— by RoomPriceGenie
What is a Revenue Management System (RMS)?
A Revenue Management System or RMS is a software solution that helps you conduct revenue management tasks more efficiently and effectively. It takes data from your hotel and the market (specific competitors or at large) to help you make the most informed decisions that will benefit your property.
Ideally, a well-functioning Revenue Management System uses data and various algorithms to conduct real-time analysis of the demand within the market and determines the best rates at which to sell rooms. As a result, important revenue management decisions can all be carried out from one centralized dashboard.
Why is a Revenue Management System (RMS) Important?
Revenue Management Systems act as key functionalities within the hospitality industry, no matter the size of the hotel. It’s due to the system’s ability to conduct complex calculations quickly and offer real-time tracking of the market. This is something that would be impossible to replicate manually.
An RMS adjusts prices across various distribution channels and removes the hustle of having to log into all the accounts separately. As a result, key performance indicators, such as revenue per available room (RevPAR) can be improved, increasing the hotel’s top and bottom lines.
The use of an RMS is vital in smaller hotels because fewer rooms mean more requirements to maximize the revenue of each room. However, it is perhaps even more essential for larger hotels because the overwhelming manual revenue management workload leaves more room for error and poorer decision-making.
HotelMinder, it is about:
- Optimizing occupancy, revenue or ADR
- Upgrading your software stack
- Solving distribution or/and tech issues
- Improving their hotel online presence
HotelMinder, it is about:
- Upgrading your software stack
- Optimizing occupancy, revenue or ADR
- Solving distribution or/and tech issues
- Improving their hotel online presence
What Are the Most Important Functions of a RMS?
Revenue Management Systems are comprehensive software packages with a wide range of features and functions.
1. Rate Decisions/Recommendations
The most crucial feature of a Revenue Management System is its ability to quickly and accurately calculate the ideal room rate using algorithms, while taking into consideration the hotel’s past performance, current market data and trends, as well as other important information. After a system decision is made, room rates can then be easily adjusted. This also changes across all distribution channels once the RMS is updated.
2. Competitor Information
RMS software includes an integrated competitor rates feature, allowing one to easily check room rates for other hotels in the area or other hotels of a similar size. This can also be fully personalized to a hotel's needs. The functionality is crucial in decision-making, as when we have visibility of our competitors’ rates, we can adopt a more strategic approach to our pricing and make sound decisions.
3. Key Performance Data
A Revenue Management System stores and provides key performance data, including occupancy rates, revenue per available room (RevPAR), and average daily rates (ADR). Users can see past performance from last month, as well as last year.
4. Revenue Estimations
Finally, aside from presenting past data and supporting you in making important rate decisions, an RMS will also provide you with forecasted or estimated revenue based on key contributing factors and the current pricing strategy. It will also provide updates if any alterations are made to the strategy.
Ultimately, a revenue management system is designed to help revenue managers with their workflow and automate tasks. Setting and optimizing rates, as well as presenting a large set of complex data and helping with the decision-making process is just what an RMS does. A study has shown that hotels that switched over to an RMS have been able to increase their RevPAR by 5-20%, thanks to all the key functionalities mentioned above.
What are the Essential Features of a Hotel Revenue Management System (RMS)?
So, diving into the technical side of the RMS, we will see what makes the system run smoothly and efficiently, and why you should consider opting for one. All these technological factors have an impact on the efficiency of team members and increase the overall revenue. Moreover, they make a Revenue Management System vital for hotel operations.
1. Integrations
RMS integrates with the PMS, CRS, CRM, and booking engine with a reliable, two-way connection, so that the systems can share the right data. Choose one that offers accurate forecasting, claims to improve revenue, and helps anticipate demand so hoteliers can change the prices accordingly.
2. Flexible Pricing
The RMS that you select must be able to have flexible pricing options. This means it should be able to price by room types and channels independently of each other rather than being fixed.
3. Cloud Technology
A multi-tenant cloud architecture within the RMS should allow the system to have seamless integration and data sharing. It should also allow developers of the system to conduct real-time updates, instead of having to re-install newer models.
4. Intelligent Reporting
RMS can build, export, and share your most important reports. Therefore, you should look for one that is time-efficient and lets you export and share any report with anyone.
5. Data Visualization
A good RMS presents the data in various visuals – such as tables, graphs, and line charts. Different visuals are helpful to different people and every new view allows a fresh look into the data. You should look for an RMS that comes with this functionality.
6. Automation
When you’re searching for an RMS, think of investing in one that provides complete automation. With the push of a button, all prices should go live and get seamlessly interconnected with your Property management System (PMS), hence all your channels are updated immediately.
7. Groups Module
A groups module helps team members find the right rate for the groups based on historical data and cost. A good RMS manages the group expectations, such as wash percentage and any updates needed, while seamlessly integrating with the PMS.
All of these factors make investing in an RMS a great choice for hoteliers. So, do you think your hotel needs an RMS? If so, here’s the Top 10 List of the Best Hotel Revenue Management Systems.
Mia Kun, originally from Hungary, Budapest, has been living in London UK while pursuing her interests in travelling and experiencing other cultures.
Next up in: Revenue Management Software
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Firstly, we assess
We evaluate objective(s), defining opportunities and setting goals.
Then, we plan
We make a plan detailing what should be done to help reach set goals.
Finally, we make it happen
We implement change, as planned, within set timeline and budget.
Firstly, we assess
We evaluate objective(s), defining opportunities and setting goals.
Then, we plan
We make a plan detailing what should be done to help reach set goals.
Finally, we make it happen
We implement change, as planned, within set timeline and budget.