With the consistent growth of the global hospitality industry, analysts expect the hospitality market to reach 9,950...
- Revenue Management System: What You Need to Know About It
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A hotel packed with guests does not always mean it’s profitable. Understanding the hotel’s overall revenue primarily determines how well the business runs. And today, revenue management is considered the cornerstone in achieving success and profitability among hotels.
Did you know that utilizing an exemplary revenue management system can increase your hotel’s revenue by at least 10%? Thanks to this innovative platform, it’s now easier to analyze and track the necessary data that uncovers opportunities to earn more.
This guide discusses everything you must know about hotel revenue management systems, their benefits, key integrations, and factors to consider when choosing the right one for your hotel.
What Are Revenue Management Systems?
Hotel revenue management is a strategy for hoteliers to forecast the demands of guests by understanding their characteristics, segmentation, and buying patterns. These systems also enable you to attract the right travelers with optimized room pricing to increase your revenue.
This is where revenue management systems come in. An RMS or a revenue management system is a software solution that carries out revenue management obligations, promoting efficiency and effectiveness.
This platform leverages your past and present data to make better decisions regarding increasing your hotel revenue and profitability.
Revenue management systems for hotels utilize your data and an algorithm to analyze market trends in real-time to help hoteliers calculate the best room rates.
How It Works
Traditionally, hotel revenue management software has been clunky, difficult to use, and often provides incorrect or dated information. For decades, this has simply been what hoteliers had to deal with, as these systems, while imperfect, still provided some benefit by helping to set prices for rooms and events.
More robust, modern, and easy-to-use hotel revenue management software offerings exist today. One of the more standout offerings is HouseCount RMS. Built by hoteliers for hoteliers, HouseCount was created with the user in mind. The software itself can provide accurate and effective pricing recommendations for casino-hotel properties by capturing information and utilizing it to continuously learn and create transparent, flexible, and accurate pricing recommendations.
Why Revenue Management Software Is Important to Hotels
Hoteliers must face the fact that increased competition and rising operating costs are inevitable in the industry. This is one of the most essential reasons you must rely on an efficient and reputable revenue management system.
Revenue management systems, regardless of the hotel’s size and capacity, can perform complex calculations and provide visual data for better understanding. This allows you and your team members to track and analyze market data in real-time to generate the best ways to achieve revenue growth.
These are all possible— and with HouseCount, management doesn’t need to be physically present to increase the number of hotel rooms sold. Moreover, an RMS also allows easier price adjustments across all distribution channels. You can accomplish this without manually entering your system's login credentials.
With these innovative functionalities, it’s easier to improve on key performance indicators, including the following:
- Occupancy rate
Using RMS is even more critical in hostels and smaller hotels. When your establishment has fewer rooms, there’s a greater need to maximize occupancy and revenue. At the same time, RMS is also essential in larger hotels for the same reason, but to deal with more moving parts related to profitability (rooms, casinos, events, etc.)..
However, don’t get us wrong. Revenue management systems were not created to replace your hotel staff. Instead, these platforms give your team members more time and energy to accomplish other essential tasks. Plus, they allow you to be more creative and think more flexibly for better pricing strategies.
Revenue management systems also eradicated the need to use spreadsheets and rely on manual pricing. They allow revenue managers to focus on getting out into the industry and work hand-in-hand with three departments:
- Front office
Moreover, revenue management systems allow revenue managers to focus more on long-term strategies for better overall revenue.
Your hotel’s other departments can also benefit from efficient revenue management systems. Other managers can leverage the platform to accomplish more critical tasks and make better decisions. Marketing and sales VPs can adopt a more sustainable revenue culture for each level of your organization.
Key Revenue Management Platform Integrations
Integrations are always beneficial, especially in the hotel industry. These functionalities allow you to focus on one central platform for all tasks and responsibilities and also reduce the potential of human errors and carelessness.
Even in revenue management systems, integrations are helpful in better monitoring historical, market, and competitor data. Moreover, these useful integrations can reduce time-consuming processes, which can harm your team’s overall productivity.
There are two main integrations to consider when choosing the most suitable revenue management system for your hotel: channel manager and property management system.
A single place to manage everything
Property Management System
Higher potential to be fully booked
Multiple functions in one system
Integrating your revenue management system with a channel manager allows seamless real-time distribution of your listings. These can be anywhere across online travel agencies and linked booking channels to your hotel.
