Make the right decision when selecting a revenue management system for your hotel
Revenue management software is a digital tool designed for the hospitality industry to optimise room rates based on predicted demand. It uses data analytics to forecast hotel room demand, allowing hoteliers to adjust prices accordingly to maximise revenue. This dynamic pricing strategy takes into account various factors, such as seasonal demand, local events, competitor prices, and historical data, to set the optimal room rate at any given time.
The primary goal of revenue management software is to sell the right room to the right customer at the right time for the right price. By doing so, it helps hotels increase their Revenue Per Available Room (RevPAR) and overall profitability. In an industry where room rates can fluctuate frequently based on external and internal factors, having a system that can quickly and accurately adjust prices can be a game-changer.
Choosing the right revenue management software, like SiteMinder, can be a transformative decision for a hotel’s bottom line. This page will guide you through the essential considerations when evaluating potential technology partners, ensuring you make a choice that aligns with your hotel’s needs and goals.
Revenue management software is an indispensable tool for modern hotels, streamlining various crucial aspects of hotel operations. By analysing factors like market demand, competitor prices, and local events, the software optimises room pricing, ensuring neither underpricing nor overpricing. It offers real-time updates to adapt to the dynamic nature of the hotel industry and integrates seamlessly with other hotel systems, creating a unified operational platform.
Furthermore, it aids in forecasting future room demand, efficiently managing inventory across distribution channels, and providing in-depth performance analytics. This not only enhances the guest experience by anticipating busy periods but also significantly boosts profitability.
In a competitive landscape, such software not only automates manual tasks, reducing errors, but also ensures hotels stay ahead of their competitors by quickly responding to market changes.
If you’ve decided to purchase hotel revenue management software, you’ve really only started your journey. Understanding what the software is and the benefits it provides is the easy part. Now you’ve covered that, there is plenty to do in regards to making a final purchase decision.
Choosing the best provider for your individual property and business case means a lot of research is required to sift through the many options on the market.
We could tell you the obvious course of action is to move forward with an established industry leader like SiteMinder but no one should make a blind choice when investing in such critical software that’s going to impact the success of a business.
There is no shortage of hotel revenue management software that could suit your needs. Some will present very similar offerings, while others will work in more specialised or niche territory.
For example, some will be based largely around rate setting and some may focus specifically on revenue strategies related to food and beverage services. It’s a broad sector of hotel technology, meaning you have to be especially clear about what you want and what results you expect from a provider.
An easy example to give is SiteMinder’s hotel business intelligence software, which enables you to understand the local market and your competitors, and set rates to deliver the maximum amount of revenue to your property. This is regarded as a rate shopping and market intelligence tool.
SiteMinder has decades of industry experience and more than 47,000 hotel customers, pioneering some of the most powerful hotel technology solutions that exist today.
Revenue management tools consist of a broad range of products. They can serve many different purposes and be suited to a whole spectrum of properties.
This might include:
That’s why it’s very important to clearly understand what you want for your property. You don’t want to make the mistake of using the wrong tool or buying one that doesn’t include all functions you need.
Some of the most useful tools are focused on rate shopping. If you can set your prices accurately and to maximise revenue and profit, it gives you a lot more freedom to manage revenue across the rest of your business.
Price will obviously vary based on the type of tool you’re looking at. In the case of tools based around market intelligence and rate shopping, price will be very reasonable.
Look for providers who offer a flexible pricing model. This means no lock-in contract or commissions. The preferred way of paying is by set monthly fee.
You can always move to a contract later if you want a discounted price and are happy with the service.
Commonly the amount you pay each month will depend on the size of your property. The more rooms you have, the higher your fee will be. However the price will remain pretty static for hotels with less than 70 rooms. See a pricing example for your property..
Most top providers will offer a free trial of their software.
This gives you risk-free use of all the features for a set time period with no payment required. It’s a good opportunity to assess the usefulness of the software for your property, and you’ll also learn everything you need to know to maintain success in the future. Analyse results carefully so you know if the product has the necessary potential to warrant an ongoing investment.
When you sign up for a free trial with SiteMinder you should expect to be contacted within one business day to get set-up. The added benefit of the free trial is that configuration and training take place at the same time, so when it comes time to paying for the revenue management software you can hit the ground running.
SiteMinder can offer a 14-day free trial of its revenue management software – to help master your room rate and greater revenue strategy.
