Revenue Management Software for Hotels
24 Nov, 2022
If you’ve just decide to take up Revenue Management for your hotel and you’ve just invested on a brand new pen and a notepad you might be underinvesting. Like almost everything in life these days you need to start thinking about how to use your computer and the data it offers you to get the job done.
The primary goal of course is to increase your revenues and if you can get some good customer reviews while you’re at it then even better. Online reputation makes the job of hotel revenue management easier of course but in order to give that a push start you need a good RMS in place first of all.
An RMS – or a yield management system in some quarters – can be a simple way to get more of your ideal guests booking into your rooms if you know what you’re doing and for a lot of hoteliers that means investment in some good reliable revenue management software.
What are revenue management software in hotels?
Revenue Management software for hotels is a neat set of tools designed to set the right price for the right room type at the right time. It does through automation and intelligent reporting what previously would have been the sole raison d’etre of a revenue manager.
This is not to say that hotel revenue management softwares have put revenue managers out of a job – quite the contrary. Hotel revenue management softwares have helped revenue managers boost the incomes of hotel chains so much that many of them now use whole revenue teams to squeeze the absolute maximum out of every room available on every single day of the year.
So – RMS software is a way to use data to set the right prices. There are many, and there are of course pros and cons to each of them. Not all of them are suitable to smaller hotels and not all of them are malleable when it comes to hotels with specific requirements. Some of them will require you to have a specific revenue strategy in place going in and some of them will see it as their role to provide one.
There are a wide range of options available to you. Titans of industry and indie bands. Which to choose is a big question.
What Revenue Management Software do most hotels use?
The million dollar question that alas has no satisfying answer. The real answer to this question is that most hotels are different and require something different.
Smaller hotels will tend to work at a different pace to large hotel chains for example, and large hotel chains will likely have a revenue management process that is unrecognisable to independent hotels.
There really is no one solution that will work for hotels of all sizes so the only way to proceed is break down the most popular revenue management softwares across the hospitality industry and hopefully you’ll spot one that might work for you along the way.
Best Revenue Management Software for big hotels
Gamechanger by Duetto
GameChanger by Duetto uses more data than any other revenue management system out there. It’s officially in the business of helping you to craft an hotel revenue management strategy.
It uses a process called micro-segmentation to give you real time pricing. It was voted the ‘2022 best hotel software’ by Hotel Tech Report but I would personally apply the caveat that whatever hotel uses it really ought to have someone dedicated to using it full-time.
I say this because it gives you suggestions by the second and it somehow lacks a mobile interface so whoever wishes to get the most out of it better be seated at a computer for long periods.
IDeaS has a huge market share and has been in the game for around three decades. It’s popularity stems from the sheer level of automation it offers. Some hoteliers prefer a greater level of autonomy than it offers but that reluctance should be taken with a pinch of salt given the companies reputation for extremely accurate forecasts.
As with many of the other big dogs the company’s pros can be taken as a granted given the magnitude of their success story but the one con I’d bring to the table is that it’s pricier than a lot of it’s competitors, even if you opt for the monthly subscription.
With that in mind though it is the choice of some of the bigger hotel chains on the planet so you could say that not only might they be worth it but their clients tend to be people with deep pockets.
The Swedish company Atomize is relatively young in this space but they’re already working across forty countries to offer hoteliers the right prices for the the right room types.
Like the furniture from their part of the world Atomize favour a minimalist approach. They were the first company in their field to offer real time price optimisation so you know when they say they’re about dynamic pricing they’re not kidding around.
Their ideas are not popular among the more independent minded hoteliers. What some see as major pros are decidedly cons for those who like the final word on their pricing because Atomize put a big focus on automation.
They also have a dynamic price plan with a basic or upgraded option, making it one of the more affordable tools out there, just not the best fit for those who wish to be in control.
RoomPriceGenie is very popular among independent hoteliers. I’ve no doubt you’ve hear of it before. Their focus tends to be strategic pricing to help smaller hotels compete with larger chains and in that regard it is a well-formed tool.
The primary issue with it however is much the same as with Atomize. RoomPriceGenie put a heavy focus on automation so though they might do the revenue management for you, you might find it tricky to manage them.
Best Revenue Management Software for small hotels
Truthfully, when it comes to RMS software for smaller hotels it really is all about what suits you. The small hotels with revenue teams working for them are few and far between. They will most likely not have as many room types to work with either, so as often as not a lot of the features they’ll be paying for with one of the bigger names will be of little or no use to them.
For smaller hotels, a good booking engine integrated with a nice few distribution channels and a decent PMS needs to be the priority, with a lot of the heavy RMS lifting being done by whatever their most highly functioning distribution channels are.
For hotels in this situation I’d say this – get to know RMS. Be a one person revenue team. Try the free RMS course over at The Hotel Club and following that – or preceding it – get over to Amenitiz for a free demo because we’ve recently launched the perfect middle-ground between complex automated software designed for big hotel chains and no RMS at all. It’s called SmartPricing by Amenitiz.
SmartPricing by Amenitiz is a price recommendation tool designed to simplify they process of reading demand signals and setting pricing strategies by simply suggesting a price based on your own past and future data.
It’s two biggest pros in terms of RMS are the fact that it suggests rather than automates – perfect for the hoteliers that like to stay in control – and that it integrates perfectly into the Amenitiz PMS, so there’s no jumping back and forth between softwares or complicated connection process.
Oh and there’s also the fact that it’s hooked up to your website, channel manager, booking engine and PMS and pulls data from all of those too. It’s well worth a look.
Free Revenue Management Software
When it comes to free software you will find here and there free solutions or free trial periods that attest to do what the big dogs do but for the grand total of zero.
Call me a cynic but in my experience if something is free you may well be the product. Don’t be taken in by the buzzword. There are versions of RMS that you can do that will cost you little more than the price of a book to study but there are no free software solutions worth your time that I have run into or if they are free they come in exchange for your data and deliver much more email spam than anything that resembles advice on RMS strategy.
Revenue management terms for hotels
For all my recommendations to get a little educated and steer clear of the big boy toys there’s one knowledge drop that I’d be remiss to leave out and that’s the jargon. Here are a list of terms to get familiar with before approaching the beast that is hotel revenue management.
Average Daily Rate (ADR)
The average rate achieved over a given period of time. Calculated by dividing revenue received by rooms sold.
See our article on ADR
Best Available Rate (BAR)
An indication that of all the places a room is available this is the best price anyone will find.
A group of competitors you set as a benchmark when assessing your property’s performance.
The process of maximising revenue by selling the same products to different customers at different prices.
Length of stay
The number of days a guest is staying on your property during one stay.
An unprofitable rate at which the hotel would be better of not selling the room at all.
OR (Occupancy Rate)
A measurement that indicates the number of rooms sold at a hotel in a given period, calculated by dividing number of rooms available by number of rooms sold.
RevPAR (Revenue Per Available Room)
Measures the average revenue contribution of each room, calculated by multiplying the OR by the ADR. A reliable measure of how well a hotel is utilising their resources.
See our article on RevPAR
24 Nov, 2022
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