Revenue management refers to the practice of applying data to develop strategic, profit-boosting pricing models.
It’s used in businesses of all types. However, when it comes to the accommodation industry, revenue management is used more specifically to predict consumer demand so that hotels, holiday parks, resorts, and other hospitality businesses can sell their rooms or sites at the most optimized prices. Now that we have that covered, what is a Revenue Management System (RMS)?
What is a Revenue Management System (RMS)?
A Revenue Management System (or RMS) is an intelligent software solution that automates necessary revenue management tasks to save time and increase efficacy. For hospitality businesses, these systems work to calculate and recommend appropriate rates for a specific time of year, customer type, or channel based on the data they collect and analyze.
Here’s Why You Need a Revenue Management System (RMS)
The nature of the tourism industry means that hospitality providers, no matter how big or small, must compete with countless factors that ultimately affect their bookings, like supply and demand – that will always be the case. Revenue Management Software (RMS) helps navigate this, which is why it’s such an invaluable resource to owners and operators of hospitality businesses.
- First and foremost, it helps businesses boost their bottom line by optimizing rate strategies, but that certainly isn’t the only benefit on offer.
- In terms of operational efficiency, RMS software can help a great deal. These systems put in the hard work to carry out time-consuming calculations and labor-intensive tasks, minimizing both human error and excessive wage expenditure.
- It’s also essential for providing businesses with future revenue projections, allowing them to make more informed, strategic decisions moving forward and improving overall business stability.
Features of Revenue Management Systems (RMS)
Revenue Management Systems (RMS) come in all shapes and sizes, and there is never a “one size fits all” solution. In many cases, RMS software comes in the form of a comprehensive, standalone system, but often, other software solutions like Property Management Systems (PMS) come equipped with revenue management features that can be just as beneficial.
If you’re on the hunt for a Revenue Management System (RMS), your choice all comes down to your own unique business size and requirements. However, as an accommodation business, there are a few key features you should keep at the top of your priority list when searching:
- The ability to calculate and suggest rates
- The ability to adjust rates across channels
- Competitor analysis
- Occupancy and average daily rate reporting
- Future revenue estimates
At NewBook, we offer advanced revenue and rate management tools to help you respond to market conditions and maximize your profits, like Dynamic Pricing, Tariff Overrides, Master and Dependent Pricing, and a whole stack of comprehensive reports.
Most importantly, Dynamic Pricing. Our Dynamic Pricing tool can help you manage your rate fluctuations without lifting a finger. This tool is an integral part of all RMS solutions and quickly calculates and automates price changes based on occupancy levels throughout your property. All you need to do is set your minimum and maximum rate amounts and NewBook will do the work for you. We’ll automatically increase your rates as the occupancy for the relevant time frame increases and distribute them across your channels. Our Dynamic Pricing is so effective that our clients have seen up to a 42% increase in their gross revenue within just two years of using it.
Our Tariff Overrides feature allows you to make changes to your rates in bulk across multiple channels or just one, e.g. your NewBook Online Booking Engine or Booking.com. Whether you want to increase a specific rate by a fixed amount, or several rates by a certain percentage, add a minimum length of stay requirement, or even pause a rate altogether, the options with this feature are endless, not to mention extremely handy and time-saving.
Master and Dependent Pricing
Equally as beneficial is our Master and Dependent Pricing feature. This feature will help you adjust your rates quickly and efficiently. Simply set your Master Rate and all its specifications – like minimum stay periods, deposit rules, and cancellation fees – and link up your Dependent Rates so that they automatically pull through the master data. Whenever you adjust your Master Rate, your Dependents will update in relation to the master rules, so you won’t need to worry about making manual changes for each of them. Easy!
Reporting tools are a must-have for any worthwhile RMS software. NewBook is equipped with a library of helpful reports to provide insight and assist you when making financial or revenue-related decisions. Pretty important stuff.
First off, our Occupancy Report will show you the total figures for the year for each of your set accommodation categories. If you want to delve deeper, our Occupancy History report can be used to show you daily, weekly, or monthly breakdowns for the year.
Next up is our Dynamic Pricing Report. This report is fantastic when measuring fluctuations in pricing based on Dynamic Rates over your chosen reporting period. It captures the data in a Pie Graph and easy-to-read tables, so it’s super quick and simple to use whilst still delivering valuable information.
The Bookings Forecast Report allows you to view and compare monthly occupancy and revenue. This report is perfect for investigating how your property is performing now compared to the same time the previous year whilst considering the expected pickup. It utilizes complex formulas to estimate the bookings you could expect to make over the chosen period and compares these potential figures with your total booking performance for the same period last year.
Revenue Management Integrations
NewBook currently offers a two-way integration with IDeaS. This integration will allow IDeaS to send daily pricing decisions to NewBook which save as Tariff Overrides. IDeaS also provide rate suggestions based on market trends and competitor analysis, so it’s a pretty handy integration to have.
PriceLabs is designed for Airbnb and vacation rentals. Like IDeaS, it analyzes each of your listings and recommends daily rates based on seasonality, day of the week, lead time, and local demand. It also offers automated pricing updates, customization tools, and more.