This integration also reduces the need for third-party distribution software to save time and money. Let’s look at the main benefits of this key integration below:
Sometimes, hotels use an overbooking strategy to avoid losing revenue and get as close to achieving 100% occupancy as possible. This strategy has an inherent risk, but a channel management system can help alleviate some of those risks.
Integrating your channel manager into your revenue management system eradicates issues with unwanted bookings and allows you to confirm bookings more seamlessly without errors that would have a higher potential of happening if the process was managed manually. .
Additionally, RMS channel managers can also facilitate real-time booking updates. Real-time updates help potential customers become instantly updated regarding your hotel’s status, so, for instance, they can at least be informed when a room isn’t available in advance. As for your hotel staff, real-time reservations allow them to be more prepared, especially when maximum occupancy has been reached.
The channel manager lets you list your rooms on various third-party websites, including online travel agencies. This assists with maximizing your bookings while increasing your hotel’s visibility online. Plus, it’s how you can experience the billboard effect.
The billboard effect is three-way:
- Online users view your listings on third-party websites.
- They will likely visit your hotel’s website out of curiosity.
- You can then experience an increase in your website’s direct booking option.
Property Management System
Property management systems facilitate two-way integrations with revenue management platforms. Aside from a channel manager, PMSs are responsible for sending availability, real-time rates, and restrictions to your hotel’s distribution channels.
With this integration, you can expect better room revenue and inventory maximizing, which means more satisfied guests.
Updating and processing bookings and reservations are faster with PMS integrations. You don’t need to ask guests to log in to the online travel agency, reducing potential mistakes that can prolong the process.
At the same time, updating canceled reservations is also faster. This guarantees bookable listings are visible on all channels within a few minutes.
Reach International Guests
Leveraging integrations can boost your brand visibility. This gives you a chance for international guests to be introduced to your hotel and what it offers. Plus, expanding your audience and connecting with more online channels is easier.
Your RMS integrating with PMS and channel manager puts your hotel on the global map, giving you the extra booking you need to increase occupancy and overall revenue.
What to Look For in a Revenue Management System RMS
Revenue management systems in hotels often involve comprehensive software packages with functionalities and features to make everyone’s job at a hotel or resort easier. But different systems have different functions, and you must know precisely what your hotel needs.
The most important features to consider in a revenue management system are summarized below:
Automation is a critical factor in choosing a robust revenue management system for your hotel. Hotel automation allows seamless operations with almost no human intervention that can minimize potential human errors.
When a revenue management system facilitates automated recommendations, it’s easier to accurately compute ideal room rates with the platform’s unique algorithms. This also allows quicker rate adjustments while considering the current market and performance data.
Automated recommendations also allow instant reflection of price changes in your integration with a property management system.
Price Sensitivity Chart
Price sensitivity is important in hotels. It helps you measure how the prices of your rooms and additional amenities affect your customers’ buying patterns. Keeping track of your hotel’s price sensitivity also helps you easily understand the impact of your room and event rates on your hotel’s overall profit.
Numbers and other data types can get confusing, especially when you must monitor all the past and present information regarding your room prices. This is why utilizing a chart is critical. Having an RMS with price sensitivity charts gives you a quick overview of room prices that can help you establish more optimal rates for your guests.
Price sensitivity charts combine your current data on occupancy and revenue, guaranteeing you can create more accurate price points. This reduces the risk of setting value ranges that can negatively impact your hotel.
Choosing an RMS that leverages open pricing is also an outstanding strategy to maximize your revenue. Open pricing is different from BAR or the best available rate. This involves utilizing incremental price point ranges in relation to a demand curve.
Revenue management systems with open pricing allow you to offer attractive rates, regardless of the circumstance or the current season you’re in. It’s a pricing model that ensures you are always up-to-date with potential distribution channels and profitable offers.
Pacing reports provide hoteliers and guests with brief overviews of the rooms’ revenue in the current and previous years. These reports are widely-distributed to primary functions, including the following:
Revenue management systems should closely work with pacing reports to generate deeper and more significant revenue details. More importantly, the RMS should monitor by week part, room type, and discounting.
Data Visualization and Intelligent Reporting
An outstanding revenue management system should present graphs for more accessible data visualization. This makes determining patterns and market trends affecting your rooms' prices easier.
