Hotel revenue management systems are responsible for determining the prices of hotel rooms and keeping them at a level that guarantees the hotel will make a profit, but not such high prices that guests have no interest in staying there.
They’re also responsible for calculating occupancy rates, which helps hotels determine whether they need to put more money into marketing or if the hotels are experiencing demand because the prices are too high.
In this article, we’ll cover everything you need to know about hotel revenue management system in order to run your business smoothly and give you an edge over your competitors.
What is a Hotel Revenue Management System (RMS)?
A hotel revenue management system (RMS) is a computerized reservation and inventory control system that automates the process of managing the relationship between occupancy rates, rates, and inventory levels.
RM systems are designed to maximize revenue by negotiating the best price with suppliers and customers. They analyze previous data, take into account current conditions, and determine the optimal rate for each room in order to maximize profit.
Hotel RM software can also be used by travel agents when booking a stay at a hotel as it will identify rates based on customer preference or proximity to attractions.
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Benefits of Using a Hotel RMS
Hotels with revenue management systems are able to optimize their revenue by increasing the length of stay and minimizing the number of empty rooms. This reduces the risk of having a loss due to low occupancy rates. Besides following are a couple of benefits of using an RMS in the hospitality industry
An RMS is a crucial tool that helps your hotel optimize its income by maximizing your revenue and minimizing your losses. Revenue management can be as simple as a spreadsheet program or it could be an entirely automated system that maximizes the most profitable rates by analyzing customer behavior.
It can help hoteliers reduce their rates but still have high occupancy rates by adjusting prices based on demand. This ensures that the hotel is making enough money to stay in business.
Avoids mistakes that will result in a high accommodation cost
There are different types of systems for revenue management, but they all have the same goal: to maximize the revenue generated by a hotel. There are many different factors that affect how a revenue management software will work, including occupancy rates, the type of room and location.
RMS prevents the mistakes that result in accommodation cost by understanding your occupancy rate and using it to optimize the room rates.
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Makes use of large data sets to facilitate complex decision-making
This system uses a variety to data sets, including occupancy rates, room rates, length of stay and cancellation rates. Revenue is maximized when the hotel fills all its rooms at the highest possible rate. This is accomplished by analyzing each data set in light of the others to determine the best way forward.
Saves valuable time
A revenue management system can help hoteliers save valuable time. For example, they can be used to generate reports and track the hotel’s occupancy rates by day, week, month or year. According to a recent study by Hotel Tech Report, hotels using an RMS, saves 20-40 hours of employee time per month.
This is important because it enables managers to see how well their marketing efforts are working and what they can do differently next time around. Most importantly, revenue management systems help make sure that inventory is maximized at all times in order to maximize profits and minimize costs.
Increases Asset Valuation
Revenue management system is an important aspect of a hotel’s success. An RMS can increase asset valuation by maximizing the value of unused inventory, optimizing the number of guests in rooms at any given time, and generating higher revenues through direct bookings. When hotel owners save extra capital from the increased revenue, it leads to increased asset valuation.
When it comes to revenue management, there are two types of properties: those that have a system and those that don’t. If you’re in the latter category, there’s no time like the present to get ahead of your competition by investing in your future.