In 2019 only 7% of hotels used revenue management software (RMS). That’s an excellent opportunity to have a significant edge over your competition.
While your competition spends time adjusting availability and pricing manually, day by day, room by room, you can save that time and invest it in bettering the actual client experience.
The amount of RMS solutions is growing and their popularity is increasing. That’s why in this post you will find 8 main features of an automated revenue management system.
So, after reading this post you will know exactly what to look for in an automated RMS.
Sell the right room to the right guest at the right time and the right price: what is revenue management?
Revenue management has been here for a while and is not that new in the hotel industry. Yet, it seems that we hoteliers have started to discover its benefits quite recently.
Especially smaller hotels notice that it’s becoming crucial in their strategy for maximizing profits.
What’s more on the market appeared tools like Pricepoint or RoomPrice Genie, which are affordable for independent properties.
Revenue management consists of satisfying the needs of the highest possible number of customers while searching for the highest cost-effectiveness for the business.
To be more specific it’s the elaboration of previsions with the end goal to offer the right product to the right customer at the right moment.
Origins of revenue management go back to the 80s in the USA with the liberation of one of the most dynamic industries: airlines.
Revenue management in hotels doesn’t serve only for the optimization in the seasons of high demand.
The right system, well established, should help stimulate the demand in low seasons too, avoiding cannibalizing rates and entering in the war price with competition.
You see, this is why revenue management is relevant in times of crisis, like the one caused by Covid-19, too.
Learning and understanding the basics of revenue management is essential for building the price strategy and maximizing profits from each of the rooms in your hotel.
What is an automated revenue management system?
In short, this is the software that helps hoteliers do the revenue management tasks more effectively and efficiently. It analyzes hotel and local market data, booking trends 24/7/365, and comes up with the most optimized price for the rooms.
But, should you trust automation to optimize prices for you, especially in the difficult to predict market situation?
While Pricepoint’s clients value the automation and the benefits it brings, they can still control it and can react, without the need to spend the whole day in front of the computer.
Why does every hotel need an automated RMS?
Fortunately, revenue management is not reserved only for big hotel chains with huge budgets. As I’ve mentioned before, on the market there are tools compatible with smaller or independent hotels and travel accommodations.
Easier to use, giving lots of independence, where the owner or manager can use it without tech overwhelm. Hotels with smaller properties can especially enjoy using an automated RMS because it will help them maximize profits per room.
Plus it will give you an advantage over your competitors who don’t use it or are doing revenue management with complicated Excel sheets and incomplete data.
No more guessing or feeling like it’s a waste of time.
Here are the benefits of using automated RMS:
- It helps you maximize profits from each room
- It eliminates the guessing or feeling like it’s a waste of time
- It works around the clock
- It calculates and suggests the most optimal rates in real-time, so you don’t have to.
- It has a low cost compared to the results you get (in the case of Pricepoint, our clients got 20x bigger results than the cost of the monthly license)
- It saves you time which you would need to put into deciding for pricing by yourself (not to mention all the calculations!)
- You stay ahead of your competition, becoming a price leader. Because it’s not about following what others do.
- You can make better decisions for your hotel, based on data. Like finally finding the right time to get these room renovations, as an example.
8 features to look for in an automated revenue management system
Sure, finding the right tool sometimes feels like a quest to find Nemo. So many fish in the sea (often very similar to each other), so how do you know which one to choose?
Listen, below you will find features the automated RMS should include. The rest is for you to decide and try it out (for free) to see how it works.
So, here are a few features you should check:
- It integrates with your property management system, booking engine, and channel manager
- It lets you optimize prices for each channel. Meaning you’re able to create different price strategies for each of the OTAs and your direct channel
- You can manually optimize prices or run your revenue management strategy on autopilot.
- It monitors your competition, tracks trends, and gives your reporting in real-time. Some RMS, like Pricepoint, offer rate shoppers (a tool that scans your competition rates).
Pricepoint’s analysis relies on how we can position your property optimally for the current demand and supply and not a specific competitor. In other words, it does not price match or follow other properties as this is an inferior method.
You see, there are many reasons for that.
One, nowadays you cannot say who will be listed as your “competitor” on Booking.com. It may be a hotel, Airbnb, or a B&B.
Two, following the competitors, means that we assume that they know what the pricing should be and what the demand is.
That’s why rate shopping is the supporting element that serves as a health check but does not drive Pricepoint’s price recommendations
5. Data visualization
An automated revenue management system should collect data and create easy-to-read reports, charts, and graphs.
After all not every hotelier is a data specialist (tho after time in this business might become one).
6. It sends updates and alerts so you always stay in control
7. It forecasts and estimates profits- that way you can see how well your hotel is performing and if your revenue management strategy brings the results
8. The mobile version is available so you can control it anytime anywhere
This feature is especially comfortable for independent hoteliers, who don’t have a dedicated revenue manager.
In this blog post, you could read what are the benefits of an automated RMS and what features you should be looking into to find the solution for your hotel.
While your competition spends time adjusting availability and pricing manually, day by day, room by room, you can save that time (and stop guessing) with RMS and invest it in refining the actual client experience.
If you’re ready to eliminate guessing from your pricing strategy and maximize your hotel profits, try Pricepoint for free.
Written by Ewa Gabara, Marketing Coordinator