Labour shortages. Supply chain disruptions. Inflation. Economic slowdowns. Today’s hotel owners and general managers (GMs) face numerous challenges, each of which causes a huge impact on your profitability.
- In uncertain times, how do you strategically manage prices?
- Can you generate extra revenue to offset higher costs?
- How can you maximise multiple revenue streams?
A revenue management system (RMS) helps illuminate the uncertainty amongst today’s complex challenges, letting you rethink revenue management and identify ways to improve your business results.
What is an RMS?
Put simply, an RMS is a technological tool to help hospitality professionals identify profitable opportunities through data-driven analytics – from head office management companies to on-site teams to price rooms, event spaces and ancillary services – for optimum profitability.
An RMS shifts the role of revenue managers from data entry and spreadsheet analysts to strategic, commercially-focused thinkers. It empowers hotel owners to play a central role in protecting, forecasting, and strengthening a hotel’s cash flow and overall financial position by enhancing the cash position of the asset.
From giving the hotel greater day-to-day liquidity and meeting operating cost requirements to having money in the bank for investments, the increased revenue and expected business performance insights provided by an RMS can’t be overlooked.
Not all RMS are created equal. There are serious differences in capability between solutions on the market – differences that could mean you maximise profit or that you miss out.
What solutions are available?
You can categorise revenue management solutions in three ways:
- Pricing tools: they will provide handy reports and support rate changes, but they are reactionary, meaning you’re always a step behind market forces. As ‘rules-based’ systems they require time-consuming manual updates, a task reliant on your staff having in-depth system knowledge.
- Revenue management system: integrating with your property management system (PMS), an RMS breaks down big data and delivers accurate and actionable insights. Those with advanced automation and flexible controls provide sophisticated analytics which maximise productivity, optimise your business mix, drive enhanced profitability, and help improve the guest experience.
- Connected technology ecosystem: an advanced RMS with a central hub that considers total revenue generated and costs incurred across all facets of your business. Capable of forecasting and measuring total profit from each guest versus each room, these advanced systems – such as IDeaS’ G3 RMS – integrate with your property’s existing technology stack to optimise profit across all revenue streams.
The best-in-market RMS’s automatically consider factors such as supply and demand, local events, and historical data, and set prices for any future activity to maximise your revenue across rooms, restaurants, spa and other outlets.
Benefits of an RMS to your business
An RMS is one of the best tools a hotel can have for maximising revenue and increasing efficiency. Organisations that use an RMS can experience the following benefits:
- 7 to 20% increase in RevPAR
- 20 to 40 hours of employee time saved per month
- 5.46% higher occupancy rate during high demand season
- 6.78% increase in average variance during seasons of low demand
- 2 to 7% increase in profit margins within 12 months of adoption
- 200 to 350% return on investment (ROI) for using an RMS
Make your upgrade worth the investment
Any level of automation will serve your organisation better than a manual spreadsheet. But to really make a difference, you need to make your upgrade worth the investment.
With over 30 years’ experience providing revenue management solutions and a 98% client retention rate, IDeaS’ latest evolution – G3 RMS – provides hotel owners and operators with:
- Versatile pricing: automatically finding the most profitable price point for you to sell at, even as conditions shift
- Remaining competitive under any circumstance
- Proactive forecasting: helping your business react quicker and more decisively.
- Reducing tedious tasks: G3 RMS can manage by exception, removing the need for staff to manually update rates across multiple selling systems.
- Maximising business mix: empower your sales teams with a group evaluation feature to efficiently decide what bookings are best for your business
The next step of your RMS journey
Revenue management systems are proven to make hospitality companies more money, while saving valuable time for the strategic thinkers within your organisation. An RMS is an antidote to today’s uncertain times.
Whether you are taking the first steps towards banishing manual spreadsheets or are updating an existing RMS, hotel owners and operators should seek a solution that helps maximise your investment, with features and benefits that use a scientific approach to amplify your bottom line.
To take the next step of your RMS journey, download IDeaS’ Ultimate Buyer’s Guide 2023, including a checklist of what to consider as you assess different RMS technology and suppliers. Find out more at ideas.com