Get started today and see for yourself.
A big part of any important decision, whether it be buying shoes, a new pet, or a home appliance is to compare your options on a number of factors. Weighing up the pros and cons and many different considerations helps you make a clear decision.
The principle can easily be applied to revenue management tools. You can use review sites such as Hotel Tech Report to perform your competitive analysis.
On Hotel Tech Report you’ll be able to see scores and user rating for factors such as:
Additionally, you can view full customer reviews and recommendations from hoteliers just like you to gain some tangible insight. This type of feedback is usually very reliable because your peers have faced the same struggles and sought the same solutions.
Social media pages, such as Facebook, are another place you can visit to see customer reviews and compare the overall ‘vibe’ of providers. Do they interact with their audience? How many followers do they have? Are there positive reactions to their content? All of this can serve to help inform your decision.
Choosing your tool will largely revolve around the features of the product and the results it can deliver. Your provider needs to have the ability to unlock and analyse large amounts of market data for your hotel, and make it digestible for you.
Before you make your investment, ensure your tool has these features:
In addition, these features should help to deliver the following results for your business:
Amidst the constant work of managing a hotel day-to-day, being bogged down by data might seem like the last thing you want to do, but it can be one of the most beneficial.
By analysing the facts and figures across your hotel operations, you’ll be able to find plenty of opportunities to grow your revenue stream and further the success of your business. Often it can only take a small tweak to have a big impact on your annual revenue.
To help raise your bottom line, use these data strategies at your hotel to become more efficient and increase cash flow.
When it comes to your hotel distribution channels, it may seem like your path to glory is the channel that drives the most demand and highest number of bookings.
However, to truly know which channels are your most valuable you need to look at them from a net revenue perspective. This means you need to ask how much return are you getting on each channel after you’ve taken away any associated costs? What’s the average daily rate?
If you find that your most profitable channel is one you place less focus on, you have an opportunity to grow the demand for this higher quality channel and make each booking worth more for your business.
It’s important to constantly track the performance of marketing and distribution channels. While one strategy may have worked perfectly two years ago, you need to investigate if it’s still giving you the same benefit today. Perhaps the spend has gone up, and revenue down.
On the other hand, some channels may have added benefits like brand awareness that counteract a lack of revenue creation, and are still very useful. An example is holiday deal sites that you might advertise on. The rate is going to be low and the commission is likely to be high, but the exposure will also be significant. In this instance you would have to weigh up whether it’s worth it to be on a website like that, and for how long.
The insights you can gain from each guest that books and stays with your hotel are invaluable. If you can detect trends in who your guests are, what their preferences are, how long they typically stay, their purpose of travel etc. you can start to meaningfully shape a successful marketing and distribution strategy.
You’ll be able to identify any superfluous strategies and replace them with a more targeted approach, using tactics like emails or social media campaigns, to make your conversion rates much stronger – saving and generating money overall.
Your hotel probably uses a huge amount of power, costing you a lot of money. Any saving you can make here is like finding gold.
If you can discover how much time guests are spending inside and outside of their room, and when, you can adjust your ventilation and air conditioning systems accordingly. The same applies for when your amenities are being used. You could also consider when and where you need lights to be on throughout your property at all times.
A lot of the data you need to make informed decisions can be gleaned from the technology your hotel uses such as your channel manager or booking engine and website. Run reports and generate insights that you can act on almost immediately.
Of course, a revenue management system is one of the best solutions to keeping on top of your income, profits, and data. The right tool can ensure the revenue management at your hotel is down to a science and offers real-time automation.
One such tool is Pace, and CEO Jens Munch makes a pertinent statement about the state of hotel industry today:
“Many industries, including travel, still suffer today from low quality data hidden away in proprietary systems. However, there’s a trend emerging with modern cloud providers to alleviate those problems by enabling connectivity layers for their customer’s data. This lets solutions like us democratise our services and give hoteliers better access to state-of-the-art revenue management.”
Pace, and other machine learning services, generate significant optimisations and competitive advantages for their customers, and should be a serious consideration for any hotel wanting to boost their revenue.
SiteMinder isn’t just another software platform; it’s the key to unlocking the full revenue potential of your hotel. While other platforms may offer tools and features, SiteMinder emphasises outcomes. With SiteMinder, you’re not just investing in software; you’re investing in a brighter, more profitable future for your hotel.