In this day and age of technology, only a few hoteliers are leveraging the Revenue Management System (RMS) technology to respond to the market demand today allowing them to maximize revenues.
If you are one of those who are still one of those who are not still using an RMS, it’s time to take advantage of the technology especially with today’s market uncertainty and volatility. Because an RMS can help hoteliers to respond competitively that in the end, will give you favorable results in terms of revenues.
But in order to understand revenue management solutions, we must first define what revenue management is. Read on as we discuss in this blog everything you need to know about revenue management in hotels, yielding management, and the best RMS to choose.
What’s inside this blog?
- What is Revenue Management?
- Revenue Management vs Yield Management
- The Benefits of Using a Revenue Management System
- The Best Revenue Management System to Choose
- Frequently Asked Questions About Revenue Management
What is Revenue Management?
In a nutshell, Revenue Management means selling the right room, to the right customer, at the right time, for the right price, through the right distribution channel, with the best cost efficiency. Revenue Management in Hotels allows decision-makers to make informed, data-driven choices, rather than relying on instincts.
Revenue Management vs Yield Management in Hotel Industry
Unlike the revenue management in the hospitality industry, yielding management means that hotel rooms can be sold for different rates, based on the season, the level of demand, the number of rooms already sold and a wide range of external factors besides.
For example in yielding management, a hotel room can be sold to two different customers for entirely different prices because of the amount of variables involved in the process. In this kind of strategy, the prices are adjusted in order to maximize business results.
Yield Management is a similar concept to Revenue Management but it is focused solely on the sale of fixed, time-limited inventory, such as hotel rooms.
The Benefits of Using a Revenue Management System
Since Revenue Management in Hotels involves the use of performance data and analytics, it will not take two to tango this strategy because with a lot of data you’d have to gather, you need to invest on man-power and time to get the precise results you’re aiming for. This is where the RMS comes in.
The primary reason why a Revenue Management System is important for those in the hospitality industry, regardless of the size of their hotel, is because it allows complex calculations to be carried out quickly and allows for the kind of real-time tracking of market data that is virtually impossible to replicate manually. This, in turn, allows hoteliers to make better decisions regarding pricing and distribution, in order to maximize revenue and, therefore, profit.
Read on to know the benefits of using RMS in hotel management.
1. Predicting future demand and increase revenue
The great thing about the revenue management system is that it automates your price adjustments. By letting the RMS optimize and handle your price adjustments in real time, you are guaranteed to sell at the most favorable price at any time and maximize your hotel revenue. With an RMS, you can benefit even from the smallest changes and attract more bookings at the best price possible.
2. Saving time and improving forecast accuracy
Access to future demand data is essential for hoteliers to be able to forecast demand and capture more bookings before your competition. However, getting data (market trends, booking patterns, guest preferences, etc.) on your own is time-consuming and reduces productivity.
By automating your revenue management strategy, you do not have to enter numbers and other data manually in Excel spreadsheets. This frees up the time of hoteliers, allowing you to focus on more important things. With the help of an RMS, you can eliminate the risk of human error and help you in decision-making.
3. Decreasing man-hours and enhancing profit margins
Because of the automation that the RMS provides, the man-hours will decrease as it usually requires almost no manual application, giving room for the enhancement of profit margins.
The Best Revenue Management System to Choose
There is a wide selection of RMS systems in the market at the moment that is why figuring out the best RMS can be quite a challenge. In choosing the best RMS, you have to select the one that suits the needs of your hotel. Do not get swayed by overpromises of RMS that says it can forecast 100% of your hotel revenue. Choose the one that is experienced and uses the latest technology, such as the ZEN eManager Express.
ZEN eManager Express features intelligent pricing, real-time automated updates, and in-depth analytics for performance review backed by artificial intelligence (AI). With this, you can reduce your manpower cost while getting the best prices worry-free. By using a powerful tool like ZEN eManager Express, you can get precise data while saving time, and it gives you a more accurate result, helping you increase your hotel revenues.
Get ahead of the game. Book your free appointment now at www.zen-hs.com/book-a-meeting/.
Frequently Asked Questions About Revenue Management
Q: What is an RMS?
A: A Revenue Management System, or short RMS, is a software solution, which allows you to carry out important revenue management tasks more efficiently and effectively. It will make use of data from your own hotel, and from the market at large, in order to help you to make more informed decisions about the most optimized pricing for each room type of your hotel
Q: What do RMS systems do?
A: RMS software solutions can help to calculate ideal room rates, allow rates to be adjusted quickly, provide projections of future revenue and profit, and offer information about competitors, allowing for a more strategic approach.
Q: What are the benefits of using RMS?
A: RMS allows hoteliers to make better decisions regarding pricing and distribution, in order to maximize revenue and, hence, profit. Here are the benefits of using RMS.
- Predicting future demand and increase revenue
- Saving time and improving forecast accuracy
- Decreasing man-hours and enhancing profit margins
Q: What are the common features of RMS?
A: The common features Revenue Management Systems are:
- Rate recommendations
- Competitor information
- Key performance data
- Revenue estimation
Q: What are the good RMS systems in the market?
A: There is quite a wide selection of RMS systems in the market at the moment. However, you have to select the one that suits the needs of your hotel. Do not get swayed by overpromises of RMS that says it can forecast 100% of your revenue. Choose the one that is experienced and uses the latest technology, such as ZEN eManager Express.
Q: What is Revenue Cycle Management?
A: Revenue Cycle Management (RCM)