For instance, graphically, rate insight can allow revenue managers to predict reasonable room prices. These graphs can also forecast rating and ranking performance, allowing hotels to adjust prices accordingly.
Visualizing parity insights can help hotels compare rates faster, especially from metasearch engines and online travel agencies. This can establish consistent rates for all distribution channels and prevent guest confusion.
Lastly, an RMS should also visualize revenue insights because they help gauge past and future hotel performances, which is key to smarter hotel analytics. Your hotel’s revenue management system must consolidate all reports on KPIs to facilitate easier comparison of your hotel’s performances through the years.
Choosing a revenue management system that can run on a multi-tenant cloud architecture model is also a better option. This allows quicker integration and seamless data-sharing to quickly locate changing trends affecting your hotel’s performance.
Moreover, you want a revenue management system that can handle challenging and dynamic requirements while allowing you to achieve your future goals. RMS, which relies on cloud technology, can help you perform smoother hotel operations, saving time and effort.
A recent survey by Flexera revealed more than 50% of businesses constantly felt the need to increase their cloud usage. Plus, public cloud adoption also continuously accelerates, convincing more hoteliers to adopt cloud-based solutions in their systems.
A few key advantages of cloud technology are summarized in the table below.
You can guarantee minimized revenue leakage with cloud-based systems. If you’re fortunate, there’s a chance these errors can be eliminated. Because cloud infrastructure presents infinite resources, it scales up and down quickly, allowing faster adjustment.
As a result, you don’t need additional costs when upscaling these solutions. Moreover, cloud-based RMS don’t need hardware purchases, reducing your capital investments in IT infrastructure.
One of the best things about cloud technology is that it allows your hotel to respond quickly to sudden adjustments that should be made to address changing business needs. This promotes easier strategies to outpace and outrank your competitors.
Cloud technology features high-security protection and encryption to keep your data and records confidential and safe. These additional protection methods are not as easy to implement when you prefer in-house systems.
Enhanced security also means getting the best of technology updates, policies, and controls, ensuring regular compliance with recent regulations.
Better Customer Experience
Because cloud technology offers improved agility, you can also guarantee your RMS to perform the following tasks without relying on IT experts:
As a result, your hotel can implement better billing and pricing processes and personalized product bundles. These can allow your business to exceed client expectations.
Group Booking Pricing Module
Revenue management systems must be smart enough to support group booking pricing modules to enable hotels to accept group booking requests easily and more efficiently. This functionality also allows your property to accept reservations for conventions, events, and other leisure travel purposes.
Considering this feature means you must also consider the following factors for an ideal group rate:
- Departure and arrival dates
- Group size
- Type of rooms
- What hotel facilities the group plans on using
After entering these details, a robust RMS should automatically calculate an optimal group rate. But it also presents a secondary price, the lowest rate you can negotiate with. Should the group prefer the lower rate, selling your property to the open market from a yield perspective is better.
Relying on a revenue management system with group booking pricing functionality allows your hotel to remain competitive in the market. This feature sets you apart from other hotels in the same location.
Moreover, group booking pricing strategies can also help you identify the best rates to generate the highest profit and revenue for your hotel. This makes it easier to decide on more data-driven decisions.
How to Boost Revenue With Luxe Pricing’s Revenue Management Tool HouseCount RMS
Increasing your hotel’s overall revenue can be a challenging task, especially when you don’t utilize the right tools. Implementing the right solutions can help you achieve your business goals and stay ahead of your competitors.
Luxe Pricing, a hotel solutions company established by hoteliers, takes pride in more than five decades of experience in the following areas:
- Marketing and sales
- Hotel operations
- Revenue management
- Combined physics, engineering, and math
Luxe Pricing consists of personalized services for hoteliers to enjoy its various software products. It also combines various engineering techniques that can be used to adjust pricing strategies.
One of Luxe Pricing’s recent innovations is HouseCount RMS, a cloud-based software solution with accuracy in its real-time dynamic strategy for hotels, theaters, and events. Let’s look at HouseCount RMS, Luxe Pricing’s unique revenue management tool to help boost your hotel’s performance, gain new customers, and encourage old clients to return and rebook.
HouseCount RMS Features
One thing that sets HouseCount RMS unique is its utilization of advanced pricing science strategies on the market. The system’s pricing recommendations allow customers to create real-time reactions while limiting user-initiated override requirements.
