5 common misconceptions about upgrading your revenue management system
There are a number of common misconceptions about revenue management systems and their purpose and effectiveness, so we’ve decided to bust some common myths and sort the fact from the fiction.
Hotels can end up sticking with the same systems for years for various reasons, but in many cases it can be because hotel managers may not fully understand what they should be getting out of their software, so will persevere with a system that is outdated and not fit for purpose.
A skilled workman is only as good as his tools, and similarly a skilled revenue manager will be limited by a poor revenue management system.
MYTH 1 – All revenue management systems offer the same
Perhaps one of the most common misconceptions. There are many revenue management systems on the market, but not all provide comprehensive systems to support your business. Some systems may be great at operating lots of different sales channels but may require manual input for other elements such as pricing. There is no “one size fits all”, so it’s important to do research to find the right revenue management system and the proof of success will be shown in the results they achieve for hotels.
MYTH 2 – Revenue managers need to watch their backs as they will all be replaced by revenue management systems
While modern revenue management systems are extremely sophisticated with endless functions to collate, calculate and predict revenue data, they are at heart a tool to be employed by a hotel’s revenue manager or in fact any key hotel personnel. The aim is not to replace revenue managers, far from it – the aim is to help a revenue manager do their job more efficiently and effectively. Good revenue management systems aren’t here to replace strategy or decision making, but rather they do the legwork in the background, freeing up time for revenue management analysis.
MYTH 3 – Revenue management systems are only good for online sales management
Now that most customers book hotels via the internet, revenue management systems have become far more sophisticated than just managing online sales. There are many aspects that create a truly effective revenue management system, not least how people land at your hotel – revenue management systems can enhance page positioning on third party websites, channel management and, of course, ease and speed of booking. A comprehensive system combines all of these elements with the ability to price competitively, optimise rates and more.
MYTH 4 – The revenue management system that came free with my PMS is good enough
Just because your property management system came with a revenue management system included, it doesn’t necessarily flow that this will be the best system for your business. While the packaged offering is improving and, indeed, there are some very good integrated systems available now, some providers have ‘bolted on’ basic revenue management systems to make an established PMS a more attractive investment. Unfortunately, this can mean the functionality and capabilities of the RMS are limited.
The best revenue management systems can often integrate seamlessly with your existing PMS, so it’s not essential to have the two running off the same platform.
MYTH 5 – Revenue management tasks are too sensitive to be managed by an online revenue management system
If the past year has taught us anything it is that speed is key and reacting to change must be quick and effective. Even a slight market change needs a rapid response in order to offer a prospective guest with the best rate possible. If a revenue manager was tasked with monitoring such subtle changes, there would be little time for other aspects of their demanding role. Even though pricing changes can be fully automated, revenue managers can still retain a proactive role in designing and planning these changes, rather than having to react to every single change in market.
If you’re thinking of upgrading your revenue management system, or would like an independent audit of your existing systems to find out whether you’re getting the most out of them, Octopus Revenue can help. Check out our systems services here, or get in touch to find out more.