What is RMS?
RMS = Revenue Management System
Software that analyzes demand patterns, competitor rates, and market data to recommend optimal room pricing. It helps hotels maximize RevPAR through dynamic pricing.
What Does an RMS Do?
- Demand forecasting: Predicts future occupancy based on historical data
- Rate recommendations: Suggests optimal prices for each day
- Competitor monitoring: Tracks competitor pricing (rate shopping)
- Dynamic pricing: Adjusts rates based on demand signals
- Inventory controls: Recommends MLOS, CTA restrictions
- Performance analytics: Tracks RevPAR, ADR, pickup pace
How RMS Works
- Collects data: Historical bookings, market data, events, competitor rates
- Analyzes patterns: AI/algorithms identify demand patterns
- Forecasts demand: Predicts occupancy for future dates
- Recommends rates: Suggests optimal pricing per room type, per day
- You approve/auto-push: Review recommendations or auto-update rates
- Updates channels: New rates push to PMS and channel manager
RMS vs Manual Pricing
| Manual Pricing | RMS Pricing |
|---|---|
| Based on intuition | Based on data & algorithms |
| Update rates weekly/monthly | Update rates daily or real-time |
| Same rate for weeks | Different rate for each day |
| React to demand | Anticipate demand |
| Limited competitor tracking | Continuous competitor monitoring |
| Time consuming | Automated recommendations |
Example: A wedding in town next weekend. Manual pricing might miss it. RMS detects unusual booking pace, competitor rate increases, and local events - recommending a 30% rate increase 2 weeks in advance.
Does Your Hotel Need an RMS?
| Hotel Size | RMS Recommendation |
|---|---|
| Under 30 rooms | Basic rate shopping tool may suffice |
| 30-100 rooms | Entry-level RMS beneficial |
| 100+ rooms | Full RMS strongly recommended |
| Multiple properties | Enterprise RMS essential |
Popular RMS Options
| RMS | Best For | Price Range |
|---|---|---|
| RateGain | Indian mid-market hotels | ₹50,000+/year |
| IDeaS | Large hotels & chains | Premium |
| Duetto | Full-service hotels | Premium |
| Atomize | Small-mid hotels | ₹30,000+/year |
| RoomPriceGenie | Small independent hotels | ₹20,000+/year |
Key Metrics RMS Optimizes
- RevPAR: Revenue Per Available Room - primary optimization goal
- ADR: Average Daily Rate
- Occupancy: Percentage of rooms sold
- Booking Pace: Rate of reservations coming in
- Length of Stay: Average nights per booking
- Lead Time: Days between booking and arrival
RMS Integration Requirements
For RMS to work effectively, it needs to connect with:
- PMS: For booking data, occupancy, revenue
- Channel Manager: To push rate updates to OTAs
- Rate Shopper: For competitor pricing data
- Event Calendar: Local events, holidays
Start Simple: If full RMS is beyond budget, start with a rate shopping tool to track competitor prices. Manual revenue management with good data is better than no revenue management.
Revenue Management Without RMS
If you can't afford an RMS yet, practice these fundamentals:
- Track competitor rates: Check 5 competitors daily
- Monitor booking pace: Compare to same period last year
- Calendar events: Mark local events, holidays, conferences
- Segment pricing: Different rates for business vs leisure
- Weekly rate reviews: Adjust rates based on pickup
- Use MLOS: Minimum stay during peak periods