Today, we all live in a very fast-moving, high-tech society; and yet, our technology always seems to be disappointing us. Unfortunately for hotel owners and revenue managers, the same issue applies to most revenue management systems (RMS). The majority of RMS providers overpromise and under-deliver, promising real-time pricing updates but only delivering updates once or twice a day. Their solutions adjust prices mostly based on historical rates… or pricing trends… or environmental factors… but not all of them together. Overall, most RMS just don’t work the way that hoteliers need them to.
Could this be what is holding back the hotel industry from sustained financial success? Obviously, unexpected factors – like the recession and economic crash, natural disasters, etc. – have taken their toll on the travel industry over the past ten years, but those situations outstanding, the industry is still struggling for profitability.
But that doesn’t have to be the case. There are RMS technologies today that make revenue managers more effective and save them time (on eliminating all of the minutiae of manual data collection and analysis). Sounds amazing, right? So how do you know which RMS to choose when you’re shopping around for a new solution?
Here are four important factors to consider when choosing the best possible RMS for your property:
Proactive AND reactive
Of course, RMS do need to be reactive in order to adjust according to changes in the market, pricing of the competition, environmental factors, etc. But a sophisticated, efficient solution must also proactively suggest rates a year in advance, based on up-to-the minute information. Imagine having to monitor 365 days of data and reports every day (exhausting!) manually, in real-time. Utterly impossible!
Let’s look at an example from a different industry. Remember those old-school GPS systems that would only provide a one-time route calculation? They were a good idea but not the most effective solution for real life. What if you got stuck in traffic or detoured off the calculated route? You need a GPS that will continue to update its route according to your current position in real-time. The same thing goes for an RMS; unless you have a reactive and proactive revenue management system, it would be impossible not to miss out on opportunities for new bookings.
Drives business to the most profitable channel
With many RMS, revenue managers are not able to drive business to specific channels. While it’s great to get more bookings, direct bookings are preferable because it earns the hotel 15-35% more by avoiding the huge OTA commissions. So an effective revenue management system will drive business to a hotel’s direct channel whenever possible.
Integration & automation
Most revenue managers do use technology to help with their daily pricing tasks: a RMS that will give you a daily rate suggestion, and a separate rate shopping report (that you have to decipher), and a channel manager add-on to manually update your changes. But these pieced together systems end up just making a revenue manager more work (and losing the hotel revenues) because they have to use each component separately and then combine all of the results into one, and then use the channel manager to update results manually. An effective revenue management system is a fully integrated RMS.
Technology is supposed to help, not hinder us
The test as to whether a revenue management system will be an effective tool, or just another time-waster for already overloaded revenue managers, is this single question: does it help me to do my job more quickly and efficiently? Does it help me to earn my property more money?
If your answer is no to any of these questions, then my recommendation is to get shopping for a RMS that will not disappoint… after all, I know of at least one that fits the bill!
Do you want more information about how to choose the best RMS for your property? Or need help evaluating your current solution? Contact us at email@example.com and we’ll be happy to answer any and all questions that you might have.
By Jean Francois Mourier, CEO of REVPAR GURU