Revenue management is an important concept for those in the hotel industry, and a revenue management system (RMS system) can go a long way towards ensuring you are making informed decisions, based on evidence and data. In this article, you will find out more about RMS software, and the most important features to look out for.
What is Revenue Management?
Broadly speaking, revenue management is the practice of making the right strategic and tactical decisions, in order to maximise the amount of revenue you generate. To actually achieve this, you will need to make important choices linked to pricing, promotion and distribution, so that you bring in as much money as possible. Hotel owners should think of revenue management as: the sale of the right hotel room, to the right person, at the right point in time, for the right price, via the right distribution channel, while maintaining the best cost efficiency.
What is a RMS System?
A revenue management system, or RMS system, is a form of hotel management software, which allows you to quickly and easily carry out many of the tasks associated with revenue management. For instance, you will be able to carry out complex calculations quickly, or access real-time analytics, so that you can make informed decisions. Typically, the system will be able to draw on information from both internal and external sources. A RMS System will use the data and its own algorithms to carry out a real-time analysis of the state of the market, and of demand, in order to calculate ideal room rates.
Why Every Hotel Needs a RMS System?
Effectively running a hotel is complicated and involves juggling many different responsibilities. However, one of the most significant is managing financial performance and your overall business results. This is where a revenue management system can be beneficial, allowing you to track performance information in real-time. Moreover, your RMS system should allow you to create realistic and accurate forecasts, so that you can anticipate demand and make the necessary adjustments to maximise the amount of revenue you are generating.
What Are the Most Important Features of a RMS System?
Revenue management systems tend to be complex software applications, with a wide range of different functions. Below, you will find more information about some of the most important features for your RMS system to include.
1. Forecasting Management
The entire premise of hotel revenue management relies heavily on being able to anticipate demand ahead of time. Therefore, any RMS software you use should offer comprehensive forecasting management functionality. This should include the ability to quickly and effortlessly create accurate forecasts, based on all of the available information and data. For maximum accuracy, it should be possible to generate forecasts based on past performance data, information that is currently in your books, previous booking patterns, local events, and patterns connected to pricing. These forecasts should also be able to be adjusted in real-time, simply by making changes to the data.
2. Pricing System
One of the most important features for revenue management hotel software is a pricing system, which can make intelligent proposals for room rates, based on the anticipated level of demand. Ideal room rates should be able to be calculated for individual bookings, corporate bookings, group bookings, leisure bookings and more. The benefit of this is that information about ideal pricing can be provided in real-time, ensuring you are able to respond quickly to any changes. It is vital that the rates you are charging can be easily adjusted and put into effect too.
3. Integrations With Third-Party Software
A modern hotel will typically use a number of different software solutions, rather than one single hotel management software solution. For this reason, it is important that your revenue management system offers integration with third-party applications or systems, so that they can work in conjunction with one another. Some of the most important software integrations include channel management, rate-shopper software, property management systems, and customer relationship management. In all cases, two-way data sharing should be possible.
4. Channel Management
A high-quality RMS system will also have channel management functionality, allowing you to distribute inventory information across a variety of channels. This information could include live room availability and live room rates, with channels including the hotel website, OTAs like Expedia, and hotel booking platforms like Booking.com. Crucially, this channel management capability should also allow you to manage rates on each of those channels and to manage availability per channel. As an example, you could set it so that a certain percentage of your rooms will be distributed through the hotel website only, avoiding commission on those, while still catering for other channels too.
A cloud-based revenue management system is advantageous for a number of reasons, with the main one being the improved data sharing capabilities provided. This will mean that larger amounts of data can be handled, while it will also be easier for people to share data from different departments and even different hotel chains. In addition, the use of cloud technology is also beneficial for keeping software updated. New versions can be rolled out regularly, even with fairly minor updates, meaning you will always have the latest and best product.
Another crucial function for your RMS system is an ability to produce a number of different reports. These reports should clearly present information on topics like revenue generation, or the performance of specific channels. Reports should also feature revenue management KPIs, like revenue per available room (RevPAR). The best solutions will offer various formatting options, making the reports easier to share with stakeholders. They will also offer a number of export options, along with the ability to save reports in popular file formats.
7. Data Visualisation
Finally, the information provided by your revenue management system may need to be analysed by multiple departments, and may need to be presented in different ways. For this reason, it is vital that the software is able to offer data visualisations, such as charts, graphs and other graphics. Not only can this make it easier to share data with others, it can also make it easier to identify significant trends. This can then assist with revenue management by allowing you to act more quickly to resolve issues.
An effective revenue management strategy can help you to improve financial results by maximising the amount of money being brought in. For best results, you must find the best RMS software solution for your particular needs, and the features listed in this article are among the most important to look out for.
More Hotel Management Software Tips
Would you like to learn more about hotel management software solutions which can help you to grow your hotel business? In the following articles you find more information about the most important hotel management software for hotels:
- PMS System: What Are the Most Important Features?
- Hotel Distribution Channel Manager: What Are the Advantages?
- Hotel App: Optimise Your Guest Communication, Experience & Revenue
- Hotel Management Software: What Are the Benefits for Hotels?
- PMS Software: Which Software Integration Should a PMS Have?
- Hotel Software: The Most Important Software Solutions for Hotels