Outsource Revenue Management, Buy Software, or Do It Yourself — What Does It Depend On?
The decision comes down to four factors: room count, internal capacity, strategic complexity, and budget. As a rule of thumb: below 20 rooms, a simple pricing tool is usually enough. Between 20 and 120 rooms without a dedicated revenue manager, outsourcing or a hybrid model is typically the most economical choice. Above 120 rooms, an in-house full-time position increasingly pays off — combined with a capable RMS.
The question we hear most often: we have no revenue manager, 20–120 rooms — should we outsource or buy software? A one-size-fits-all answer would be dishonest. What it takes is a framework: four options assessed honestly, plus a decision matrix, a self-test, and a cost comparison.
What Are the Four Options for Hotels Without a Revenue Manager?
Option 1: Doing It Yourself Without a System
The owner or general manager sets rates personally — usually once per season, with sporadic adjustments. Strengths: no additional costs, full control, nobody knows the property better. Limits: pricing becomes a side task squeezed between rosters and guest care. Pick-up data goes unanalyzed, events are missed, and rates sit below market level in high-demand periods. For properties under roughly 15 rooms with loyal repeat clientele, this can be enough — for everyone else, it is often the most expensive option, because the opportunity costs remain invisible.
Option 2: Buying RMS Software
A Revenue Management System (RMS) such as RoomPriceGenie, Atomize, Duetto, or IDeaS automates rate adjustments based on demand, pick-up, and competitive data. Strengths: prices move daily instead of seasonally, the time investment drops significantly, and entry-level solutions start at a few hundred euros per month. Limits: an RMS does not tell you which segments to develop, how to evaluate group requests, or when restrictions make sense. It optimizes within a strategy that someone has to define — and that someone is exactly who is missing in most hotels with 20–120 rooms.
Option 3: An Outsourced Revenue Manager
An external revenue manager takes over daily rate management, forecasting, channel strategy, and reporting — as a service for a fixed monthly retainer (this is how our Outsourced Revenue Management works). Strengths: senior expertise without the fixed costs of a hire, immediately operational, benchmarks from many comparable properties. Limits: this person does not sit at your front desk — without a clean flow of information on events, renovations, and group requests, even the best external partner works with gaps. And quality varies widely in this market: references and reporting transparency are decisive.
Option 4: An In-House Full-Time Position
An employed revenue manager is on-site every day. Strengths: maximum closeness to operations, short lines to front office and sales, full capacity dedicated to a single property. Limits: full costs of EUR / CHF 90,000–130,000 per year and difficult recruiting — experienced revenue managers are scarce and benchmark their salaries against chain hotels. Below roughly 120 rooms, a full-time position is rarely justifiable economically.
Decision Matrix: Which Option Fits Which Hotel?
The matrix maps the four options along the four most important axes — no substitute for a case-by-case review, but a reliable first orientation.
| Axis | Your Situation | Most Plausible Option |
|---|---|---|
| Room count | Under 20 rooms | Do it yourself or a simple RMS (e.g. RoomPriceGenie) |
| Room count | 20–120 rooms | Outsourced revenue manager or hybrid model |
| Room count | Over 120 rooms | In-house position plus RMS (e.g. Duetto, IDeaS) |
| ADR level | Below EUR / CHF 120 | Automation first — limited leverage per room |
| ADR level | Above EUR / CHF 120 | Active management — high rates respond strongly to good pricing |
| Internal capacity | Management handles pricing on the side | Outsourcing — the side task becomes a professional's main job |
| Internal capacity | Staff member with time and an affinity for numbers | RMS plus training, external advice as needed |
| Internal capacity | Established revenue team | Capable RMS — no external management needed |
| Strategic complexity | 1–2 segments, hardly any groups or events | An RMS is often enough |
| Strategic complexity | Multiple segments, groups, MICE, events | Outsourced revenue manager or in-house position |
The axes interact: a 30-room property with an ADR of EUR / CHF 250, group business, and an event-driven location needs more active management than a 100-room hotel with a single segment and stable demand.
Self-Test: Should You Outsource Revenue Management?
Five questions, yes or no:
- Are your room rates actively adjusted less than once a week?
- Is there nobody in your hotel whose main job is pricing — just management or reception on the side?
- Do you have 20–120 rooms and more than two relevant guest segments (leisure, business, groups, events)?
- Are you unable to say offhand how your pick-up for the next 90 days compares to last year?
- Is your OTA share above 40% — or do you not know it precisely?
Scoring: Three or more yes answers: seriously consider outsourcing — the untapped potential usually exceeds the retainer. Two yes answers: a hybrid approach or an RMS with accompanying advice. Zero to one: you are already on solid ground — a tool for efficiency is probably all you need.
