What Is a Revenue Management System?

May 8, 2024 Sini. M
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A revenue management system (RMS) is a software tool that assists hotels in managing various revenue-related tasks such as data management, pricing, inventory, and reporting. The system employs a rules-based or analytics-based pricing algorithm, which considers both internal and external data to provide suggestions for pricing and length of stay restrictions.

 

If you’re still using spreadsheets to manage your revenue, it’s time to ditch the time-intensive task of yore and consider using technology that simplifies your processes, saves time, and increases your revenue. Luckily, revenue management technology has greatly improved since it was first introduced in the 1980s. It can now analyse real-time data and forecast demand to help property managers make informed decisions.

 

How Does a Revenue Management System Work?

A revenue management system calculates the optimal prices for hotel rooms using real-time analysis of historical, competitor, and market data. While the range of features may vary among RMS providers, the most notable players in the hospitality field integrate their RMS with property management systems and channel managers to synchronise data.

 

What Are the Benefits of a Revenue Management System?

Let’s discuss why revenue management systems are beneficial in the hospitality industry.

 

Increase Revenue and Profitability

Revenue management is a strategy that can help hotels increase their revenue and profitability by optimising prices and occupancy based on demand and competition. This can result in a higher RevPAR and overall revenue for the hotel.

For instance, if a hotel experiences high demand for a certain period, revenue management techniques such as dynamic pricing can help increase prices and limit inventory to capture the most revenue possible. On the other hand, if a hotel experiences low demand, revenue management techniques can help reduce prices and increase inventory to attract more guests and fill its rooms.

By using revenue management techniques effectively, hotels can achieve their revenue and profitability goals while also satisfying their guests’ needs and expectations.

 

Improve ADR and Occupancy

As a hotelier, you can attract more guests, increase your hotel’s occupancy, and enhance your Average Daily Rate by analysing market trends, demand patterns, and competition. This analysis helps you set prices and inventory levels that align with your guests’ spending habits. After all, the ultimate goal of revenue management is to achieve higher revenue, which can be accomplished by following these practices.

 

Amplifies Guest Experience

Optimising your prices and inventory using revenue management techniques can help ensure that your guests receive the best value for their money. For instance, during periods of low demand, you can attract guests by offering value-added packages and reducing prices. In contrast, you can offer premium prices and exclusive packages to cater to high-end guests during high demand.

By providing personalised pricing and packages tailored to your guests’ preferences, hotels can create a memorable and enjoyable experience.

 

 

Automates Operations

Hoteliers face the challenge of adjusting their prices based on constantly changing market conditions. They may have the necessary information, such as knowing when high and low seasons occur and when guests typically start booking for summer vacations. But, they often lack the time to adjust their rates across different booking channels and in their booking engine.

Dynamic Pricing solves this problem by automating price adjustments and room inventory management. It monitors bookings, cancellations, and room availability across various distribution channels. The system ensures room availability is optimised to maximise revenue while avoiding overbooking or underusing inventory.

 

Gain a Competitive Edge

By applying revenue management techniques such as dynamic pricing, you can optimise your pricing and inventory to provide competitive prices and packages that meet the preferences and needs of your guests. This will help you attract more guests and increase your market share compared to your competitors. Additionally, by monitoring your competitors’ pricing and inventory strategies, you can adjust your own strategies accordingly to remain relevant and competitive in the market.

 

What’s the Best Revenue Management Software for Hotels?

 

The ideal revenue management software for hotels automates rules and alerts, forecasts pricing, offers rate comparisons, and has a comprehensive dashboard with reports and insights. Let’s take a closer look at the eight best revenue management tools you can implement for your property.

 

1. RoomRaccoon

Hotel competitor analyses

Dynamic pricing is a significant feature of the RoomRaccoon channel manager that helps improve your hotel’s revenue management. This tool enables you to create pricing scenarios that adjust the rates of particular rate plans automatically based on room availability and check-in time. As a RoomRaccoon user, you can access dynamic pricing, with the option of custom scenarios available for those with Premium and Enterprise subscriptions.

RaccoonRev is a competitor analysis tool that allows customers to view three competitors’ rates and availability. Based on their price fluctuations and availability, you can use dynamic pricing scenarios to price your room rates competitively.

