Phil Benson discovers the importance of robust Revenue Management Systems in the current economic climate.
As the hotel and hospitality industry prepares for uncertain times, it is as important as ever for hoteliers to ensure they are optimising their long-term profitability. This means increasing rates during busy times and dropping them in slower periods to ensure occupancy is maintained.
Revenue management can be complex, but rewarding. However, it does need the entire organisation behind the strategy steering a successful system. A correct Revenue Management system will not only drive added revenue but also increase profits.
This has led to a growth in Revenue Management Systems in the hotel industry, which many believe can support increased profitability by using the systems’ marketing tools and techniques.
To be truly effective, however, these systems need to be fully integrated into the property’s existing technology – especially the PMS.
“A lack of two-way integration means additional employee time spent on manual data entry and, more importantly, often results in lost or inaccurate reservations, at financial and reputational cost to the hotel,” explained EZYield director of partner integrations, Jeremy Noone.
“An integrated automated solution allows you to manage rates, availability and inventory from your CRS or PMS, and returns resulting reservation data from the various channels directly back into these systems, with no need for additional data entry.”
This has led to added competition between Revenue Management software providers as hotels compete to advertise and offer the best possible service whilst still trying to maintain prosperity.
One of the leading providers of pricing and revenue management software, services and consulting, IDeaS Revenue Solutions, recently launched their latest version of the IDeaS Revenue Management System Version 6.0, which has a number of added and enhanced features. These include a new marketing campaign functionality that will help hotels to improve their processes for forecasting and optimising revenue.
Marketing campaigns are one of the fundamental ways for hotels to create demand and impact significantly on revenue forecasts. Being able to recognise when and where demand is coming from is vital, so IDeaS Revenue Management Systems version 6.0 allows revenue managers to get a more accurate forecast about the volume of demand that a marketing campaign can stimulate, which will help in their decision making going forward.
Being able to tighten the gap between human prediction and technology is something that this new functionality will help with and is an important collaborative move, which in the past, procedures and revenue management systems have struggled to control.
Improving revenue by managing advanced bookings is another development and has been introduced by one chain of hotels in London, who saw an increase in these types of advanced bookings thanks to the upcoming London 2012 Olympics, Paralympics and Diamond Jubilee celebrations.
Brook Hotels, which has 21 properties, has introduced channel management technology across 12 of its primary locations. Through launching this technology within its Sales and Marketing department, the hotel chain hopes to gain greater control of their future bookings.
One of the benefits of a reliable channel management system is for it to support dynamic pricing strategies quickly and effectively. There is also a need for the system to provide a two-way integration between a Property Management System (PMS) and Central Reservation System (CRS).
Having an integrated and automated solution allows revenue managers to manage rates, availability and inventory from the PMS or CRS, returning reservation data from a number of channels directly back to the systems.
Not using this technology may lead to additional employee time spent carrying out manual data entry, which can result in lost or inaccurate reservations at a major cost to the hotel both financially and from a reputation perspective, something all hoteliers are desperate to avoid.