RMS: Ally or Enemy of the Revenue Manager?

In the dynamic and competitive world of the hotel industry, revenue optimization is an increasingly common practice, especially among mid-sized chains and independent hotels.

The adoption of Systems of Revenue Management (RMS) has become a trend that divides opinions: some see the technology as a potential threat that could replace revenue managers, while others see it as an indispensable ally.

In this blog post, we will explore this debate, based on the experience and vision of Irene Guinarte, CEO of Wavyssa, an expert in the field.

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Context

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The implementation of RMS systems in the hotel industry has generated significant controversy. On the one hand, there are those who fear that these automated systems could replace the human role of the revenue manager. On the other hand, there are supporters who defend the technology as a tool that enhances efficiency and accuracy in revenue management.

Irene Guinarte, a leading figure in the field of revenue management, sees technology as an ally, not an enemy.

According to Irene, repetitive and mechanical tasks should be automated to free up revenue managers and allow them to focus on more strategic tasks. In her opinion, technology does not replace the revenue manager, but complements him or her and makes him or her more efficient.

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Four Types of Business Situations

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We can identify four types of situations that companies may face in relation to revenue management and RMS technology:

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No Revenue Management or RMS:

Common in small hotels or very small chains.

The lack of a structured revenue management system can lead to inefficient revenue management.

With Revenue Management but without RMS:

There are profiles that are not true revenue managers and simply "price gouge".

Without an RMS, these companies cannot optimize their revenues efficiently.

With RMS but without Revenue Manager:

This is a risky situation, as having the tool without a trained professional can lead to serious errors.

The lack of a revenue manager can result in underutilization of the system's capabilities.

With Revenue Manager and RMS:

The ideal situation, where technology and human skill are effectively combined.

This combination maximizes efficiency and accuracy in revenue management.

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Important Functionalities in an RMS

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Needs Analysis

For an RMS to be truly effective, it must be able to manage the entire distribution mix of a resort hotel.

This includes not only rates, but also the management of different room types and customer combinations. A proper needs analysis ensures that the selected RMS can cover all aspects relevant to the hotel.

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Adaptability according to Hotel Typology

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The choice of RMS should be based on the type of hotel. A resort hotel will need a system that can handle various room types and customer combinations.

On the other hand, an urban hotel will require an RMS that optimizes corporate rates and manages specific segments such as MICE (Meetings, Incentives, Conferences, and Exhibitions).

Avoid Imitating the Neighbor

Each hotel should choose an RMS based on its own specific needs, not on what the competition uses. What works for one hotel may not be suitable for another. It is crucial to do a detailed needs analysis and select an RMS that perfectly fits those needs.

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Importance of Robust Integrations

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Integrations between the RMS and other systems must be reliable and robust to minimize errors. Common problems include pricing that is not updated correctly, poorly managed channel closures and other inconsistencies that can affect sales and management.

An RMS with robust integrations ensures that all systems work in harmony, avoiding lost sales and operational errors.

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Direct Channel Priority

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The direct channel should be prioritized in pricing and availability updates. A "one size fits all" strategy (same strategy for all channels) is not effective.

It is crucial to customize strategies to maximize direct sales and ensure that the most important updates are made in the direct channel first.

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Sales Control and Maximization

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Having direct control from the RMS allows for better price and availability management. Quality integrations ensure that there are no lost sales or errors in data distribution. Direct control provides greater agility and accuracy in revenue management.

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Conclusion

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The implementation of an RMS in the hotel sector is not a question of replacement but of complementarity.

Technology should be seen as an ally that enhances the revenue manager's ability to make strategic decisions and optimize hotel revenues.

When choosing an RMS, it is crucial to make a detailed analysis of the hotel's specific needs and ensure that the integrations are robust and reliable. In this way, efficiency and accuracy in revenue management can be maximized, ensuring success in an increasingly competitive market.

See the Cabot Hotels case study.

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