Making financially sound business investments is a critical aspect of any hotel owner’s world. However, sorting through today’s vast sea of revenue technology and analytical capabilities can often leave owners swimming in dark, murky waters.
Here are the top six questions hotel owners should ask when investing in a revenue solution for their organization.
1) Will the revenue management solution solve my organization’s business problems – and will it be a sufficient return on my investment?
It’s important to work with a revenue partner to determine which solution solves the organization’s business needs.
Most providers will share the average ROI results their customers receive, but look for one that leverages a large database of results from similar properties.
This insight helps estimate benefits and ROI with a very high degree of accuracy. Realistically, owners can see a 3.5-5.5% increase in their room revenue, with some hotels reporting improvements as high as 14%.
2) What does “revenue optimization” mean and why is it important when looking at a revenue management solution?
Optimizing room revenue has two significant components: the price charged for guest rooms and inventory management.These two components work hand-in-hand, and cannot be viewed as independently-functioning aspects of any revenue solution.
An RMS (Revenue Management System) that does not set price is categorized as a yield management system; a system without inventory management is categorized as a pricing system. Only solutions with both components are called RMS and fully optimize room revenues.
Solutions providing only one component or the other offer a partial solution.
3) Do I need a revenue management solution? My revenue manager can handle it fine.
The current revenue and distribution environment is becoming exponentially more complex.