If data is the life blood of your hotel, then your revenue management system (RMS) is a crucial part of its brain and cardiovascular system. A complete revenue optimization solution retains and recalls relevant data needed to create an accurate pricing strategy, and when well-integrated, facilitates the flow of strategic information across every area of your enterprise.
Use this checklist as a guide for identifying the top 10 RMS features you need for optimal hotel operations and profitability.
ACCURATE FORECASTING: Your RMS must create supply and demand forecasts that factor in constantly changing variables such as events (holdiays, city-wide, weather-related, etc.), seasonal cycles, historical patterns, marketing promotions, and more. It should be capable of running multiple simulations and optimization cycles that predict a range of possible demand outcomes each day. If the system is truly running an accurate forecast it can adjust pricing in real-time based on demand changes, because it has already taken the possible range of values into account
COMMUNICATION WITH PMS IN REAL TIME: It’s essential that your RMS and PMS are seamlessly integrated so that reservation activity, forecasted occupancy, competitor pricing changes, and inventory updates are viewable in real time.
OPTIMIZED RATES BY ROOM TYPE: A state-of-the-art system produces optimal pricing at the room type level; accounting for unconstrained demand, revenue forecast, price sensitivity, competitive rates, and room upgrade opportunities. It also provides optimal room type pricing based on booking velocity and occupancy, while allowing for room upgrades that may occur at check-in.
OPTIMIZED RATES: Rate recommendations are not truly optimized unless they consider demand by length of stay and include guest value for each day of the stay. The rates should reflect the optimal minimum length of stay for future arrival dates and your system should be able to restrict shorter length of stays if necessary.
TOTAL GUEST VALUE: The ability to identify your most valuable guests and optimal channel mix opens new doors into how you can optimize pricing. To maximize profitability, hotels must include ALL revenue streams – food and beverage, spa, golf, retail, etc. – in addition to room revenue in their forecasting and optimization process. Casino resorts have been ahead of the curve when it comes to accurately tracking their guests’ on-property spend. Traditional hotels, on the other hand, have a huge opportunity ahead of them as this has been difficult to achieve largely because of technology.
SCIENCE BASED APPROACH: Rules-based systems require configuration by the end user to be able to react to market and demand shifts. This methodology is ineffective when dealing with the abundance of data that hoteliers utilize today. It also lacks the agility to dynamically react to what’s happening in the marketplace. A science-based system accounts for multiple factors including seasonality, market conditions, competitive pricing, shopping behavior, and pricing elasticity. It improves pricing, yielding, and forecasting accuracy by accounting for each segment’s willingness to pay.
BUSINESS INTELLIGENCE & REPORTING: An integrated BI tool includes robust analytic and diagnostic capabilities. It aggregates information from all your systems and delivers actionable insights in comprehensive, easy-to-understand reports (in minutes versus hours or even days). Every team member can use that information to make critical, timely decisions across your entire portfolio in order to drive continuous performance improvement.
COLLABORATION: Eliminate silos! In addition to integrating with your PMS, it’s essential for your solution to consistently communicate with your CRS, so that all your teams are aligned and working with a single source of truth. They can then execute on a much more confident basis with regard to pricing and revenue optimization strategy.
CLOUD-BASED PLATFORM: You need a customizable, easy-to-use, cloud-based platform that’s accessible from anywhere. This eliminates the need for ongoing maintenance fees and downtime for software upgrades. It also enhances cybersecurity and improves operational efficiency, giving your executive team the flexibility to manage schedules and resources at any time from anywhere.
TRAINING & SUPPORT: The team behind your solution should offer extensive training and support before, during, and after deployment. They must be willing to partner with you over the long haul. Ensuring that you are achieving the maximum benefits of a solution that has been proven through all market cycles.
It’s worth repeating that for optimal results you need seamless technology integration. It’s the glue that holds it all together, keeping your entire team in sync and working toward the same clearly defined goal. Above and beyond this, however, remember it’s all about the guest. The ultimate goal is investing in the right technology for improving your overall guest experience.