We know that technology has taken over the world gradually, and the hospitality industry is not left behind in it.
Over the years, we have seen the impact of various technologies in hotels; however, there’s one tech that hasn’t been talked about much so far – hotel revenue management system (RMS).
In this blog, I’ll give you various reasons to invest in a hotel revenue management software and challenges it can help you overcome.
Table of Content
What is a Revenue Management System?
As a hotelier, you might be aware that revenue management is an integral part of hotel operations. However, with time, this task has become complex due to numerous OTAs and the rising competition.
This is where the hotel revenue management software comes into picture. It’s an automated system that can forecast, update, and enhance your overall revenue, by considering various aspects.
This kind of software is a MUST for every hotel.
Challenges That RMS Can Solve
Handling revenue in business is certainly easier said than done. It comes with its own set of hurdles that can be solved using hotel revenue management software. Here are some of them.
1. Challenge: Data Collection and Storage.
You might have heard that, ‘Data is the new oil’.
Having a huge amount of data that could benefit you in the long run is definitely an intangible asset. As for the hotels, they need to maintain yearly sales reports for demand forecasting and revenue projection.
Collecting and storing such data is prone to discrepancies. Even if a single report is misplaced, it can create a blunder.
Solution: Get a cloud-based RMS with unlimited storage
Hotel revenue management software are cloud-based solutions that provide unlimited storage capacity along with data security to prevent any sort of leaks.
With the unlimited space, saving data becomes easy without worrying about its size. Moreover, cloud-based storage is safe as the data is encrypted, which makes it inaccessible to cybercriminals.
2. Challenge: Managing Multiple Platforms
It’s no secret that every hotel in some way or another is dependent on online platforms for bookings. These platforms include OTAs, hotel websites, and meta search engines.
However, most of the hoteliers struggle with managing rates, inventory, and offers on these platforms. Apart from these, maintaining rate parity is another hectic task.
Moreover, juggling between different dashboards is another challenge.
Solution: Invest in RMS that supports easy integration
Well, using a revenue management system in hotels is the perfect solution to this problem. RMS these days can be easily integrated with various channel managers.
Thus by using a hotel revenue management software, you can manage inventory as well as rates across all the online booking platforms.
3. Challenge: Annual Tariff Forecasts
Demand forecasting is crucial for hotels to make informed decisions.
However, it isn’t that easy. Hotels need to deal with piles of data and a lot of analysis. One slight error and it can cause a significant difference in forecasted figures. Doing this manually requires the use of formulas and a lot of calculations.
Moreover, a slight error in calculations can cause a tremendous difference in forecasted figures.
Solution: Opt for AI and ML powered RMS
Hotel revenue management software helps you with running forecasts by using a set of rules which can be changed with time.
It’s kind of an algorithm which can be programmed while you deploy RMS at your property. Two kind of rules are used to achieve forecasts:
- Static rule
- Dynamic rule
While the former one is fixed, the latter one can be changed depending upon the location of the hotel, property size, and other criteria.
Since most of the RMS are powered by Artificial Intelligence (AI) and Machine Learning (ML), there are less chances of having an error.
4. Challenge: Market Analysis
Another major problem for many hoteliers is that a part of their time is consumed in market analysis (compset, market share, and ongoing offers across various online booking channels).
Solution: Go for a data-driven RMS
RMS is capable of conducting market analysis by leveraging data. Once you update your compset, booking channels, and hotel’s location, the system would automatically generate timely reports as per the defined algorithm.
Moreover, it’ll give you insights on your competitors and property’s performance across all the OTAs. And by using it, you can plan other strategies to improve your hotel’s performance on the online booking platforms.
5. Challenge: Monitoring and Updating Revenue Daily
‘Daily sales recapitulation’ is one of the important reports in every hotel. It highlights hotels’ daily performances in the form of ADR (Average Daily Rate), RevPAR (Revenue Per Available Room), and ARR (Average Room Rate).
These figures are further used to update tariffs on a daily basis. Doing this manually requires dedicated timing. Moreover, if it’s a large property, this becomes way more difficult.
Solution: Bring RMS into picture for 24*7 monitoring
At this point, RMS comes to your rescue with its unique feature to monitor your hotel’s revenue 24*7.
Due to automation, it updates intelligent pricing on channel manager accordingly. Since you’ve already configured the details, you just need to sit back and relax.
6. Challenge: Managing Time and Money
Now that you are well versed with the benefits of the revenue management system and the problems it can solve, you might be wondering that this automation can cost a fortune.
But no, it’s exactly the opposite. Initially, when RMS was launched, it was specifically used by luxury properties having a plethora of services such as spa, gift shops, and multi-speciality restaurants.
For budget hotels, investing in this kind of automation seemed like a futile step due to less inventory, low guest count, and seasonal operations.
Solution: Get a customised RMS for your hotel
With time, things have changed. Hotel revenue management software these days are entirely customisable and tailored as per your requirements.
Moreover, with an easy to use dashboard, it requires a couple of training sessions for the RMS providers to make hoteliers thorough with the working process.
After the setup is done, the hotel managers/owners just need to check the rates and inventory once or twice a day. This can help them in saving both time as well as money.
Conclusion
Revenue management is an important and critical task in hotel operations. Hoteliers either do it on their own or hire revenue management experts for the same.
As the hotel revenue management software hit the market, this task became easier and required minimum human intervention. It’s vital for luxurious as well as budget properties to have RMS installed for better revenue management.
In this blog, I have listed various importance of the hotel revenue management system that are solutions to problems hoteliers face. If you are facing any of them, then don’t wait. Rush now and invest in RMS today.
