North America holds the highest market share in the revenue management market. Firms across these countries are adopting cloud-based revenue management solutions, further driving the market share.
What is hotel revenue management? Hotel Revenue Management is essential for any hotel owner who wants to run a successful business. The importance of revenue management is irreplaceable in the hotel sector. One must manage the bottom line to ensure profits for the hotel to survive. However, because there are so many myths about hotel revenue management solutions, many hotel owners continue to hold off on executing them. We are here to prove all these myths wrong.
Are you considering shifting to a new, better revenue management system (RMS) for your hotel? But, do you have some doubts? Maybe you think that:
1. It’s too costly to install a new RMS for your hotel.
2. Your hotel staff will take more time to learn the new RMS.
3. The new RMS will take far too long to set the prices correctly.
4. It’s easy to stick to the RMS you are already familiar with.
It’s plausible if you worry about the issues mentioned above. But the truth is that these worries are based on common myths. Don’t let these myths prevent you from switching to more effective, practical revenue management systems. Keep reading for the best revenue management company in India.
Image credit – Skift research
Key Statistics
1. Skift Research analysis shows that only 28% of hotels use RMS tools.
2. Revenue management tools have been credited for a 3–7% revenue increase in the airline, hotel, and car rental industries.
3. The impact of underestimating demand by 12.5–25% can hurt revenues by 1–3% on high.
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What are Revenue Management Solutions & Systems?
Revenue management solutions and systems are tools and strategies used by hotels to optimize their revenue and profits. RM uses AI and ML tech to help hotels make informed decisions about price, inventory, and more.
How much of an impact will a hotel RMS have daily? These solutions provide insights into consumer demand and behavior, that help hotels to adjust their price and inventory in real-time. They help hotels by giving access to many OTAs as well. It ensures that rooms are being sold at the best rates across all platforms. These solutions also assist hotels with forecasting as well as provide insights into marketing and sales strategies.
[Suggested Read: 9 Best Forecasting Tips for your Revenue Management Strategy]
By leveraging data and analytics, your hotels can stay ahead of their rivals. Are you looking to add a hotel RMS? The real reasons hotels are so doubtful about hotel revenue management solutions and systems are the myths that are spiraling. To make your life easy, we have decided to clarify a few myths about revenue management solutions and systems. Searching for the best hotel revenue management software? Click below.
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Clearing 9 Myths About Hotel Revenue Management Solutions & Systems
We already know what is revenue management in hotels and why is revenue management importan. There are many revenue management benefits as well. Now, we’ll go over a few common myths so you’ll know what to watch out for and be confident about using revenue management solutions. It will also help you make the best switch to a better hotel RMS.
Read the Case Studies with Best Revenue Management Strategy
1. Revenue managers will become redundant due to automation
With the rate at which automation is taking over the hospitality industry, many people think that the jobs of revenue managers would be at risk. That’s just one of the myths about hotel revenue management solutions. But, many hotels rely on revenue management software. It makes revenue managers’ jobs much more efficient by reducing manual tasks.
Without the analysis and decision-making skills of revenue managers, it will be hard for hotels to benefit the most from these solutions. So, sit back and relax as revenue managers aren’t going anywhere.
2. Revenue management solutions are only for big hotels & math experts
These solutions can be used by hotels of all sizes, from small to large resorts. In fact, small hotels may benefit even more from RM, as they have fewer resources to dedicate to managing revenue.
These solutions can be customized to fit the specific needs of all types of hotels. From budget hotels to luxury resorts, it can be even more effective when aligned with the hotel’s goals.
Many believe that a person with strong expertise in math should be in charge of matters like pricing, revenue, or budgeting. However, hotels prefer to hire revenue managers who have a grasp of hotel metrics and analytical thinking.
3. Revenue management systems are costly and complex
While some revenue management solutions and systems may come with a high price tag, there are also cheaper options. In addition, the ROI from using it can outweigh the cost in the long run.
