Don’t be Sold a Pig in a Poke: 20 Questions To Ask an RMS [Part 1]
When implementing digital strategies, it is important to always measure and monitor progress as this will help revenue managers make the best decisions.
Traditionally in Revenue Management (RM), pricing decisions were made on gut-level intuition, however, in today’s highly competitive market, revenue managers can’t afford to wrongly price hotel rooms. There are many complex variables that must be considered before pricing and revenue manager should count on a solid basis for making the most accurate decisions. Excel documents are very practical and operational, but are not versatile enough to offer immediate and market-ready solutions. And, many times revenue managers are left to decipher vague information regarding the features and capabilities of an RMS, which can make choosing the right RMS difficult.
Revenue management is the most important part of a hotel´s operations. Therefore, it’s important for hoteliers to ask the right questions to RMS providers. We have compiled a list of 20 questions worth asking. With these questions you will be able to determine if your current RMS meets your hotel´s most important needs. Or, if you are currently in the process of searching for the right RMS, ask these questions before investing in a RMS:
1. Is it possible to map my competitive position in regards to quality/price in the market? Yes. Presently, we have access to a vast amount of unstructured data that, when identified and organized under an RMS tool, can provide valuable information about your competitive set. This allows you to track all the possibilities that exist for your hotel in the market. By unifying all hotel analyses under an objective indicator that standardizes the parameters, revenue managers are able to know their own position in the market as well as their competitors.
2. Can an RMS consider the hotel chain and category, online reputation, location, facilities and services when calculating market position? Yes. However, not all revenue management solutions can offer this service or visually display this information. The art of an RMS is not in simply collecting information, but in displaying this information so that the revenue manager can easily interpret the data provided using the most important indicators, and be able to clearly see improvements.
3. Is the RMS flexible and can it be easily integrated with my hotel´s technology (PMS, CRM, Channel Manager, etc.)? Yes. Integrations between tools are becoming faster and more agile. Technology is continuously evolving to be more versatile and compatible with property management systems such as PMS, CRM or Channel Managers, among others. The integrations process is meant to be as hassle-free for the hotelier as possible and we are constantly working closely with our integration partners to make every integration successful.
4. Does this system allow you to calculate rates and the optimal length of stay for groups? Yes. There are certain RMS that offer group quotes. With the sales forecasts, revenue managers can make quick and efficient calculations and price hotel rooms in the best way. There are occasions that group bookings may not be profitable to the hotel and the hotel may choose not to lodge them.
5. Can an RMS offer demand forecasting for the destination? Yes. As long as the RMS can analyze the booking curve of a given destination, it can extract the pick up from traveler behavior. Revenue managers are then able to see their hotel´s positioning with respect to the destination as a “business unit.”
6. Does the RMS provide a what-if scenario analysis? Yes. The what-if scenario allows you to obtain data regarding price variations, and allows you to adjust room availability or rates to get the most out of any period throughout the year. Thus, you can easily view different possibilities and scenarios, anticipating minimum margins of error.
7. Is it possible to detect price disparities and minimum stays with the RMS? Yes. Integration with different channels and market transparency make it possible for revenue managers to detect any price disparities at any given time and know how other portals work with minimum length of stay.
8. Does it offer suggestions regarding pricing or availability based on mix of segments (couples, families …)? Yes. Segmentation and personalized offers are important in the hotel world. So, it is fundamental that an RMS offer this feature. Our solution allows you to personalize offers based on the type of guest, guest needs and booking behavior.
9. Can you personalize the algorithm with custom rules and adapt it to my hotel? Yes. A “one size fits all” approach to delivering hotel products and services is a thing of the past and does not provide any value to travelers or revenue managers. It is important for an RMS to be flexible and to be able to align with unique business needs and rules.
10. Is the RMS complicated to use? No. We are used to working with complicated software with highly unattractive designs, but having a pleasant work environment both online and offline is critical. Our revenue management solution is intuitive, saves revenue managers valuable time, is customizable and has a sleek user interface.
There are many RMS tools in the market, however it’s important to differentiate the ordinary from extraordinary and partner with the right RMS provider to optimize revenue, increase profitability, and outperform competitors.
Therefore, it’s important to use these 20 questions to get as much information from RMS providers. The right RMS tool is fundamental for delivering the highest quality pricing recommendations and for maximizing your hotel´s RevPAR.
BEONx is a dynamic pricing solution that helps revenue managers make critical, timely decisions based on science-driven processes.
Our RMS uses advanced machine learning and forecasting models to deliver exceptional results. We also factor the quality of the hotel and customer segmentation, making our RMS different from the competition.
At BEONx, we’re continuously innovating so that we can continue fulfilling our clients needs. Can you think of a question that we might have missed?
Click here to read the second part of this article.