What does a revenue management software do?
What data does a revenue management tool work with?
Actually, the revenue manager is the interface between sales, controlling, consulting and marketing. He is therefore the contact person for revenue management.
He deals with the optimization of sales and works with the costs that arise in the hotel. This includes the variable and fixed costs as well as the evaluation of the BWA.
With the help of the costs, he calculates the lower price limit of each room, i.e. the price that the hotelier must advertise at least per room and overnight stay. In his position as manager he is the hotel’s consultant.
The revenue manager has an overview of all company figures and works closely with the controlling department. Unfortunately, revenue management is neglected, especially in smaller hotels where the necessary capacities are not available.
Therefore, especially small and medium-sized hotels should expand the use of the dynamic pricing.
Revenue Manager – Responsibility for revenue and profit
Based on revenue management, the hotel orients itself to the market and its price and supply demand.
It forecasts long-term distribution and sales activities. For this purpose, the revenue manager calculates the break-even point and the lower price limit (PUG).
He requires various key figures, such as sales costs and detailed market and competitor analyses, in order to be able to predict statements about future developments.
The revenue manager is therefore in control of the recommendations he gives the hotelier. He influences marketing activities and price strategy.
What are the guests, customers and competitors doing?
A fundamental analysis of the key figures is the basis of the work for a revenue manager. In order to be able to make statements about the development of sales, he first needs data on comparable competitors.
For successful revenue management, he also takes a closer look at the behavior of customers and guests. Questions such as length of stay, price willingness, time of booking and reason for stay are the focus of attention.
How revenue management increases total revenue
The revenue manager can plan different occupancy rates within a hotel. It can calculate occupancy of hotel rooms as well as of Mice conference and event rooms.
The advantage of cost planning of a hotel room or conference room compared to services is the fixed inventory.
This means that the rooms are not made like a meal, but are available. Therefore the costs are very regular and measurable. However, the costs incurred depend on the occupancy. If the occupancy is low, personnel costs may be incurred, but it is actually possible to give the personnel free and only pay them according to the time spent. This is the advantage in the calculation.
It is important for revenue managers to be able to process all the data and put forward arguments for prices to the hoteliers. Software applications and tools can be used to support planning.
Yield-Management vs. Revenue-Management
Yield management systems consist of nine elements and are used by service providers such as airlines, hotels and car rental companies. Based on the Yield-Management, the total revenue of the company is maximized by giving priority to the demand with the highest willingness to pay.
The revenue management system, on the other hand, is used to control demand by means of capacity availability and prices.
Perfect prices thanks to precise analyses
Since the number of rooms is limited, the hotel has a value that is limited and should therefore be used optimally. Things like customer satisfaction and price levels are factors that strongly influence marketing and revenue management.
Therefore, a precise analysis of demand and capacity forecasts ensures perfect pricing.
Since it is difficult to predict price developments, capacities and demand, happyhotel supports as software. The tool is the basis for building a price strategy.