Who Uses Hotel Revenue Management Systems (RMS)?
Hoteliers: Hotel owners and managers can use an RMS to enhance portfolio profits for guest rooms and event space. As the hotel brand grows, a comprehensive suite of guest room revenue management can help sustain that growth. Lastly, hotel revenue managers will make confident decisions regarding hotel room-type offerings and channel distribution, thus maximizing profits.
Hospitality groups: The majority of hospitality investment groups are private equity firms that invest in hotels, resorts, and other lodging-related establishments. Hotel revenue management software will assist hospitality investment groups in monitoring market trends, market demands, and supply to help spot possible revenue enhancement scopes.
Rooms controllers: Several RMS keep track of no-shows and cancellations, which would be helpful to room controllers. Room controllers are responsible for organizing and coordinating reservations for the property, in addition to balancing the house. Both independent and hotel chains have room controllers that assist in reservation management. The room controller can adjust rates or offer discounts to drive confirmed bookings through the platform.
Challenges with Hotel Revenue Management Systems (RMS)
Hotel revenue management solutions can come with various challenges.
Accessibility: Hotel RMS are mainly sold as standalone products; however, some are integrations within hotel management software. Integrated solutions can experience communication errors regarding property room inventory, causing incorrect pricing of room rates. System users should monitor connections and ensure correct real-time information is processed and reported.
Market inaccuracy: It can take time to accurately identify the property's demand between online booking agencies and hotel search engines. This oversaturation of web-based market data may skew the reports and potentially interfere with pricing algorithms. If the hotel property receives a substantial amount of third-party web traffic, utilizing an RMS that filters in-house data from transferred data is critical.
Data dependency: The hotel industry strives to provide an optimal guest experience. Therefore, focusing too much on data and analytics can be problematic and distance the property from its initial goals. Data-driven decisions are vital to the property's success; however, hoteliers should always consider the experience being sold. Ignoring the market climate and personal influences of room pricing can potentially hinder profitability. Buyers should combine analytics with anecdotal business intelligence to help hoteliers maximize revenue and profitability.
How to Buy Hotel Revenue Management Systems (RMS)
Requirements Gathering (RFI/RFP) for Hotel Revenue Management Systems (RMS)
RFIs and RFPs provide best practices that meet buyer requirements in the hospitality industry. For an independent or boutique hotel, purchasing a hotel RMS will pinpoint valuable business and make an immediate positive impact on revenue.
The business pain points might be related to all the manual work that must be completed, such as budget forecasting or aggregating data from other hotel technology. Buyers should create a criteria checklist that addresses these concerns. Also, hoteliers must determine the number of employees who will need to use this platform, which may require licenses.
As for hotel chains, creating a checklist of criteria for the mass market can help the team identify necessary and nice-to-have features. This detailed guide to the ideal hotel RMS should cover the present and future needs of the property. For example, acquiring an RMS for multiple or more extensive properties, such as resorts is vital for a hotel chain. Hoteliers want an RMS that grows alongside the company if there is a brand expansion or property renovation in the future.
Compare Hotel Revenue Management Systems (RMS) Products
Create a long list
When comparing hotel RMS, the first thing to identify is the critical functions required for the platform. For example, a yield management tool should be compatible with hotel chains and independent hotels. This tool may atomize the rates based on occupancy percentage. Many revenue management solutions feature an automated pricing recommendation tool that is based on booking activity. Yet, the overall must have for any hotel RMS is have machine learning capabilities that increases the hotel's profitability.
Create a short list
After identifying critical features for hotel revenue management software, evaluating qualified vendors is the next step. Narrowing down the list of contenders to at least three is preferred for proper evaluation. Cross-examining the long list requirements against the short list will assist in decision making. For example, do prospective revenue management solutions offer property management system integration?
Conduct demos
Conducting a software demonstration is an excellent opportunity to see how the different hotel RMS operate. Demos should be performed live by team members using the platform and who know the system algorithm. Ideally, the demonstration should illustrate the impact on the guest experience. Hotel owners may take this opportunity to evaluate different scenarios and how this affects distribution channels.
Selection of Hotel Revenue Management Systems (RMS)
Choose a selection team
Purchasing a hotel RMS directly affects the hotel's reputation and profitability. Therefore, the team responsible for selecting the revenue management software should include members from sales and marketing, finance, and guest relations. Including multiple parties in this selection process ensures overall company goals and viewpoints are achieved.
Negotiation
Once the team decides which hotel RMS are worth pursuing, vendor negotiations will take place. Negotiation happens between the buyer and vendors from the shortlist. Product features and functionality may overlap; therefore, product pricing and accessibility are crucial. Some hotel revenue management vendors will offer discounts, and others will offer packaged feature add-ons. One add-on may be the ability to move historical data from third-party systems to the vendor's platform. Before making a final decision, the buyer should actively negotiate, exploring all cost-saving avenues.
Final decision
The RMS should be decided based on the buyer's needs and the key performance indicators (KPIs). Hotel owners want a product that distributes optimal pricing and revenue management strategies, thus increasing RevPAR. Once all information is gathered regarding the revenue management solutions, a confident decision can be made, and the software may be purchased.