Another great function of RaccoonRev is that it enables you to create pricing scenarios that not only consider competitor room availability but also respond to changes in competitor pricing, both increases and decreases. This means you can adjust your rates based on internal data and on external market movements.

Get the RaccoonRev Brochure

2. RoomPriceGenie

Trusted by more than 2000 hoteliers worldwide, RoomPriceGenie is committed to providing independent hotels with the best possible pricing options with minimal effort. It’s quick to implement, and easy to comprehend, and the team at RoomPriceGenie understands that the solutions required by hotels must be user-friendly.

 

“RoomPriceGenie automates the pricing process, taking the guesswork out of the equation. It helps hoteliers maximise their revenue without all the additional work typically associated with pricing hotel rooms. It is designed to be so user-friendly that non-experts can use it with ease, and experts can have all the flexibility they need. It’s fast to implement, intuitive to use, simple to understand and completely transparent” _RoomPriceGenie Revenue Manager.

 

3. RevControl

RevControl is a cloud-based revenue management software that not only maximizes your room revenue potential, but also provides exceptional customer support. They proudly serve over 550 hotels, hostels, and holiday parks in 18 different countries. Developed by Dutch hoteliers and software experts, their system delivers tangible results.

What can you expect? On average, their clients experience a room revenue increase of up to 25%. Additionally, their support garners an impressive 4.9 out of 5 score on HotelTechReport, reflecting their dedication to customer satisfaction.

 

4. Smartpricing

Smartpricing is a user-friendly tool that simplifies dynamic pricing strategies for everyone. By analysing the data of your accommodation as well as the latest market trends, Smartpricing eliminates the complexity of revenue management and automates the rate management process, saving you time and effort. This RMS has a proven track record of increasing income for accommodations by an average of 30% annually.

 

5. Pricepoint

Pricepoint is an advanced price optimisation engine that uses real-time data analysis to help you keep ahead of competitors. Developed by experienced industry experts and data scientists with two decades of experience in building AI-powered revenue management systems, Pricepoint continuously monitors the market and adjusts room prices to ensure you stay ahead of the curve.

 

6. BEONx (Beonprice)

BEONx is an all-inclusive platform that helps hotels maximise their profits by going beyond revenue management to total profitability. The company was established in Salamanca, Spain, in 2012 to help hotels be less manual and more digital.

 

They noticed that many hotel revenue managers were still using outdated methods that were no longer effective in the digital age. To address this, they created an AI-powered platform that simplifies the transition from RevPAR to RevPAG (Revenue per Available Guest), resulting in personalised guest journeys and increased profits.

 

7. Lybra Tech

Lybra Tech develops big data technology solutions for hotels and tourist destinations. Their advanced technology collects and analyzes large amounts of data in real-time, providing valuable insights and recommendations to optimise business operations, increase revenue, and enhance customer satisfaction.

Whether you want to improve pricing strategies, boost marketing campaigns, or gain a deeper understanding of your target audience in Germany, Spain, France, Italy and Portugal, Lybra Tech has the tools to help you achieve your goals.

 

8. Happyhotel

Happyhotel is a fast-growing startup located in Offenburg, Germany. They have developed software that assists hoteliers in automating various hotel management processes, with a focus on revenue management. Their software is used worldwide in the extensive hotel industry to increase revenue.

 

How RaccoonRev Helped The Bull Auberge Optimise Rates

The Bull Auberge, located in a town that’s known for its wedding destinations, faced challenges in standing out among larger competitors. To overcome this, owners Jake and Katy decided to implement RoomRaccoon’s property management system with integrated dynamic pricing.

With RaccoonRev, they could compare rates with their competitors and implement dynamic pricing scenarios while also forecasting demand up to a year in advance. The system’s intuitive interface streamlined operations and automated rate updates saved time. Due to these improvements, the Bull Auberge achieved an impressive average occupancy rate of 80%.

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Sini. M

Sini is an accomplished Content Manager at RoomRaccoon. As an agency-hailed talent, her work brings a fresh creative flair to the world of SaaS. And she brings her very own brand of sass to the SaaS world. While not on the clock, Sini enjoys a glass of fine wine, and well, her privacy.

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