Avoid wasting time on outdated information and minimize the risk of leaving money on the table by using a Revenue Management System (RMS)8 mins read
Collecting and evaluating data, taking pricing and distribution decisions and finally updating rates in the system are time-consuming, day-to-day tasks for revenue managers. Luckily, there’s one simple tool that can handle these monotonous chores and free up more time for strategic planning and other important things revenue managers would rather do.
Unfortunately, the current practice of compiling endless Excel sheets and combing through them to identify market trends and make pricing decisions is both inefficient and ineffective. By the time conclusions are drawn, chances to generate revenue could be lost.
5 ways an RMS makes life easier for revenue managers
While markets are constantly changing, rates need to be checked and updated, reports must be prepared and so on and so forth.
Let’s look at why a Revenue Management System can be considered a revenue manager’s best friend.
Step No1: Qualified Rate Recommendations
RMSs use sophisticated algorithms to create the best rate recommendation for every market situation. The system takes composite information into consideration, by retrieving competitor data from the OTAs, search patterns and trends, to see how demand is evolving in your market. This information, together with your property’s historical performance data, is used to create a pricing recommendation which is perfectly in line with your surroundings and your revenue goals.
An RMS lets you do all this with the click of a button, faster than any human ever could. That means you can get the most relevant rate suggestions every time you hit ‘refresh’ and then proceed to update your prices accordingly. Many of today’s modern systems can also be set to refresh automatically several times a day and send you notifications with new pricing suggestions. That way you can take advantage of changes in demand and adapt accordingly.
Many of today’s modern systems can also be set to refresh automatically several times a day and send you notifications with new pricing suggestions. That way you can take advantage of changes in demand and adapt accordingly.
Step No2: Real-Τime Pricing
Real-time pricing is the most recent innovation in revenue management technology, which takes qualified rate recommendations to the next level. Instead of waiting for revenue managers to review and approve rate changes (a procedure that sometimes can take quite a while), advanced RMSs offer automated price updates.
When there is an instant huge increase in demand, for example after the announcement of a big event, booking searches on that specific date hit the roof. Having access to real-time pricing in this scenario will ensure that your rooms instantly, in seconds, increase in price and you don’t risk selling out your rooms too cheap.
Step No3: In-Depth Competitor Information and Market Insights
Although receiving optimized rate suggestions at the click of a button is great, as a revenue manager, you still need to know what is going on in your market, in order to refine your strategy or correct course, if necessary. An RMS can help you with that since it shows when competitors alter their rates, up- or downwards.
Another benefit is not having to stress about event announcements anymore. As soon as a new fair, concert or another event near your is published online, the RMS will instantly pick up on it and enable you to capitalize on the demand it generates.
By keeping an eye on the changes your RMS suggests, you can learn how demand shifts throughout the day, week, month or season – a valuable insight when you are working on your strategy.
Step No4: Clear KPI Reporting
Keeping an eye on your KPIs is the key to knowing how your property is performing. In order to always have the latest figures on hand and check how you’re doing compared to last year, month or week, an RMS tracks metrics like ADR, RevPAR, etc. and presents them on a clear and easy-to-read dashboard.
Now, instead of collecting this data from your Property Management System and manually creating a report, which will be quickly outdated, you can let the system pull the data for you and always know if you are on track with your goals or you need some strategy adjustments.
Step No5: Revenue Forecasting and Estimation
What makes modern RMS so amazing is that thanks to advanced AI technology, they undertake a lot of the guesswork out of many areas of revenue management, not just pricing. On top of suggesting optimized rates, an RMS also creates accurate forecasts for your hotel and can update them whenever the market changes.
Today’s top RMSs even give you the chance to run various scenarios to see how different price changes can impact your hotel’s revenue and bottom line, assisting you to make decisions on which tactics to implement. Sure, you can do all this by hand, but the RMS is much faster and due to AI and machine learning, it creates much more accurate estimates than even the most experienced revenue manager.
Optimized rate recommendations, deep market insights and solid reporting are just a few of the many benefits a modern RMS brings. By taking advantage of them, you don’t just set yourself up for improved results, you also save vast amounts of precious time you can spend on training your team, keeping your best practices up to date and focusing on important strategic aspects of your work.
If you are ready to boost your profits and bring revenue management at your hotel, a cutting-edge RMS is the way to go!