The simplest and most effective Hotel Revenue Management Software
Aiosell provides the most effective hotel revenue management system that uses AI and dynamic pricing to help you maximize profits for your hotel or vacation rental property.
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Why is Aiosell the Best Revenue Management System
Aiosell provides a unique & most effective hotel revenue management software that can help a hotel increase revenues effectively.
Uses dynamic pricing to calculate real-time rates
Rates can change multiple times a day automatically
Algorithm uses superior automation & AI
Both internal & external factors are used to calculate rates dynamically
Connects with Channel Manager to update rates instantly
Rates for all rooms & rate plans are linked with each other
Forward Rates can be updated for more than a year forward
Superior Analytics & Reports to help analyse data & trends
What are unique features in Aiosell Revenue Management Software
Aiosell Revenue Management System contains some unique and best in class features that make it one of the most suitable for hotels to maximize revenues:
- Every room can be sold at different price (linear occupancy based pricing instead of slab based pricing)
- Automatic overbooking of lower category rooms to maximize occupancy (inventory reallocation)
- Time based factors can be used for last minute bookings (last 48 hours) to increase or decrease rates automatically based on occupancy
- The booking window for dynamic rates can be defined to any number of days. It can range from as low as 7 days to up to 2 years
- Weekday weightage: Each of day of the week can be configured to adjust the rates according to market needs.
- Datewise / Season factors: There are several specific dates / long weekends / seasons that need to be specified in the system which needs adjustment of rates (for example: conferences, events, weddings, etc).
- Month-wise factors: Most hotels have seasonal business and the rates have to be adjusted for each month depending on market conditions and competition.
- Minimum & Maximum Thresholds: The algorithm needs to be define minimum and maximum threads for each room, rate plan. These thresholds can be overridden / adjusted for specific dates that can override the overall yearly configuration.
- Each rooms and rateplans can have dynamic pricing that can be linked either based on fixed differential amounts, or % amounts from the base rate.
- Competition based pricing can be used to either adjust rates higher or lower than predefined thresholds.
What is revenue management system for hotels?
Revenue management for hotel is the process of deciding the right price to sell a room to the right customer at the right time, through the right channel. The process of deciding this right price, and ensuring this price is propagated to all relevant channels through the use of right software, is what makes the revenue management department of the hotel.
The purpose of revenue management is to maximize revenues (RevPAR – Revenue per available room), which means striking the right balance between occupancy and ADRs (Average Daily Rates).
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Why is revenue management important for hotels?
Revenue management is one of the important functions of any hotel and it can be the difference between success and failure. Hotel rooms are perishable inventory, which means if they are not consumed they are lost forever.
Hence, It is extremely important for hotels to choose the perfect revenue management software that can assist them the right price to ensure that they are neither underselling their rooms, nor overcharging for them to compromise on their occupancy. Finding the right balance between occupancy & ADR is the key challenge of hotel revenue management.
Property Management
System (PMS)
Hotel Website
Booking Engine
Reviews Manager
Analytics & Reporting
Competition Rate Shopper
Commission Tracker
Direct Feedback System
Meta-Search Manager
OTA Management
Channel Manager
Accounting Support
What are the guiding principles and key secrets to revenue management for hotels?
· Assess the market demand & potential to fulfil that demand.
· Evaluate whether your property is within a monopolistic market (limited options to customer) or competitive market (excessive options to customers)
· Understand the price elasticity (sensitivity) of demand. In other words, how much additional demand will be generated for hotel lower price.
· Assess what is the peak price that customer is willing to pay during the high demand period and at what level does this plateau out.
· Keep fine tuning the algorithm to experiment the price sensitivity.
· Evaluate the variable and fixed cost of servicing a room.
· Determine the minimum and maximum rate price band for your property (beyond which either it is unviable for both hotel and customer).
Experiment with revenue management system to determine the best pricing strategy.
How and when should revenue management software be used in hotels?
Revenue management system should always be used by hotels, both during low business and high occupancy also. With automated revenue management systems like Aiosell, the need for software can differ based on size of your property:
- Large hotels / Chains can use automated revenue management system in a way that maximizes productivity. They can have one revenue manager either per property or for a cluster of property, depending on variability of rates, and how frequently the algorithm needs to be tweaked.
