Using Hotel Revenue Management Software to Increase RevPAR

A Cornell University Study, published in the Analysis if Revenue Management Vol. 5, No. 6, in the April of 2005, revealed that hotels that price above their competitors have the most aggressive hotel revenue managers. They are the best when it comes to increasing RevPAR, improving yield management, and boosting profitability. Many hotels want to raise their room rates in order to increase RevPAR but this strategy may not always work. Its success depends on brand image, amount of available facilities, location, demand, the number of competition, and general economic condition.

It should be noted though that the most successful hotels when it comes to revenue per available room implements hotel revenue management strategies. However, it you should note that the requirements of revenue management systems for individual hotels are different. For example, the needs of a 50-room boutique establishment are far different form a 600-room chain hotel. Before buying inventory software, booking software, or a yield management software, establishing the exact requirements of the hotel in terms of RMS systems and functionality is important.

If you’re anticipating the implementation or the upgrade of a system, evaluating the potential return of investment of the revenue management systems including their sustainability needs to be done. Below are some guidelines that will help you find the best hotel revenue management software:

Departmental Needs – each department has its own requirement when it comes to documentations needs, report, and other data gathering and retrieval technique for effective decision making. Hotel revenue managers need to know the minimum and the optimal requirement of each department.

Existing Hotel Revenue Management System – if you already have a revenue management system in place, consider if it would be more cost effective to replace it or to add certain functionalities. In addition, be sure to find out what the exact requirements are. The last thing you want is to have the same problems in the new system.

Hotel Channel Management – most hotel applications have this feature. Finding the right one is only a matter of how complex your business structure and the promotional mix. A system that allows you to evaluate the different revenue streams is a particularly effective one.

Customer Behavior Analysis – a good revenue management system should be able to forecast customer behavior based on historical data and customer information. The information helps the hotel revenue managers make better decisions based on actual data, not on guess work.