Revenue Management Systems are nothing new – they’ve been around for decades. But it’s only in the last few years, with the introduction of smart tech and big data, that they’ve become truly excellent, even indispensable.
It’s possible for a hotel to get by without a Revenue Management System – or Revenue Management Software, or even a Revenue Management Solution, depending on your preference (you can just call it RMS) – but there’s no way you’ll be able to maximize your RevPAR without putting in hours of manual work. Franky, who has the time?
So let’s explore what makes the best Revenue Management System and look at some of the leading solutions on the market.
What is a Revenue Management System?
Let’s start with the basics. The idea originated in the airline industry, and long story short, Marriott eventually adopted yield management in the late 1980s. They immediately saw good ROI, which encouraged others in hospitality to follow suit. History lesson over.
Modern Revenue Management Systems use clever algorithms to power calculations that optimize your hotel revenue strategies. As well as examining property data, they analyze market supply, customer demand, and competitor information in order to calculate the optimal price at which you should sell your rooms.
The benefits of using a Revenue Management System
The overarching benefit is pretty obvious: you can make more money. Results vary depending on property type, which system you pick and what pricing processes you already have in place, but you can expect to see anywhere between a 5-20% increase in RevPAR.
But let’s get into specifics.
1. Better time management and efficiency
The thing you'll notice most once you’ve switched on your hotel Revenue Management Software is the time savings it’ll give you. Simply put, it removes the need for any manual pricing work, which typically means many hours saved every week.
The best Revenue Management Systems are all cloud based, allowing multiple users to log in from anywhere and check data from a centralized dashboard. With a good RMS, you’ll be able to easily see all your pricing data – as well as industry and competitor data – in one place, meaning no more spreadsheets or manual research.
2. It’s more efficient, with fewer mistakes
Even the world’s greatest Revenue Manager is only human. If pricing is done manually, there’s bound to be the occasional mistake or missed opportunity. Sophisticated algorithms don’t get tired or need to take a break – they’re always forecasting in real time based on supply, demand and occupancy.
3. Being proactive
Additional revenue opportunities are often missed if you or your revenue team are reacting rather than predicting. A Revenue Management System can factor in changing seasonal or specific demands, such as if there’s an event in your area, ensuring you stay ahead of the curve.
Machine learning tools can process huge amounts of historical data and accurately predict future trends, meaning there’s no last-minute panicking to adapt your prices because of an event you didn’t know about or a drop in competitor pricing.
4. Attract the right guests to unlock further revenue
Setting the right price means attracting the right kind of guest – one who’s going to bring in more revenue by maximizing ancillary sales. Create strategies based on guest profiles and you’ll be able to upsell more effectively with specialized, targeted packages and offers.
5. More flexibility
As most Revenue Management Systems are cloud-based, it’s much easier for you and your team to collaborate and work with agility. If you need to pull reports or want to check pricing data, you should be able to do it from your phone, wherever you are.
Moreover, because an RMS is transparent with its data sets and pricing decisions, it’s easy for other departments and team members to gain a quick understanding of the pricing logic and revenue strategies you’re pursuing.
6. Better reporting
If you’re still doing things manually, you’ll know how time consuming it can be to compile and present weekly or monthly data into an easily digestible format. More than ever, hotels are relying on smart analytics across multiple departments, and revenue management should be no different. Use visual dashboards and pull up-to-date reports with a few simple clicks.
What features should you be looking for?
We’ve covered the benefits, but what are the key features that a Revenue Management System offers? Depending on your circumstances, some of these will be higher priority than others, but you should think carefully about all of the below:
Ease of implementationLook for a system that integrates easily with your existing property management system so it takes the stress out of implementation. You don’t want to have to wait around for a new, custom connection to be built – a Revenue Management System that’s already supported will mean a fast, seamless transition, putting very little pressure on your team.
Level of integrationYour RMS isn’t the only tool that keeps your property ticking. There's your PMS, CRM, channel manager, booking engine... all these moving parts work much more effectively when they’re connected. When choosing a Revenue Management System, look for seamless, two-way integrations with these other key solutions, so that data sharing is automatic and seamless, with no extra work required from you.
SupportThis one’s obvious but it’s worth spelling out: make sure that a responsive support team will always be ready to help when you need answers. It builds trust in the solution and rapid responses mean happier staff and mean that any potential revenue loss is minimized.
Pick a solution that has a strong support and feedback function so you can work with it to adapt to your needs – check their reviews on places like Hotel Tech Report or speak to other hoteliers about their experiences.
PricingLook for flexible pricing if you don’t want to get locked into a contract. With new integration options you can try a Revenue Management System before you get tied in, so there’s nothing stopping you from experimenting with two or three to find the solution that works best for you.
Dynamic reportsRegardless of whether you take a hands-off approach and let your RMS do all the work, or if you have a strong input on strategy and decision-making, you’ll need clear, accurate reporting to show you performance. Not only should reports be customizable, they should be easy to export and share with other team members.
Make a list of the information you want, including reservation reports, price analysis, competitor reviews, channel analysis, and market segmentation, and ensure the solution can give you what you need.
The right segmentationConsider the size and profile of your property when choosing your Revenue Management Software. Some solutions are designed for particular property sizes or, while others may be better for hostels as opposed to hotels, for example. Some are tailored to specific geographic regions.
If specific types of bookings are important for you, such as corporate or groups, check what level of segmentation they allow regarding these areas to ensure you’ll be able to maximize revenue.
What hotel Revenue Management Systems are available?
There are more than 25 revenue management integrations available on the Mews Marketplace. Each one has its particular benefits and feature sets so it’s worth exploring them all, but these popular choices are a good place to start.
With specially designed functionality for hotel chains and groups, Atomize Revenue Management System is ideal for tracking revenue KPIs across your portfolio, with real-time optimal pricing and pricing plans for 365 days into the future.
BeOnPrice integrate well with other hospitality solutions you’re using, and have developed their own index that measures overall hotel quality based on competitive position and price elasticity.
Marketed as specialists in revenue strategy, Duetto distill their product into three key areas: pricing, reporting, and group business. It’s a powerful and agile solution.
IDeaS, a SAS® company, are one of the largest players, and they provide revenue performance advisors to guide your business. As well as hotel revenue management, IDeaS software can also handle parking and meeting and events revenue management.
Pace offer a high frequency pricing engine, industry-leading forecasting accuracy, customizable business intelligence, and an intuitive app that gives you full strategic control.
RevControl is specifically built for individual hotels and small hotel chains, offering tools like business analysis, rate shopping, and a rate calendar at a lower price point.
The Room Price Genie solution is designed for small to medium hotels, with an autopilot option that saves countless hours that are particularly valuable for small teams and individuals.
What’s the future of revenue management?
If we peer into our crystal ball, we see a future where Revenue Management Software continues to embrace machine learning and AI, getting smarter and even more personalized. Just as we’re seeing with other industries, hospitality as a whole will continue to move towards more automated, data-led systems that will ultimately give hoteliers more power, more time, and more revenue.
26 November 2020
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