Last updated on : January 28th, 2022 by S Raange
What is a Revenue Management System?
A hotel revenue management system (RMS) is a software solution that helps you to perform important revenue management operations more effectively and efficiently. A revenue management system uses data from your hotel and market and analyses it to help you understand the market supply, customer demand, and competitor information so that you can make better business decisions.
We have picked out seven good reasons why your hotel needs to have a revenue management system:
Traditional revenue managers struggle to update rates manually once a day. But an RMS analyses your hotel’s historical data, current market data, and rates multiple times in a day to provide you with real-time rate optimization.
A hotel revenue management software eliminates the need for any manual pricing work. This typically translates into many hours saved every week.
Cloud-based revenue management systems are the best when it comes to accessing information from a centralized dashboard. You can allow multiple users to log in from anywhere and at any time. The software solution allows you to easily see all the pricing data as well as that of your competitors and the industry in one place. This means no need of maintaining excel sheets or do manual research.
As the name implies, a revenue management system manages revenue and looks at ways to improve it. When you set the right price, you attract the right kind of guests. This helps in bringing more revenue by maximizing ancillary sales. Based on your guest profiles, you can even optimize your revenue-generating strategies to upsell more effectively with specialized, targeted packages and offers. With the help of a revenue management system, you can potentially increase a hotel’s revenue by 2 to 10%.
All hotels – big and small – can maximize their revenue if they can recognize the past, present and future demand in business. This enables them to set the right price for the right customer at the right time through the right distribution channel. With the help of a revenue management system, daily rates can be adjusted for each room every day.
With the help of an RMS, you get a better understanding of your guests’ booking behavior. You get insights into how early they book, what kind of rooms they book, and at what rates. When this information is collected, it can be analyzed to simplify the process of accepting guests under the right conditions over the best dates at the right price.
If data reporting is done manually in your hotel, you’ll know how time-consuming the whole process is. Compiling and presenting weekly or monthly data in an easily digestible manner are time-intensive processes, which can easily be automated with the help of a revenue management system. Moreover, through RMS, you can access visual dashboards and generate reports in real-time in just a few clicks.
The goal of RMS is to help you increase your revenue and not be another expense on your balance sheet. Earlier, RMS systems were only affordable to larger hotels. As the technology evolved, it became affordable and accessible to hotels of any size or rating.
The revenue management system will continue to become smarter as it embraces AI and machine learning. The hotel industry as a whole will move towards more automated, data-led systems that will give hoteliers more time, more power and more revenue.
Karan Iyer is an end-to-end digital marketer and blogger who inherently understands the hotel industry with his hospitality background. Karan knows how to convert the pain points and challenges of the hotel industry into business opportunities, and that's what he writes about for his readers. He also shares industry trends, insights and news to help his readers stay up-to-date.
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