What is a revenue management system?
Updated
A revenue management system (RMS) is software that studies demand, competitor prices and your own bookings to recommend the room rates a hotel should charge.
Why does it matter to a small hotel?
Large hotel groups have revenue managers who spend their days on exactly this job. A revenue management system gives a smaller hotel part of that help: it looks at how fast a night is filling, what the market is doing and which events are coming, then suggests a rate. The better ones show their reasoning, so you can see why and overrule it. Some are built for chains with hundreds of rooms and price accordingly; others are made for independents. Ask what you must connect, how much set-up it needs and whether it works without a property system. The tool does not replace your judgement of your own hotel. It saves the hours of looking.
A worked example
The 24-room hotel prices a summer Saturday at £165 all season by habit. A revenue management system notes that, five weeks out, bookings are ahead of last year and rivals are filling, and suggests £185. If the hotel sells the remaining 10 rooms at £185 instead of £165, that is an extra £200 for the night. The owner still decides, and can overrule a suggestion that does not fit what they know about the guests. If you want to see how recommendations look for your own rooms, start a free RatePulse trial.
Related terms
Questions people ask
Is a revenue management system worth it for a small hotel?
It can be, if pricing currently takes real time or relies on guesswork. Judge it by trial: does it save time, and are its suggestions ones you would act on?
Does an RMS set prices automatically?
Some can; many only recommend. Check whether you stay in control of the final rate and whether changes reach your channels.
What data does an RMS need?
At minimum, your rates and room count. Booking history from your property system makes the suggestions sharper but is not always required.