What Do the Four Options Cost in Comparison?
| Option | Costs (Guideline) | What You Get | What Is Missing |
|---|---|---|---|
| In-house full-time position | EUR / CHF 90,000–130,000 per year (full costs incl. payroll) | Full capacity on-site, daily presence | Rarely pays off under ~120 rooms; absence and turnover risk |
| RMS tool | approx. EUR / CHF 200–600 per month depending on size | Automated rate adjustments, forecasts | Strategy, segmentation, group and channel management |
| Outsourced revenue manager | Fixed monthly retainer (see pricing) | Strategy and daily management by senior expertise | Physical presence on-site |
| Hybrid (RMS + external management) | Tool costs plus retainer | Automation and strategic control combined | Highest running costs short of a hire |
For perspective: even the combination of an RMS and external management typically comes in well below a third of the full costs of an in-house position.
What Does an RMS Really Deliver — and What Not?
A modern RMS reliably does three things: it adjusts rates automatically to demand, builds forecasts from historical and current booking data, and saves hours of manual work every day.
What it does not do: it develops no segmentation strategy, does not weigh a group request against expected transient business, negotiates no corporate rates, does not decide on restrictions such as minimum length of stay, and never questions its own recommendations — for instance when a local event is missing from the algorithm. An RMS optimizes within guardrails a human has to set. Which system suits which hotel type is covered in our neutral revenue management software comparison.
When You Do Not Need RevenueRise
RevenueRise is the outsourced revenue management specialist for independent and boutique hotels in the DACH region. That is precisely why honest advice includes stating clearly when our model is not the right fit:
- Under roughly 15 rooms: the achievable additional revenue rarely carries a monthly retainer. A simple RMS such as RoomPriceGenie plus well-maintained seasonal rates is the more sensible investment.
- A working in-house revenue team: if someone already analyzes pick-up daily, manages rates, and maintains forecasts, you do not need external management — at most a second opinion or an audit.
- A pure automation need: if all you want is rates that adjust automatically to demand, a tool like RoomPriceGenie serves you faster and cheaper. External management only pays off once strategy, segments, and channels need steering too.
- A budget below setup plus retainer: if the monthly retainer exceeds your budget, we do not recommend a contract — we recommend starting with a tool and talking again once the property has grown.
The Hybrid Model: What Does an RMS Plus External Management Deliver?
For many hotels between 20 and 120 rooms, the best answer is the combination: the RMS automates daily rate adjustments while the external revenue manager sets the strategy, monitors the system's recommendations, and manages restrictions, segments, and channels. We work system-agnostically — in your systems, with your PMS, your channel manager, and the RMS of your choice. Switching systems is not a prerequisite.
Realistically, we calculate with 3–10% more RevPAR in the first year for professionally managed properties. In the best case, it moves considerably faster: at the Romantik Hotel Sternen in Kriegstetten, RevPAR was up 23% and occupancy up 10% after four months — our documented best case, not the standard promise.
Which of the four options is right for your property is exactly what our Potential Analysis answers based on your numbers — or you can settle it directly in a free initial consultation.
Frequently Asked Questions
From How Many Rooms Does an Outsourced Revenue Manager Pay Off?
As a guideline: from around 20 rooms. Below that, the monthly retainer rarely stands in a healthy relation to the achievable additional revenue — an automated pricing tool is usually the better choice. Between 20 and 120 rooms, outsourcing is generally the most economical form of professional rate management, because an in-house full-time position hardly pays off in this size class. Beyond room count, complexity matters: hotels managing multiple segments, groups, and events benefit earlier.
Can I Combine an RMS with an Outsourced Revenue Manager?
Yes — this hybrid model is often the strongest setup in practice. The RMS handles daily rate automation; the external revenue manager sets the strategy, monitors the system's recommendations, manages restrictions and channels, and intervenes when the algorithm misjudges special situations such as local events. We work system-agnostically in your existing systems — from the PMS and channel manager to the RMS of your choice.
What Does Outsourcing Cost Compared to an In-House Position?
An in-house full-time position realistically costs EUR / CHF 90,000–130,000 per year including payroll costs, tools, and training. Outsourcing runs on a fixed monthly retainer that sits well below that and scales with the scope of services. An RMS tool costs roughly EUR / CHF 200–600 per month depending on hotel size, but does not replace strategic management. You will find our current terms transparently on our pricing page.
Does an RMS Like RoomPriceGenie Replace a Revenue Manager?
No — it replaces part of the work. An RMS automates rate adjustments reliably and is often entirely sufficient for smaller properties without a complex segment structure. What it does not deliver: segmentation strategy, group and event evaluation, channel and restriction management, and a critical review of its own recommendations. Hotels with 20–120 rooms and multiple segments need both: automation and someone to steer it.
How Quickly Does Outsourced Revenue Management Show Results?
The first effects — a cleaner rate structure, active pick-up management — usually appear within the first weeks. Realistic expectations are 3–10% more RevPAR in the first year, depending on your starting point and market environment. In the best case, it moves faster: +23% RevPAR and +10% occupancy in four months at the Romantik Hotel Sternen in Kriegstetten — the exception, not the promise.