- Smaller Independent hotels: With an automated revenue management system, smaller hotels can typically either have their General Manager, Front Desk, or hotel owner who can use the revenue management system to get best results. The number of changes done for smaller hotels is typically lesser than those for large hotels, however they can vary based on market conditions.
What is dynamic pricing and how does it work with revenue management software?
Dynamic pricing is a part of hotel revenue management system, where the rates can change multiple times in a day / hour / minute depending on real-time factors. These rates are often not pre-decided by the revenue manager, however they are determined based on prior algorithms / models that have been agreed by revenue manager and hotel management.
Revenue Management systems with Dynamic pricing typically connect the revenue management system to an inbuilt Channel Manager and to distribution platforms (like OTAs) to ensure the dynamic rates calculated by RMS system are propagated instantly to all connected platforms, and this keeps the revenue strategy completely dynamic and real-time.
Revenue management systems with dynamic pricing have the ability to get the highest revenue for the hotel, if the algorithms that control the dynamic pricing are managed efficiently and proper data / competition / trends have been studied to determine the dynamic pricing algorithm.
What are different types of revenue management system?
Different types of revenue management systems that are used by hotels are as follows:
- Manual: This is the most commonly used revenue management method used by hotels, where the hotel management changes rates manually, using some kind of excel sheets or simple predecided formulas / thresholds as set by management.
- Past Data driven: Many legacy hotels use revenue management systems that typically use past data as a proxy for future market behaviour. These systems assume that market behaves in a predictable / similar manner, and typically give revenue management recommendations that are typically then used by revenue managers to take pricing decisions.
- Dynamic Real-time: These are the most advanced and relevant revenue management system like Aiosell, where both past data analytics, along with real-time scenario is used to take dynamic pricing decisions which can change any time based on changing scenarios.
What factors should we consider while choosing a revenue management system?
The following factors should be considered while selecting the best revenue management system in today’s scenario:
- Dynamic Pricing: the system should take pricing decisions based on real-time factors instead of only past data.
- Connectivity with OTA: any system that should be used should be connected to Channel Manager & OTAs in real-time rather than having to be used manually.
- All in One System: The best revenue management systems are those that integrate seamlessly with the Property Management and Channel Manager systems. One should consider integrated systems that provide all functionality packaged in one.
- Internal & External factors: RMS system should look at both internal factors (like occupancy, booking window, month, day, time) but also look at external factors (like competition rates, market demand, event calendar). The ideal weightage ratio should be 70% internal factors, and 30% external factors while deciding the optimum rates.
- Group / Chain hotels: Best revenue management system should be ale to perform revenue management systems for groups / chain hotels where the data and insights from multiple locations can be used to make informed pricing decisions.
- Analytics & Reports: Data & trends are an important part of any best RMS system, and one should consider the detailed nature of analytics, trends, reports that are present in any system.
How much does revenue management system cost?
Revenue management systems are typically priced in following manner:
- Fixed Pricing: A fixed pricing to use revenue management system per month or per year.
- Per Room Pricing: a fixed pricing per room to determine the monthly / yearly cost.
- Package pricing: revenue management system can be part of an integrated package where the pricing is included in addition to many other features.
- Variable pricing: Typically applicable for new / smaller properties, some hotels pay for revenue management as percentage of business generated rather than fixed pricing. This makes it a win-win for both parties, as the RMS system has to deliver success to the hotel to earn higher revenues.
How important are competition hotels prices to determine best prices for hotels?
The importance of competition pricing in hotels is dependent on the nature of the market / industry in that micro-market. There are two types of micro-markets available:
Limited Supply: This is a type of market industry condition where the demand is far higher than supply, and there is a limited supply of hotel rooms given the nature of demand. This can happen during certain months / dates or all through the year, depending on the nature of micro-market. It can also happen depending on the differentiation provided by the hotel in terms of quality, service, location, or amenities.
In this monopolistic, limited supply market condition, the importance of competition pricing is much higher. The limited supply players can agree to decide a floor price of the market, thereby ensuring that customer has to pay a minimum price for any option in that market. Monopolistic markets are often short lived and can sometimes be usurped by competition markets, over a period of time, depending on government efforts and private sector in that micro-market.
For competition pricing model, a hotel can have a strategy to keep the pricing within a certain range of closest competitor (higher or lower) and ensure that the range does not waiver too much.
