Today, revenue management, as a practice, has assumed a more prominent role in hotel operations. Driven by the desire to boost their hotels’ top line in the competitive market, hotels across categories are increasingly adopting cloud-based and AI-powered revenue management solutions. Today’s blog will look at various aspects of revenue management software. Most importantly, we will explore if it is enough to implement a revenue management system and forget thinking the solution will do the rest. Or do you still need a human revenue manager to see more out of your technology investment?
But before we get into the details, let’s refresh our minds with some of the Revenue Management System (RMS) essential basics.
What is a revenue management system?
Also popularly referred to as an RMS, it helps you with effective distribution and strategic pricing strategy and allows you to sell the right room to the right guest at the right price and time to boost revenues. Not only this, it considers your property’s amenities, online ratings, F&B along with your area’s seasonality, guest influx, demand, competition pricing and many other aspects to suggest the correct room rate that could fetch more RevPAR.
The power of cloud-based and AI-powered RMS
Like an on-premises Hotel PMS, which is no longer an option for 360-degree hotel operations, a legacy revenue management system is no longer desirable for your hotel’s revenue growth. It is marred with delayed data processing, leading to conflicting and inconsistent information on your inventories.
Today’s AI-powered RMS intends to help you boost your net revenue instead of the legacy version that focuses only on your occupancy level. It automates some of the critical aspects – inventory management, room pricing, and rate distribution. It also ensures dynamic and flexible pricing and considers all revenue streams of your property.
Can the process of revenue management be completely humanless?
It is the same old question – technology vs human intelligence. There is no doubt that the revenue management system is a highly sophisticated and efficient tool. It automates and processes the required data set to make rate recommendations. But it would help if you still leveraged the expertise of a human revenue manager to witness the desired results. With their deep understanding of hotel revenue management techniques, they can put the RMS to optimal use.
A hotel revenue manager uses his analytical skills plus, considers the recommendations suggested by the RMS, and sets the room rates to maximise profitability. Here are a few of the critical tasks that only a revenue manager can accomplish:
- Producing reports based on several KPIs
- Analysing the monthly performance report and providing a summary report
- Keeping an eye on a periodic forecast and expected results
- Tracking market segment and business source contribution
- Working with OTAs for better distribution opportunity
- Monitoring multiple reservation sources – OTAs, GDSs, metasearch engines, walk-ins, and your direct booking coming via the website
- Monitoring overbooking, double-booking, and cancellations
- Closely following market trends and keeping an eye on competitors
- Configuring rates for special packages as per the guest type and length of stay
- Executing plans to ensure more upselling along with other non-room items
- Keeping an eye on corporate accounts
- Helping grow your hotel’s online reputation and ratings
- Configuring and recommending long-term revenue strategies
RMS + Revenue Manager: The need of the hour
Why? Because there’s always a human intelligence that powers the software’s output. At the same time, a revenue management system cannot consider and process probabilities. However, an adept revenue manager can use his year-long on-the-job learning to mix and match many elements and the automated output of the RMS for the best possible financial outcomes. And the best part is that – a seasoned revenue manager understands the power of technology. So, it always works better for you if you have both – an RMS and a revenue manager.
Now having both could be a costly affair. First, you have to spend around Rs 5000 to Rs 6000 per month on the software. Second, you have to hire a revenue manager with at least five years of experience at a monthly salary of around Rs 50,000. However, AxisRooms can help you address this issue with its all-new offering – Revenue Management Service. In this, AxisRooms will provide you with a dedicated revenue manager who will work closely with you to amplify your revenue management efforts. You don’t have to worry about the fat monthly/annual pay-out for it as you could avail this off for Rs. 4999 per month. Is it not financially viable to have a skilful revenue manager behind your RMS to care for your revenues and profitability?