How to Choose an RMS:
Ever wonder why your hotel property should use a revenue management system - or the even more important question - how to start searching for an RMS that suits you? Chances are that you've been searching for a resource that just doesn't exist - but look no further. Large hotel chains with established tech and revenue teams have long used RMSs to maximize profit, correctly evaluate risk, and predict market trends. Smaller teams, however, often haven’t had this luxury but would see major benefits with a comprehensive RMS strategy.
Before we dive into the details of revenue management, it’s important to stress that any good tech stack starts with open technology. Today, “APIs” are the major keyword for connectivity and automation within the industry. An API, application programming interface, sends and receives data instantly between multiple programs. In order for one application to properly function, it relies on retrieving any relevant data. Just imagine how automatic things work when a traveler books a room on Booking.com. The systems in place not only know the current availability, the various prices, and also know when a room is taken from a walk-in guest. As a traveler, you don’t see that all of the data points are always being transferred, but from the hotel side, there are multiple systems and applications that make sure this works.
This fast and open connectivity is a fundamental requirement of any modern enterprise. Open APIs empower you to be less dependent on any single service partner and take control of your data and services. The key term here is open, because not all APIs are created the same. Many APIs are built for one specific use case, and therefore don’t have the capabilities to make full use of all the data points that could be shared. Another issue that inhibits an API’s openness is the fact that they are already available without any interface fees for the app that wants to connect or the hotelier who wants to benefit. Legacy and cloud PMS providers might be willing to spend months to build an API that works, but this costs both time and money, which often get passed on to the property.
What does that jargon mean in layman’s terms? It means you can have a fast integration process and go live in hours and days and not weeks and months. It means you will have accurate data flows as a real-time data platform enables software providers to pass messages straight through the system and into the application and will give you immediate visibility on how data is being processed. Also, it means you will get regular new features as agile product engineering teams are always moving with high velocity and releasing new features in the background.
So, if you're hoping to implement the learnings of revenue management professionals, consider this your exhaustive first step. Before we dive into the details of revenue management, it all starts with an open API and a platform that supports open protocols. Next, there are a number of aspects that are important when finding and evaluating an RMS. Continue reading for chapters on the following:
1. Pricing optimization
2. Business mix optimization
4. Data analytics
5. Benefit evaluation
Revenue management systems have not kept pace with platforms in other industries and COVID-19 has only made the problems worse. As revenue professionals have been forced to do more with less, the weaknesses in their RMS platforms have become untenable for many. The RMS market ranges from the good to the bad to the ugly. So, what should you be looking for in an RMS?