So, you heard about revenue management? Wondered why everybody is talking about it? Asking yourself if you should implement a revenue management software to support your daily hotel business?
5 reasons for a revenue management system
We picked out 5 good reasons ‘Why to start with a Revenue Management System’ at your hotel.
Generate more revenue
The term itself already tells what it is all about. Roughly, revenue management is about revenue and how it can be increased.
Generally, revenue management used in the hospitality industry has been shown to increase revenue by 2 to 10 percent. For the hotels working with RateBoard they have a yearly growth of 8 percent in revenue on average.
Of course, to generate more revenue is the overall goal but let’s also look into the other reasons why revenue management should be implemented and how essential they are to achieve the goal of more revenue and why a revenue management software makes it easier.
Manage your demand
All hotels, big and small, benefit from recognizing the demand it had in the past, the present demand and the demand which is yet to come. Doing so enables setting the right price, for the right guest, at the right time, by the right distribution channel.
Hotels must know how the difference in rate is affecting their ability to convert the demand available to them, based on future arrival periods.
Future guest demand is the key to knowing if a hotel should hold, raise or lower rates. By understanding the dates when future demand is strong and there is a high volume of travelers competing for a limited number of rooms, hotels can maintain rate with confidence. But if the data of future demand shows a downward trend compared to last year, last month, or any period you define, a hotel can benefit by being the first mover on reducing price. With the tool ‘rate calendar’ RateBoard gives suggestions on how to best adjust the daily rate for each room category, every single day.
As said, demand forecast is an estimate of expected consumer demand in a specific period. A business uses demand forecasting in revenue management to predict the times throughout the year when consumer demand rises and falls, and according to this adjusts the rates. Forecasting revenue is critical in any business model. In addition, forecasting allows operation teams to plan goals and budget.
Forecasting and planning provides Sales and Marketing team opportunities to strategize and attack holes in the business throughout the year. If the business was budgeted to be strong for a certain period, and the result is coming up short of expectations, your Sales and Marketing team can proactively deploy campaigns to fill the periods of need, thus increasing the opportunity to bring in revenue. This type of analyses could be difficult to do, considering it takes so many aspects into consideration: sales records from previous years, study of the current market, consideration of prevailing economic conditions and the performance of market competitors.
Therefore, the best thing to do is to work with a revenue management system. RateBoard is capable to collect all the data and make a prevision of booking based on a scientific method.
Understand your guests booking behaviour
Throughout all the analysis needed for a revenue management Strategy, the hotelier will better understand his customers booking behavior. How early they book, which kind of room and for what rates. All this information together with the analysis of the pick-up and the peak nights will make it easier to set the right Length of Stay.
Also, a better understanding will simplify the process of accepting groups under the right conditions, at the right price, over the best set of dates.
RateBoard, our last generation revenue management system, makes this kind of decision a lot easier. Functions like Pick-up figure, booking curve are able to assemble your data and show them for a very useful reading, both from a numerical and graphical prospective.
Achieve set goals
All the data in your possession will help you to set smart goals for your hotel in terms of Budget, future rates, future pace and Brand reputation. Also, you will be able to constantly have a look on what you set and what you have achieved. In this way, it will always be possible to correct your route and make adjustments in order to lead your hotel to the arrival point! Take a look to the function “Budget” in RateBoard to discover how your booking situation is compared to last year.
With the cloud base revenue management system from RateBoard there is no hassle to install another software on your computer as it is an easy internet accessible system. RateBoard is connected with your PMS and has all the analytical tools to support your revenue goals.
Still asking why you need it? We just gave you a handful of reasons and our Head of revenue management can give you more. Just contact us.