What to ask from an RMS? The 4 key points to consider

by Guillermo Pérez Royo

13 January, 2021

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What to ask from an RMS?

We suggest 4 key points to consider in your decision

Currently, and despite the crisis caused by the Covid-19, many properties are considering including an RMS into their tech stack.

Obviously, and although it won’t be in the short term, we all know that it’ll be a fundamental step in the technological transition of hotels. We’ve already seen this process on many occasions in the past, with the adoption of Channel Managers, Booking Engines and other tools, which were first implemented in large chains.

Little by little, due to their efectiveness, either in the optimisation of management times, or due to the increase in economic benefits they could bring us, their use became widespread and popular, to the extent that today, no property, however small, considers working without such systems.

In the midst of this transition we find the RMS, whose usefulness is not so much in question when it comes to providing a clear advantage for the hotelier (in terms of the design of the pricing strategy, and the capacity to analyse a large volume of data in a short time), but step by step, once they have been implemented in the large chains, it is the small chains and independent hotels that are currently assessing their implementation.

In the heat of this increasing demand, multiple companies have emerged that offer Revenue Management tools (many RMS-Lite), and some of you may find it difficult to differentiate between them, not having worked with such a system before.

Aspects to be assessed

So what are the aspects that we should evaluate before proceeding to hire an RMS?

They could be classified in 4 fundamental aspects:

  1. Integrations

  2. Functionalities & Algorithm

  3. After-sales service

  4. Value for money

The combination of results on these four variables will give us the right answer, but let’s look at each of them in more detail:
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The importance of integrations

On the one hand, system integrations are essential in a medium and long term plan, since technology is constantly advancing: more and more data can be integrated into the algorithms of these systems, which will require more information and will allow us to continue advancing in the maximization of our RevPAR.

Those systems that offer an initial 48-hour integration, certainly don’t have a PMS-certified integration, and automate a series of PMS listings from which they extract the information.

This is very limiting when it comes to progress. It will give us a very short term solution, but won’t allow us to extract crucial data for possibilities that are on the way, such as the calculation of overbooking through the measurement of last minute cancellations, no-shows, etc.

Having official integration with the PMS in the medium and long term will dramatically increase our chances of adapting to the future.

Texto de Odoo y bloque de imagen

Many functionalities or quality algorithm?

When we want to hire an RMS, we usually make a list of available functionalities, to see if they cover all our needs or even offer us some unexpected feature that can improve our processes.

In this regard, you must know how to prioritise: there are many functionalities that different RMS can offer, such as event modules, group displacement calculation, clustering, segmentation, etc. But let’s not be dazzled by many functionalities, as those that are missing from one or another system, with the current speed of development, will end up being present in all of them.

When making a decision as relevant as this one, we’ll make the right choice by opting for that tool that offers us a more reliable algorithm which is therefore able to build a correct forecast and sound recommendations.

Most current systems have based their algorithms on identifying patterns in historical data, and predicting the future by replicating those patterns. This was already the case before the Covid-19 crisis, but the difference between algorithms wasn’t very noticeable in a situation of stability. Now, after this pandemic, this is very clear, as we won’t know whether we’ll return, at least in the short and medium term, to a Pre-Covid situation.

We must clearly opt for systems that take into account the current situation, the behaviour of our competitors in terms of price and availability, but above all, that are capable of putting themselves in the shoes of the guest and measuring the probability that they have of booking one hotel or another, depending on the services they offer and how these are relevant to each customer profile, how they subsequently value the services they have been offered, and whether they consider that they have paid a correct price for it (Price Fairness).

Those systems that are capable in their algorithm of measuring the real situation at any given moment, whatever it may be, and offering us a forecast and correct recommendations, must be our main objective.

After-sales service

It is very common, and many of us have gone through this experience, that after hiring a technological service we encounter certain obstacles and difficulties in obtaining a response to a possible incident: are you familiar with automatic emails with a ticket number, which take several days to follow up? have you needed to speak to a person and only receive automatic replies? are you attended to in a way or language that you find difficult to understand?

In this situation, we can find ourselves with very long deadlines for resolving incidents that lead to frustration and doubt whether we’ve made the right purchase by acquiring this tool. This is something that we often don’t take into account when contracting, and it’s key if we want to get the most out of the investment we made.

We need to take into consideration how we are going to be treated after the acquisition, evaluating those systems that offer us a personalised service, with someone who understands our business well, with their own work systems and case-studies, who knows the sector and the complexity of revenue management today, who follows up and accompanies us, and who isn’t just a simple telephone operator.

RMS image

What about the price?

I have deliberately left this point last, since depending on everything I’ve mentioned above, we’ll have one price or another… It’ll be easy to obtain a much more adjusted price if we contract a system without integrations, with a very basic algorithm and with a deficient after-sales service.

If we make our decision based on price as the main factor, it’s very likely that we’ll end up doubling this important investment in the short term, when we’ll finally be very limited if what we were offered doesn’t cover our needs and we’ll have to change the system, having lost many opportunities and much of our time in implementation and training along the way.

As good Revenue Managers we know that price responds to the value that the product has, and this value bill be sustained according to the  quality of the integrations, the available functionalities, the efficiency of the algorithm and the level of customisation and effectiveness of the customer service.

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