A hotel revenue management system is a tool that is designed to help hotels manage various revenue tasks which includes data management, pricing inventory, and reporting. It either uses the rule-based pricing algorithm or analytics-based pricing algorithm which makes use of the internal and the external data to recommend or upgrade pricing and impose restrictions. In simple words, a hotel revenue management system provides data-backed suggestions that help the hoteliers sell the right room, to the right customers at the right price which overall helps in increasing the occupancy and profitability of their hotel.
Benefits of a revenue management system
A revenue management system can prove to be quite effective for hoteliers when it comes to strategizing about the pricing of their rooms. This is because a revenue management system gathers data about the competitors as well as shows the pricing techniques one can apply to increase efficiency and revenue. Some benefits of a hotel revenue management system are:
- Complex calculations can be done quickly and accurately: A revenue management system is a quick software that uses its advanced algorithms to analyze data points and market trends based on real-time data. This allows complex calculations to be done in no time.
- Make informed pricing decisions: Without a revenue management system, an individual will rely on just their gut feeling to accustom the pricing decisions. However, revenue management systems ease the process for you. They ensure consistent revenue streams through optimal pricing.
- Maximize revenue: You should price your room in a manner that contributes to your overall revenue. Therefore, your fortune partly relies on how well do you price your rooms. With a good setup revenue management system you will be able to optimize your room rates through automation and preset rules for ultimate revenue growth.
- Competitive insights: A revenue management system provides insights into your competitive set to guide any changes you may need to make at your property. Therefore, it simplifies the process for a hotel manager of gathering the data about pricing and gathering the information on its competitors.
- Works like a revenue manager: If you have not employed a revenue manager, you can sit back and relax with the help of a revenue management system. A revenue management system can be a lifesaver when it comes to smaller and independent properties without a revenue manager. Most of the revenue management systems present the data in a simple, straightforward manner so that anyone on your team who is responsible for pricing the hotel rooms can do so easily and effectively.
- Improve the guest experience: Travelers want a fair price for their room type and value hotels that are strategic about their pricing. In addition, by streamlining revenue management activities, your team will have more time to determine how to increase revenue through ancillary services and value-added upsells.
- Automate operations: A business can face labor shortages at all times therefore revenue management is one area of operations that you can automate with the help of a revenue management system to reduce the workload on your team.
Key features to look for in any revenue management system software
Various software revenue management systems exist today, and your choice of software depends on your property’s size, requirements, and budget. Here are a few key features that one should look for when researching software revenue management systems.
- Automated rules and alerts: To minimize the time spent in the system, look for a revenue management system that is able to support preset rules and alerts, which will reduce your liability to check your data and update rates manually. Specific rules and alerts can include:
- Comp set-based alerts: Get alerted anytime there is an important shift in pricing (i.e., be alerted every time your comp set pricing goes up by 10%)
- Occupancy-based alerts: Get alerted when it’s time to update your rates based on your occupancy (i.e., increase your rates when your occupancy rises).
- Restriction-based rules: Add restrictions that stop you from receiving new reservations
- Rate comparison functionality: When it comes to the modern world, people nowadays are accustomed to trusting the best. They research different websites to compare the prices of different hotels. You should pay attention to whether the software revenue management system you are installing has a rate comparison functionality that allows you to view your rates across your booking engine, and competitors.
- Forecasting and pricing recommendations: Based on different factors such as market trends, demand, past data analysis, and competitor pricing — your revenue management system should be able to predict and provide pricing recommendations to make sure you always offer the right price at the right time. You should be able to assign the level of control that your revenue management system can exert in making pricing decisions by setting rules where your price is automatically updated in certain instances, whereas in others, it must have your permission.
- Comprehensive dashboard with key reports and insights: Data is of no use if it cannot be analyzed and interpreted for decision-making. A revenue management system should provide key reports that offer an easily digestible snapshot of performance with the option to dig deeper into the data.
- 24/7 support: When it comes to a hotel business the room rates are the lifeblood of the business and its number one revenue driver. Therefore, if you have any problem with your revenue management system then you must need a partner that is available to assist you at all times. Thus, you should look for a 24/7 support system installed in your software.
To conclude, hotel revenue management systems allow you to efficiently and effectively manage your organization’s revenue, to maximize the occupancy and profitability of the business. It has several benefits such as complex calculations that can be done quickly and accurately, improve the guest experience, automate operations, provide competitive insights, make informed decisions, maximize revenue and profitability, etc. You just need to look for some key features when it comes to installing a software revenue management system, such as Forecasting and pricing recommendations, 24/7 support, Automated rules and alerts, etc. Therefore, if you want to take a step towards easy revenue management you should install a revenue management system for your business right away.