If you’re still relying on spreadsheets to conduct your revenue management strategy, it’s time to look at how technology can help you streamline processes to save time, earn more, and make better decisions.
Thankfully, revenue management technology has come a long way since its inception in the 1980s and can do a lot of the heavy lifting for lodging operators when it comes to analyzing real-time data, demand forecasting, and providing pricing suggestions.
Read on to learn everything you need to know about choosing a revenue management system, including key features and leading solutions.
What is a hotel revenue management system (RMS)?
A revenue management system is a comprehensive tool designed to help hotels manage various revenue tasks, including data management, pricing, inventory, and reporting. It uses a rules-based or analytics-based pricing algorithm that factors in internal and external data to recommend or update pricing and stay restrictions.
In a nutshell, a revenue management system provides data-backed suggestions so that hoteliers sell the right room, to the right guest, at the right price to maximize occupancy, total revenue, and profitability.
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How does modern hotel revenue management software work?
Typically, modern revenue management software analyzes historical, competitor, and market data in real time to calculate ideal room rates. The range of features available may vary widely, but thanks to recent developments in machine learning, automation, and AI, the technology is more accessible.
Some of the most notable RMS players in the space for dynamic pricing and data-driven decision-making collect internal, historical data via integrations with more hotel management tools such as the property management system (PMS) and channel manager, along with important external data that impacts demand, like seasonality, events, competitor rates, flight data, weather patterns, and the economy.
Why is a revenue management solution important to use?
Technology is becoming increasingly important across the hotel industry — here’s why RMS, in particular, is a crucial tool for hoteliers to have.
Competitive pricing
Demand post-pandemic has reached all-time highs, and price is now one of the main determining factors in a traveler’s purchase decision. An RMS is a game-changer to ensure you’re pricing competitively and discovering new revenue opportunities.
Rapidly changing market conditions
Back in the day, hoteliers could update rates on a weekly, monthly, or sometimes yearly basis and be fine. Today, the market is changing so rapidly that you need a dedicated system to constantly monitor market activities.
Accurately report on critical metrics
ADR, RevPAR, TRevPAR, GOPAR — these are just a few of the key financial metrics across hotel businesses. An RMS can help you track these KPIs, perform data analysis, and provide suggestions for improving performance.
Do more with less
Whether you have a dedicated revenue manager or not, manually conducting accurate forecasts and altering your pricing strategies requires a great deal of expertise and time. With an RMS, you can make more informed decisions fast, improving operational efficiency.
8 benefits of an RMS
Let’s break down the benefits of using a revenue management tool in the hospitality industry.
1. Complex calculations can be done quickly & accurately
RMS algorithms work around the clock to analyze data points and market trends based on real-time data.
Let’s face it — without an RMS, there can be times when we make pricing decisions based on a “gut feeling.” While these might work out sometimes, a quick check-in with your RMS to confirm will ensure consistent revenue streams through optimal pricing.
3. Maximize revenue
Your bottom line relies on how well you price your rooms. With an RMS, you’ll never miss out on the chance to optimize your room rates through automation and preset rules for ultimate revenue growth.
4. Expand the role of your revenue manager
Give your revenue manager the time and data needed for more strategic decision-making. An RMS can help hotel owners and revenue managers unlock insights that may have never been considered without technology.
5. Don’t have a revenue manager? No worries
An RMS can be a lifesaver for smaller, independent properties without a dedicated revenue manager. Most RMSs present data in a simple, straightforward fashion so that anyone on your team responsible for pricing hotel rooms can do so effectively.
6. Keep an eye on your competitors
Your day is busy enough without worrying about what the hotel next door is doing. An RMS provides insights into your competitive set to help guide any changes you may need to make at your property.
7. Improve the guest experience
Travelers want a fair price for their room type and value hotels that are strategic about their pricing. In addition, by streamlining tedious revenue management activities, your team will have more time to determine how to increase room revenue and direct bookings through ancillary services and value-added upsells.
8. Automate operations
Labor shortages are at an all-time high, with more than 79% of hotels unable to fill open positions. Revenue management is one area of operations that you can automate with an RMS to reduce the workload on your team. An RMS also helps ensure that hotels are conducting proper resource allocation and inventory management.
79%
of hotels are unable to fill open positions
Key features to look for in an RMS software
Various software solutions exist today, and your choice will depend on your property’s size, requirements, and budget. Here are a few key features you should look for when researching revenue management systems.
Automated rules and alerts
To minimize time spent in the system, look for an interactive RMS that can support preset rules, alerts, and workflows so that you don’t have to check your data and update rates manually. Specific rules and alerts can include (but aren’t limited to):
- Compset-based alerts: get alerted anytime there is an important shift in pricing (i.e., be alerted every time your compset pricing goes up by 10%)
- Occupancy-based alerts: get alerted when it’s time to update your rates based on your occupancy (i.e., increase your rates when your occupancy rises).
- Restriction-based rules: add restrictions that stop you from receiving new reservations (i.e., minimum length of stay).
Rate comparison functionality
Maintaining rate parity is crucial as travelers frequent metasearch websites to compare pricing across a hotel’s distribution channels. Your RMS should have rate comparison functionality that allows you to view your rates across your booking engine, online travel agency connections (OTAs), and against competitors.
