Running a hotel business is not an easy feat. As a hotelier, you need to take care of your staff, keep your guests satisfied, make sure your property is in top shape, manage your bills, build your online presence, and more. Even with a lot on your plate, you should not also overlook the most important aspect: managing your hotel’s revenue.
That’s where revenue management solutions come into play.
Revenue management is a key element in the hotel industry. It involves using available data and analytics to foresee demand, set the right pricing, and maximize income. The goal is to sell the right room to the right guest, at the right time, for the right price using the right distribution channel.
Revenue Management System (RMS) is a software solution that helps owners carry out key revenue management tasks more effectively and efficiently. The system uses data from your own hotel and the hotel accommodation market to help you make more strategic decisions with regards to your pricing.
If you own a small hotel, you might think that you probably don’t need an RMS, but that’s just the other way around. Here are 5 ways a Revenue Management System can help with your small hotel.
1. Revenue Management System helps you save time
Time is a crucial intangible resource and not all businesses have enough of it. As a hotel owner, you may need to juggle different responsibilities: you may need to be a marketing manager, receptionist, sales manager, and accounting manager all at once. Plus, you’ll need to compare your competitor’s prices to stay on top of the game.
Getting an RMS is like buying a huge chunk of time for revenue management tasks so you can focus on the rest.
When you automate the revenue management process with software, you dramatically reduce the manual labor involved in keeping up with the spreadsheets. It collects ever-changing data from multiple sources and stores them in one place. Tracking data from the market allows the RMS to recognize the current and future demand which can help you maximize your hotel revenue.
2. The software is a great investment for hotels with a limited budget
A small hotel has a wealth of operational costs including housekeeping, maintenance, salaries, and occasional minor renovation. While putting money on some new technology seems like an unwise decision, it’s actually a good investment.
In contrast to common impressions, you don’t necessarily need to invest in a revenue manager when you get an RMS. In the past, the technology was complicated, thus requiring a professional to navigate. This is no longer the case in today’s RMSs, especially for smaller hotels that have less complex pricing. You only need fewer features that are easy to run, which means lower costs.
3. It helps you manage your multiple distribution channels
Being present in multiple channels gives your hotel a better advantage. However, manually managing the prices on multiple distribution channels, including your own direct booking platform, takes forever.
A revenue management system helps you with this in two ways. Firstly, it can be integrated with your Property Management System (PMS) or Channel Manager (CM), making it easier to distribute prices across multiple channels in a single click. Secondly, the way your prices are connected is through established derivation.
4. RMS provides accurate calculations to optimize your prices
Manually collecting, evaluating, and calculating data using spreadsheets isn’t just a tedious, time-consuming process—it’s also susceptible to mistakes and missed opportunities. Not to mention, revenue management requires more research and understanding of complex definitions, calculations, and KPIs.
This is where RMS makes a big difference. The system has a series of specialized algorithms and calculations to automatically assess hotel performance and market demand. They’ll take all your data and perform complex calculations for you, giving you more opportunities for focusing on the bigger picture. RMS also comes with user-friendly dashboards.
5. The RMS gives you the details you need to grow your revenue
With so much on your plate, you’re likely to have no time to regularly check the competitors’ data and research on local events and booking trends. You’re likely to miss valuable information that can help grow your revenue and increase the value of your hotel. Either you fail to increase prices when needed or you set higher and unattractive rates for the future which can cause you to lose competitive advantage.
A revenue management system has four fundamental functions: rate recommendations, tracking and collecting competitor data, key performance data, and revenue estimation — all of which are necessary for putting you ahead of the curve.
Author Bio: Carmina Natividad is a passionate travel blogger who dreams of managing her very own hotel. This free-spirited damsel loves to share her insights about travel, lifestyle, personal finance, and business. To know more about hotels and hotel management, you may visit Rate Wise.