Modern revenue management solutions are designed to be user-friendly and easy to use. Many come with intuitive interfaces and even offer training and support to help hotel staff get up to speed quickly.
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4. Forecasting & budgeting are not crucial in revenue management
Budgeting and demand forecasting are vital parts of pricing and revenue management. And if someone has given you advice to the contrary, disregard it as it is one of the common myths. Demand forecasting enables revenue managers to forecast future guest demand over a period. While hotel budgeting helps in estimating revenue and expenses.
For a smooth and profitable working of a hotel, these functions need to go hand-in-hand. It is simple to make decisions about your hotel when you have this data.
5. Outsourcing revenue management services is not useful
These services can be beneficial year-round, helping hotels make data-driven decisions about price, inventory, and more even during slow seasons. RM is crucial during off-peak times when hotels may need to work harder to attract guests.
It is an ongoing process and revenue management solutions need to be adjusted from time to time to remain effective. As the hotels review data and adjust strategies, they can optimize revenue and stay ahead of their rivals in the dynamic market. These services are surely worth it. Just make sure that the service provider has a proven track record.
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6. Never overbook your hotel
Overbooking can make or break a hotel. Calling overbooking a curse is a huge myth in RM. What is a hotel looking for? Complete occupancy and increased revenue. It will greatly help you in achieving these goals if used carefully and with good planning and analysis.
If you’re not familiar with overbooking, it’s a tactic revenue managers use to encourage more bookings than there are rooms to maximize occupancy rates.
7. Price changes must be handled by revenue managers
Similar to those who believe that revenue managers’ jobs will be wiped out by automation, there is a second group of people who believe that price changes cannot be automated.
A revenue manager can’t log into different channels and adjust prices all day long. Because of this, there are automated revenue management systems that work and free up the revenue manager to focus on more crucial tasks.
8. Hotels in losses should not use revenue management solutions
Why would you choose to spend money on revenue management strategies or service if your hotel is at loss? Bringing you money is the main job of a revenue manager or revenue management service provider. Are you wondering how you would pay for such services now? Many service providers offer you a trial period to evaluate their products. You can choose them at any time.
But not only that. A lot of service providers only accept payment after they achieve their goals. So, if you’re having trouble making upfront payments, keep an eye out for these service providers.
9. Hotels that are being built should not think about revenue management
Your hotel is still being built? You can still choose the revenue management concept. Many hotel owners decide to use services like revenue management after their hotel has opened for business. That shouldn’t be the case, though. A hotel must be ready from the start. And revenue management for the hospitality industry helps you in this.
While your hotel is being built, you can leverage it. You can learn about the market segment, and sales strategies, carry out a complete analysis, work on pricing, and much more. And when revenue is recognised, you can thank us because revenue management is based on the principle of maximizing revenue.
Looking for revenue management companies for hotels or revenue management hotel examples? Read till the end.
[Suggested Read: Top 10 Strategies to Increase Hotel RevPAR All Year Round]
Outsourcing Hotel Revenue Management Solutions for Success
Over time, the value of revenue management in the hotel industry has become supreme. There are many benefits of revenue management. Today, a huge number of hotels rely on it to increase their revenue. Why not? It is a smart move for hotels looking to improve their revenue and profits while reducing costs and gaining access to expertise. It can provide hotels with a competitive edge and the ability to adapt quickly to changing market conditions.
However, there are some myths about revenue management solutions that have led to some negative views about it. We hope this blog changes your mind. And if your hotel hasn’t already used it, we urge you to revisit your decision. Many other myths need to be cleared.
Whether you are looking for revenue management solutions or dynamic pricing strategies, we can help. Do you have questions like what management consultants do? Contact Revnomix, one of the best hotel revenue management companies in India to capture more bookings and increase hotel revenue.
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9 Common Myths About Hotel Revenue Management Solutions
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There are so many myths about hotel revenue management solutions but Revnomix is here to prove all these myths wrong. Contact us to increase hotel revenue.