Oversupply / Abundant Supply: This is a type of micro market condition, where there is abundant supply of hotel rooms vis-à-vis the demand in that micro market. Customer has enough options to choose from, and there limited differentiation between options. This condition of the industry takes the bargaining power away from the hotel and puts it in the hands of the customer. Hence, it is very difficult for players to agree to any kind of floor pricing, and there is cut throat competition between players.
In this market scenario, the relevance of competition pricing is much lesser, because each hotel is on its own. And in this case, it is most important to focus on internal factors (like occupancy, data, reviews, time of day, etc) to decide prices rather than follow the competition rates.
Which pricing strategy is relevant for you is often dependent on market conditions like property location, demand in the micro-market, property quality, reviews, ratings and price.
How to change last minute pricing for hotels?
With reducing booking windows, almost 60% of bookings happen within the last 48 hours in business hotels, and about 30% for leisure hotels. Hence, the need to change prices dynamically within he last 48 hours is absolutely critical to success of any hotel. Revenue managers are always struggling to change prices quickly enough to ensure that the hotel can maintain a balance of high ADRs and high occupancy.
It is extremely important for any Revenue Management System like Aiosell to have last minute price change ability to ensure hotel can maximize profits. The revenue management system should be able to either increase or decrease the prices at different time intervals (multiple times a day), and link to occupancy levels at that time of the day, to ensure no money is left on the table and the hotel can either increase ADRs during high demand periods, or increase occupancy during low demand period.
What is booking window and how to use it for revenue management in hotels?
Booking window is the length of time between the booking time and the checkin time of any booking. Traditionally, booking windows were much longer due to lack of easy booking ability and lower supply of options around the world. However, with increasing use of technology, online travel agencies and real-time inventory supply on all available channels, customers have resorted to delaying the buying decisions, thereby reducing the booking windows further.
Booking windows are typically lower for business hotels (where inventory supply is large in cities), and customer demand is unpredictable, sometime going to as low as 24-48 hours. However, in leisure & holiday markets, the booking window can be much longer (ranging from weeks to many months also), depending on the availability of inventory and type of demand that exists for that micro market.
Whenever, the supply (inventory of hotel rooms) in the market is higher, the booking windows are typically shorter, because customer is not worried about availability of rooms, and hence has the luxury to delay their decision. Wherever, the supply is limited and outstrips demand, the booking window is much longer due to limited availability of rooms and customer is fearful they would not access to the rooms they wish.
How to use revenue management system with existing systems in a hotel?
A revenue management system can be used as an add-on system with existing Property Management System (PMS) and Channel Manager in multiple ways:
- RMS connected to PMS: In this configuration, the RMS system is connected with a PMS system which already has a 2 way connectivity to Channel Manager for online bookings. In this setup, RMS system sends real-time rates to the PMS system, which can be used to calculate Best Available Rates for all channels and pushes those rates to the already integrated Channel Manager system. The PMS pushes real-time inventory to RMS system and also updates all bookings (offline and online) for RMS to be able to take smart decisions.
- RMS connected to CM: In this configuration, typically the PMS and Channel Manager do not have connectivity with each other. In this case, the RMS can have 2 way connectivity to the Channel Manager so it receives real-time online bookings and provides rates and inventory to Channel Manager based on dynamic algorithms and AI.
- RMS connected to both PMS and CM: In this configuration, RMS is the middle-ware system between both PMS and Channel Manager. The PMS system sends real-time inventory status to RMS, which in turn is used to calculate Dynamic Rates that are pushed to OTAs through connectivity with Channel Manager. Any online bookings received from the Channel manager can further be pushed to the PMS due to the connectivity of RMS with both systems.
- RMS All in One System: RMS systems are also available as All in One Systems (like Aiosell) which can perform the role of PMS, Channel Manager and RMS all in one, which gives maximum performance, data transparency, and efficiency to the hotel to maximize profits.
- RMS Standalone: This is the legacy way of operating RMS, where data was fed into RMS systems which was only used to predict rates, which was then used for Revenue Managers to manually update rates which has the lowest productivity and results for the hotel.
How can Aiosell RMS be used to increase hotel business?
Aiosell can be used as All In One RMS + PMS + CM system to perform all the tasks for a hotel, or can be used as only an RMS product integrated with either PMS or Channel Manager or both. Please contact your Aiosell Account Manager to discuss which configuration is most suitable for your hotel / market.
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