Most of the businesses in the hospitality industry rely heavily on user data accumulated over time to design successful promotion strategies.
This data may include consumer behaviour, time of bookings, types of bookings, factors contributing to customers’ choice of hotels and more. Thanks to technology, the hotel industry can easily access this data because of a reliable and powerful revenue management system (RMS).
The concept of revenue management for the hospitality industry closely aligns with the concept of data analytics that puts in place various tools and algorithms to analyse the key market parameters like sales trends, historical aspects, and demand prediction. These insights help you to make informed decisions with the ultimate objective of profit optimization.
The revenue management system is a systematic framework designed for effective operational and revenue management, a better understanding of consumer behaviour, and optimal utilization of resources. Let’s take a quick look at the myriad benefits that a revenue management software guarantees.
Why your hotel business needs a revenue management system?
- Simplifies operational management.
A hotel revenue management software addresses almost all the challenges posed by the conventional system of management, in which there was a huge dependence on human interventions, which are prone to errors. The revenue management software carries out complex calculations, maintains revenue records, checks competitors’ prices and does a lot of other functions efficiently and accurately with no scope for errors.
- Sets dynamic prices in real-time.
The revenue management software tracks market demands and other conditions in real-time to set prices per room that can maximize your profits. An RMS reflects all the changes in terms of room availability, prices, and special offers across all the channels in real-time to easily set dynamic pricing accordingly across various distribution channels and all OTAs based on market, season, occupancy, etc.
- Gives you access to data analytics and key performance data.
An RMS delivers up to its full potential by generating valuable insights through relevant data. This data plays a pivotal role in maintaining records of prices, demand, inventory, details of services being offered and information about other competitors, which further helps in formulating better strategies.
- Data segmentation makes targeting the right customers easy.
With data accumulated over time, revenue management software carries out data segmentation based on various categories like business customers, leisure customers, etc. These clustered segments can be targeted with customized deals while keeping in mind numerous factors like their price responsiveness, price sensitivity, the purpose of visit, and more.
- Makes your business more profitable.
The revenue management software plays a vital role in developing a future roadmap to grow your business. It looks at the intricacies of the data collected around hotel bookings, cancellations, occupancy rates, and average daily rates. It examines all these factors and uses them to estimate the revenue. This analysis is instrumental in making any policy change if needed.
The software also gives an insightful forecast of demand estimates and suggests customer behaviour. You can use these insights to create a plan that meets the expectation of your customers.
Thus, you can use revenue management software to devise better marketing strategies, which can eventually increase your profits.
The Bottom Line
Businesses can only survive if they continuously strive to maximize their profits and leave no stone unturned in doing so. The hospitality industry is no different and to compete in the modern world, you have to make structural changes by investing in revenue management software and using it to its maximum potential to grow your business.
Karan Iyer is an end-to-end digital marketer and blogger who inherently understands the hotel industry with his hospitality background.
Karan knows how to convert the pain points and challenges of the hotel industry into business opportunities, and that’s what he writes about for his readers. He also shares industry trends, insights and news to help his readers stay up-to-date.