexManagers.com
Author: William May – Manager, Vortex Managers
Blog #: 0746 – 06/03/20
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