Before contracting a hotel revenue management software, pay attention to these details
Selecting revenue management software (RMS) is a crucial decision for any hotel looking to maximise revenue and stay competitive in a dynamic marketplace. Beyond simply managing rates, an RMS can revolutionise the way your hotel operates by automating tasks, optimising pricing and ensuring that every room is sold at the best possible price.
Before making a decision, it is essential to understand the benefits that an RMS can offer and ensure that the solution you choose is tailored to your specific business needs. In this article, we guide you through the key concepts and strategies for making the most of this technology.
What is Revenue Management Software Hotel?
A Revenue Management Software is an advanced technological tool that allows hotels to optimise their room rates using complex algorithms and real-time data. This system takes into account factors such as demand, competition, future bookings and market trends to dynamically adjust rates.
Key characteristics of an RMS:
- Price automation: Automatically adjusts rates according to market fluctuations.
- Predictive analytics: Anticipate occupancy patterns to maximise profitability.
- Multi-channel optimisation: Ensures consistency of fares across OTAs, direct bookings and other channels.
What is the "general" formula for calculating RMS?
Although the algorithms used in an RMS are advanced, there are basic principles that explain how it works:
- RevPAR (Revenue per Available Room): This key indicator measures the revenue generated per available room.
- Formula: RevPAR = ADR (Average Daily Rate) x Occupancy Rate.
- ADR (Average Daily Rate): Reflects the average price per occupied room.
- Formula: ADR = Total revenue per room / Occupied rooms.
Key factors in the formula:
- Current and projected occupancy: It helps to identify periods of high and low demand.
- Market trends: Consider local events, peak seasons and changes in customer behaviour.
- Customer segmentation: Adjust prices according to guest profiles and preferences.
Case study: If a hotel detects that a weekend coincides with a local concert, the RMS will automatically increase rates by predicting high demand, thus optimising revenue.
How does it benefit your hotel to have customised revenue software?
Customised revenue management software is designed to meet the specific needs of your hotel, making it a powerful tool for maximising results. Here are some of the key benefits:
Real-time price optimisation
A customised RMS adjusts tariffs on an ongoing basis, ensuring that they are always competitive and reflect market conditions.
Example: If an OTA reduces its rates at a competing hotel, the RMS can adjust your prices to remain competitive.
Data analysis and forecasting
Data is the heart of an RMS. A customised system provides detailed reports that enable managers to make informed decisions.
Example: Predictive analytics can show a decrease in bookings for a given month, allowing the hotel to implement promotions in advance.
Integration with other platforms
A customised RMS integrates with property management systems (PMS), distribution channels and marketing tools, improving operational efficiency.
What are the main features of hotel revenue management software?
Hotel revenue management systems (RMS) are advanced tools designed to maximise revenue and improve operational efficiency. The latest RMSs combine technology, data analytics and automation to optimise every aspect of revenue management. Here are the essential features that make these systems a must-have for hotel success:
Dynamic price automation
Eliminates the need for manual adjustments by constantly analysing market, demand and occupancy data. This allows fares to be automatically updated to reflect changing conditions in real time.
- Key advantage: It ensures that each room is sold at the most profitable price, maximising revenue without manual intervention.
- Practical example: During a weekend with high demand, the RMS may automatically increase fares when it detects an increase in bookings.
Market trend analysis
An advanced RMS collects and analyses large volumes of market data, identifying patterns and revenue opportunities.
- What it does: It studies customer behaviour, competitor performance and seasonal fluctuations.
- Benefit: It enables informed decisions on tariffs, promotions and distribution strategies.
- Case study: Detect a pattern of advance bookings during a local event and adjust prices to capture peak demand.
Multi-channel distribution optimisation
The RMS ensures that rates are consistent and competitive across all distribution channels, such as OTAs, GDS and the hotel website.
- What it solves: Avoid rate discrepancies and improve inventory visibility across key channels.
- Impact: Increase direct bookings while maintaining a strategic relationship with OTAs.
- Council: Combine this optimisation with loyalty strategies to maximise direct bookings.
Room inventory management
An RMS allows rooms to be allocated strategically, ensuring that available inventory is used efficiently to maximise occupancy and revenue.
- How it works: Monitors availability and adapts strategy to minimise empty rooms during periods of low demand.
- Example: Book cheaper rooms during low occupancy periods to attract customers while leaving premium rooms available for high demand days.
Demand forecasts and alerts
An RMS uses predictive algorithms to anticipate changes in demand and alert the team to potential opportunities or risks.
- What it provides: Real-time information on possible increases or decreases in stocks.
- Added value: It allows you to implement strategies in good time, such as early promotions or fare adjustments.
- Innovation: The most advanced RMSs incorporate artificial intelligence to improve forecast accuracy.
Customer segmentation and price personalisation
An effective RMS segments customers according to their behaviour, booking history and preferences, offering personalised rates.
- What an impact: Improve customer experience and increase conversion by offering prices that reflect their perceived value.
- Example: Provide exclusive discounts for frequent customers or higher prices for last minute bookings in premium rooms.
Detailed reports and dashboards
RMS provides clear and comprehensive reporting on key metrics such as revenue, occupancy and performance by channel.
- Benefit: It facilitates strategic decision-making by providing accessible and easy-to-interpret data.
- Case study: Identify underperforming channels and adjust distribution strategy to improve results.
Lean Hotel System differentiator
Lean Hotel System distinguishes itself in the market by its ability to seamlessly integrate with other systems such as RMS and its highly customised approach. This means that Lean offers:
- Adaptability: It is tailored to the specific needs of each hotel, whether it is a small boutique establishment or a large chain.
- Centralised management: It allows efficient monitoring of all operations for the management of reservations.
- Real-time support: It accompanies the equipment with upgrades and ongoing technical support.
With Lean Hotel System, hotels not only optimise their revenue, but also simplify their operation, offering a strategic and efficient approach to revenue management.
What are the trends in MSY for 2025?
Revenue management is evolving rapidly, adopting new technologies to meet the challenges of the future. Here are some of the most promising trends:
- Artificial Intelligence (AI): AI enables more accurate predictions and fully automated pricing strategies.
- Advanced automation: Systems will be able to adjust tariffs and manage inventories without human intervention.
- Sustainability analysis: Tariffs will be optimised not only for revenue, but also for environmental impact.
Which KPIs can I improve by using the Lean Hotel System PMS integrated with an RMS?
Implementing a hotel management system (PMS) as a Lean Hotel Systemintegrated with a revenue management system (RMS), transforms the way your hotel's revenue is managed. This integration not only automates key tasks, but also enables significant optimisation of key performance indicators (KPIs). Below, we take a closer look at how each KPI improves and what impact it can have on the profitability of your business.
If you want to know more about KPI's read this other one article