HouseCount RMS features speed, accuracy, and guaranteed adjustments based on client demands. It’s robust and user-friendly with its back-end technology, featuring the best pricing recommendations. HouseCount RMS utilizes the fundamentals behind Feedback Control Theory.
This hotel revenue management system considers three main stages in its platform: input, process, and output. It leverages all critical factors affecting hotel pricing, assuring guests that all recommendations are accurate and transparent.
A couple of the systems’ key benefits are outlined in the table below.
Inventory Type Pricing
HouseCount also features pricing strategies by inventory segment, allowing you to glimpse each room type’s price level. This also allows quicker aggregation into more significant inventory categories. Plus, HouseCount RMS enables quick customizations with no downtime.
Automatic and Real-Time Pricing
Because of HouseCount’s Feedback Control Theory, this revenue management system can adapt to changes in clients’ demand and hotel suppliers in real-time. This results in more accurate, transparent, and flexible pricing recommendations.
HouseCount RMS also guarantees no downtime in generating new pricing recommendations according to data about client demands and hotel inventories.
Autopilot pricing ensures HouseCount’s autonomous strategies, making it easier to switch the autopilot on and off, depending on the inventory date. This guarantees pricing coverage happening around the clock.
Integrations are always critical. You need a hotel revenue management system to efficiently work with your current tech stack to limit confusion and errors. HouseCount enables seamless integrations with famous third-party solutions providers to guarantee the smooth running of hotel operations.
HouseCount RMS Competitive Advantage
Today, it’s no surprise that several revenue management systems are making their marks in the hospitality industry, especially in hotels. However, HouseCount RMS features a wide range of functionalities that showcase its competitive advantage in the market.
For one thing, HouseCount RMS is fully mobile. Hoteliers look for simplicity and convenience in a revenue management system. HouseCount RMS provides all that and limitless access anywhere and anytime from any mobile device. This ensures no hindrance to a hotel’s productivity.
Additionally, HouseCount RMS makes it possible to close RMS gaps. Because HouseCount prioritizes user experience, it created a technology that reassures clients of accurate pricing and outstanding usability. HouseCount RMS eradicates potential issues and human errors you can encounter from more traditional and old-fashioned revenue management systems.
Another exceptional competitive advantage of HouseCount is its ability to allow business owners seamless switching between properties. This means you can efficiently utilize this software solution to handle multiple properties and integrated resorts.
HouseCount RMS also features 360-degree campus views that can show the demand for all your nearby properties. This makes managing and handling pricing strategies from a single dashboard easier.
Lastly, this software also offers casino yielding, making it advantageous to more than just hotel properties. HouseCount RMS also allows adjustable reinvestment levels depending on player segments. This model can make hoteliers maximize their total profit, including ancillary profit from other activities.
Luxe Pricing’s Revenue Management as a Service (RMAAS)
Luxe Pricing Revenue Management as a Service gives your hotel or resort comprehensive strategies and methods for better software optimization, guaranteeing seamless operations across all your hotel departments.
Luxe Pricing’s RMAAS can also move forward with the following duties:
- Establish collaboration with the front-office team for maximized occupancies
- Coordinate with team members for weekly revenue strategy meetings
- Conduct revenue meetings bi-weekly with your hotel’s marketing, sales, and operations departments
- Guide you in choosing the best direct marketing strategies
Luxe Pricing’s RMAAS ensures that your Luxe Pricing software works effectively to optimize your hotel’s revenue and profitability 24/7.
The RMAAS also facilitates successful collaboration with your hotel’s marketing department for seamless revenue optimization. Special projects can also be conducted as requested.
Reporting and Analysis
Real-time marketing, group sales, post-mortem, and reporting analysis is also available.
A reliable and robust hotel revenue management system is all you need to handle pricing strategies and generate better ways to improve your hotel’s revenue. This platform allows you to forecast reliable price points depending on your customer's buying patterns, behavior, and expectations.
When choosing a hotel revenue management system, remember to look for features like open pricing, pacing reports, and cloud technology. All these features ensure that you’re getting a system that benefits your property.
Luxe Pricing’s HouseCount RMS is an all-in-one solution that combines unique methods for your hotel’s profitability and improved performance. With its convenience and seamless integrations, HouseCount focuses on closing RMS gaps and revenue leakage that can harm your hotel’s overall success. Get in touch to learn more about it and how it can help your property.
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