What exactly is revenue management?
Revenue management is the practice of increasing a company's turnover. Specifically, it attempts to predict customer demand and behavior with the help of analyses. The ideal price is then determined on the basis of this prediction.
When calculating the ideal price, companies often take into account market factors, historical data, upcoming events and competitors' prices. The golden rule of revenue management is to sell the right product or service, at the right time, in the right place, at the right price, to the right customer group. The basis for this is a deep understanding of the target group and their willingness to pay.
Why is revenue management so important today?
The general conditions in the hotel industry have changed massively in recent years. Overall, the market has become much more complex and dynamic. New digital platforms such as Booking and Airbnb have noticeably increased competitive pressure. Guests compare prices faster and more comprehensively, which further increases the pressure on hotels to always offer competitive prices. At the same time, many hotels are facing falling demand and rising operating costs.
In order to survive in this difficult market environment, revenue management can be an indispensable tool. Through dynamic pricing, hotels can continuously adjust their prices to current market fluctuations and demand and thus optimize their revenue. Revenue management is therefore not just a strategic tool, but a necessity in order to remain competitive in the long term in a constantly changing industry.
What revenue management mistakes should you avoid?
Even though revenue management is becoming increasingly important in many hotels, typical mistakes still occur frequently. These mistakes often cost hotels significant revenue and prevent them from making optimal use of their potential. For example, it can be observed that hotels often rely on their gut feeling when adjusting their room rates. Although some do base their prices on those of their competitors, this can have fatal consequences without a clear pricing strategy of their own. Because if the competition does not pursue a sound strategy either, you run the risk of offering your rooms at an unfavorable price.
Another major problem is that many hotels still adjust their prices manually. This not only costs an enormous amount of time, but often leads to delayed or inaccurate price changes, which in turn can lead to a loss of revenue. Effective revenue management, however, requires constant price adjustments based on real-time data - a task that is almost impossible to accomplish manually.
How a revenue management software (RMS) gives your hotel a big advantage
As was made clear in the previous chapter, many mistakes can be made in revenue management. These are often due to a lack of data evaluation and analysis options. Many PMS and channel managers usually only support basic analysis functions and are not designed for revenue management. The solution: revenue management software. Such software can help you to simplify or even automate the adjustment of your prices enormously. At the same time, extensive amounts of data flow into the calculation of prices. This ensures that your rooms are optimally priced at all times based on the latest market data. With extensive analysis and data evaluations, you also have the opportunity to track the development of your hotel key figures in real time.
Cloud revenue management systems on the rise
In the past, revenue management was mostly reserved for large hotels due to expensive, complex systems. Thanks to cloud-based solutions, revenue management has now also found its way into the small and medium-sized hotel industry. These systems are characterized in particular by their high level of user-friendliness and low costs. They are therefore also suitable for hotels with little revenue management experience. They are also very easy to connect to existing PMS systems.
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This is what you should consider when choosing your
revenue management software
Different RMS for different needs
Choosing the right revenue management system (RMS) can have a major impact on the success of your hotel. At the same time, the requirements for a revenue management system can vary greatly depending on the type and size of the business.
While competitor analysis and event import are usually highly relevant for city hotels, completely different factors are often important for serviced apartments. This can be, for example, automated price adjustment or the ability to set restrictions. Vacation hotels also sometimes have completely different expectations of a revenue management system. When selecting an RMS, it is therefore important to decide on an RMS that is tailored as closely as possible to your own needs. In other words, it should contain the factors and functions that generate the most benefit and revenue for the hotel. This will ensure that your hotel does not have to adapt to the software and that it provides you with optimal revenue management support.
These are the minimum requirements your RMS should provide
Even though the requirements for an RMS vary from hotel to hotel, there are some important criteria that every system should fulfill.
One of the most important factors is the ability to integrate with your PMS. Only if this is given can the RMS be used at all. So make sure that there is an interface to your PMS for the RMS. If you are not sure, it is best to ask the RMS provider directly. Another important criterion is the highest possible degree of automation. An RMS should simplify working with dynamic prices. At the same time, price adjustments should be based on a good database. In this context, many RMS providers offer an autopilot function that adjusts prices in real time. The RMS should also fulfill the criterion of being highly user-friendly. Intuitive software requires less training and enables easier work and fewer errors.
The software should also have a certain degree of adaptability and scalability. The framework conditions for your hotel and hotel industry can change and require new solutions. In this context, the continuous further development of the software also plays an important role. Finally, the application should ensure that you have an overview of the development of your key figures at all times through transparent reporting and analysis.
Revolutionize your revenue management with happyhotel
Are you looking for a revenue management system that can be tailored exactly to the needs of your hotel? happyhotel makes your revenue management easier, more efficient and more profitable — even if you have no previous experience.
That's what happyhotel offers you:
- Dynamic pricing: Automatic adjustment of prices in real time thanks to our autopilot — quickly, precisely and based on data.
- Ease of use: Intuitive interface that doesn't require lengthy training courses — start right away!
- Clear reports: Transparent analyses and evaluations. This way, you always have an overview of your key figures.
Make your hotel fit for the future
Since the number of rooms is limited, the hotel has a value that is limited and should therefore be used optimally. Things like customer satisfaction and price levels are factors that strongly influence marketing and revenue management. Therefore, a precise analysis of demand and forecasting of capacities ensures perfect pricing.
and convince yourself
Forget manual price adjustments. With happyhotel, you can maximize your income without constantly checking prices.