Forecasting and pricing recommendations
Based on factors like market demand, historical data, and competitor pricing — your RMS should be able to forecast and provide pricing recommendations to ensure you always offer the right price at the right time. You should be able to assign the level of control your RMS has in implementing pricing decisions by setting rules where your price is automatically updated in certain instances, and in others, it must have your permission.
Comprehensive dashboard with key reports and insights
Data is of no use unless it can be analyzed and interpreted for decision-making. An RMS should provide key reports that offer an easily digestible snapshot of a hotel’s performance with the option to dig deeper into the data. Your RMS should give user-friendly insight into KPIs like RevPAR, TRevPAR, room nights sold, ADR, occupancy rate, booking sources, etc.
Integration with your tech stack
An RMS is not nearly as effective without proper integration with your channel manager, PMS, CRM, booking engine, and other apps. Your systems need to be in constant communication to update rates across channels, report on occupancy, see available rooms, and provide data for forecasting.
Cloud-based
Market demand is unpredictable and needs to be monitored in real time. Not only can you log in to monitor performance anywhere, any time, but a cloud-based RMS provides better connectivity between systems and channels and offers regular updates to maintain effectiveness.
A provider with 24/7 support
Your room rates are the lifeblood of your business and the number one revenue driver. If you have a problem with your RMS, you need a partner with customer support resources available at all times to help get you back on track.
The right tech makes a difference.
See what features & functionality to look for in your next RMS.
18 top revenue management systems
The key to a hotel’s profitability within the hospitality industry is effective revenue management. Say goodbye to spreadsheets and manual processes and look for a revenue management system to take your property’s revenue management strategy to the next level.
Here are 18 of the top revenue management systems on the market today.
Cloudbeds Revenue Intelligence
Cloudbeds Revenue Intelligence is a revenue management solution powered by our proprietary causal AI engine. Forecasting demand up to 90 days out with up to 95% accuracy, it automates pricing decisions using real-time data like market trends, competitor rates, local events, and occupancy shifts. The result: faster, smarter recommendations that adapt instantly to changing conditions and drive more revenue with less guesswork.
Forecast with up to 95% accuracy.
Move faster than ever before with Cloudbeds Revenue Intelligence.
BEONx
BEONx is a total profitability platform that goes beyond revenue management to total profitability. Their AI-driven platform makes it easy for hoteliers to shift from RevPAR to RevPAG, optimizing guest journeys and the bottom line.
Beyond
Beyond is a revenue management solution for short-term rental managers and owners. Its platform includes a dynamic-demand-driven pricing tool with extensive market data that pairs with OTA distribution channels and booking engines.
Diamo
Diamo is an intelligent, all-in-one automated hotel revenue management system that maximizes RevPAR, so hotels can run with ease.
FLYR
FLYR for Hospitality, an AI-powered decision and business intelligence suite, puts the power of machine learning and data science into the hands of managers.
Hotelitix
Hotelitix identifies revenue-generating opportunities in real-time, forecasting the exact price changes your hotel should be making to maximize performance.
IDeaS
Combining industry knowledge with innovative data analytics and AI, IDeaS creates sophisticated yet simple ways to empower hoteliers with precise, automated pricing they can trust.
Lighthouse is the leading commercial platform for the hospitality industry that transforms complexity into confidence with actionable market insights, business intelligence, and pricing tools that maximize revenue.
LodgIQ
LodgIQ is an adaptive revenue optimization platform that uses BigData Analytics and AI to forecast demand and price hotel rooms.
PriceLabs
PriceLabs is a revenue management solution that combines human control with automation and market data to maximize revenue. It uses automation rules and customizations to manage pricing and minimum-stay restrictions for larger portfolios to help property managers increase revenue.
Pricepoint
Pricepoint is a real-time price optimization engine that analyzes the market and updates room prices to keep you ahead of the curve and in front of competitors.
RateGenie
RateGenie aims to empower businesses with the data and insights needed to maximize their revenue through flexible and dynamic pricing strategies tailored to the needs of each property.
Rate Quantum
Rate Quantum is a revenue management system that uses science, AI, and the latest technology to determine the correct rates for your hotel.
RevControl
RevControl is a revenue management software that provides hoteliers with an intuitive platform to optimize revenue and deliver exceptional guest experiences.
Revolution Plus
Revolution Plus is a sophisticated revenue management system designed specifically for the hospitality industry. This AI-driven platform enhances your hotel’s sales and pricing strategies by analyzing extensive historical and real-time data from multiple sources.
RoomPriceGenie
RoomPriceGenie is the easiest way to ensure that your rooms are priced right every night. Purpose-built for the independent hotelier, RoomPriceGenie is fast to implement, intuitive to use, and simple to understand.
Smartpricing
Smartpricing is an RMS that manages the price of accommodation facilities and monitors hotel and market data. It uses smart algorithms to generate the most profitable rate based on current market demand, availability, and trends.
Turbosuite
Turbosuite is a revenue management system that covers revenue to account management to ensure the highest possible income to achieve economic sustainability in the hotel and vacation rental industry.
Final thoughts
Hotels of all shapes and sizes are getting more sophisticated in their revenue management capabilities. In 2023, we saw record-high RevPAR performance, part of which can be attributed to technology enabling hoteliers to price more effectively. Revenue management technology is pivotal in this day and age to make proactive, data-driven decisions to maximize revenue and profitability.
Built for hotels that demand more.
Put an end to expensive surprises with Cloudbeds Revenue Intelligence.
