Hotel revenue management is the fastest moving field in the hospitality industry — it’s tough to keep up. Check out the latest best practices and...
7 Hotel revenue management tools you should be using
Recent advancements in hotel revenue management tools have greatly helped hoteliers increase profitability. Check out 7 key tools for revenue managers.
A plumber has a toolbox. A dentist has their drills. And a revenue manager has their software suite to help get the job done.
In recent years, technological innovations have helped revenue managers improve their strategies and increase revenue in the competitive hospitality industry. It can be hard to keep up. But if used effectively, revenue management tools can save you long hours of managing spreadsheets and help you make smarter decisions throughout the revenue management cycle.
What technology should revenue managers use?
There are 7 key types of software a revenue manager uses to help them segment their market, set pricing strategies, and forecast demand. Each plays a unique role in a revenue manager's day-to-day and helps automate manual and repetitive tasks.
- Business Intelligence software (BI)
- Global Distribution System (GDS)
- Revenue Management System (RMS)
- Online Travel Agents (OTA)
- STR Report
- Channel Management Tools (CM)
- Property Management System (PMS)
Let's go over each one and discuss how they’re used.
1. Business intelligence software (BI)
Perhaps the most powerful tool in a revenue manager's toolbelt is business intelligence software. This unique technology combines data that’s often siloed in other revenue management programs and gives you complete visibility into your hotel’s internal metrics as well as market data on your competitive set. Business intelligence platforms allow you to track KPIs, automatically build performance reports, manage channels, forecast demand, and suggest optimal room rates from a single touchpoint.
A good hotel BI software will integrate with a number of other technologies on this list, saving you the hassle of a disconnected tech stack.
2. Global Distribution System (GDS)
A global distribution system is a digital network that enables transactions among travel industry service providers such as airlines, hotels, car rental companies, and travel agencies. A GDS
acts as a focal point and marketplace for companies within the hospitality industry and tangential verticals. Service providers have an ID with these GDSs that allows them to list their flights, rooms, and vehicle packages. Travel agents have subscriptions to one or more GDSs that give them access to these listings.
There are 3 main GDSs for the travel industry:
3. Revenue Management System (RMS)
The primary use of a revenue management system is to recommend optimal room rates based on your hotel’s supply and demand. Hotel revenue management software can be extremely valuable regardless of hotel size as it allows you to use advanced algorithms to do ADR and occupancy calculations faster. An RMS also manages room and amenity prices on multiple channels.
4. Online Travel Agents (OTA)
Online travel agents are websites through which most transient guests book their rooms. These are the most common type of distribution channels that hotels use to list rooms for booking. You can leverage OTAs to reach customers that your regular sales team can’t reach. However, it’s important to keep in mind that OTAs typically charge 8-25% of the room rate for each booking.
5. STR Report
Smith Travel Research (STR) is an American company that provides a monthly report to the hotel industry. Revenue managers use STR reports to access metrics on their competitive set as well as market indices. This helps in measuring and benchmarking against other hotels you compete with directly. Beyond just providing market share analysis for a hotel portfolio, STR reports empower hoteliers to make better decisions by letting them access insights into their competitors. STR currently tracks more than 60,000 hotels with over 8 million hotel rooms.
STR reports include metrics on:
- Occupancy rates
6. Channel Management Tools (CM)
Channel management tools allow you to partner with OTAs and smaller travel agencies so you can list your rooms and manage your rates. A CM acts as a centralised booking engine so revenue managers don't have to log into each OTA individually to change room rates or offer promotions and packages.
The most commonly used CMs are:
7. Property Management System (PMS)
Your hotel’s property management system is software that hotel managers and front desk employees use to coordinate reservations, online booking availability, payments, and reporting. Most PMSs have both front-end (e.g. front desk, sales, and revenue management) and back-end (e.g. operations and maintenance) functionality.
- Check in
- Check out
- Stay management
- Room Allocation
- Guest preference
- Rate management
- Management Reservations
- Event/function rooms management (S&C)
As a revenue manager, your hotel’s PMS is the primary source of internal revenue data. PMSs often integrate with hotel BI software and RMS so you can utilise historical and OTB data when segmenting the market, setting room rates, forecasting demand, and managing inventory.
How to get the most out of your hotel’s data
Two of the greatest challenges in modern hotel revenue management are breaking down data silos and automating time-consuming manual tasks. Utilising a complete hotel business intelligence and data management software can be instrumental in segmenting your market, calculating ADR, and driving revenue for your hotel or hotel group.
InTouch offers revenue managers and hoteliers the most powerful suite of decision intelligence tools available to the hotel industry. Leverage a fully compliant, secure, and cost-effective platform to reconnect your siloed data and make reporting, analysis, and collaboration as easy as pressing a button.
Request a product tour today to see how InTouch can turn your hotel’s data into decision intelligence.
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