A Revenue Management System (RMS), also sometimes called in the past a Yield Management System (YMS) is a complex software application that relies on statistical algorithms and machine learning to analyze market data and automate the process of pricing and inventory planning. While Revenue Management is the strategy, the RMS is the tool that executes it, feeding massive amounts of historical data, competitor rates, and booking trends into it to calculate the optimal price for every room or seat, every single day, often up to 365 days in advance.
The main value of an RMS is the ability to process the complexity, which the human brain cannot. A hotel with 200 rooms that sells 365 days out has 73,000 possible room price points to be aware of. An RMS accomplishes this in a continuous loop:
A modern RMS does not only do dynamic pricing; it also manages Inventory Controls (fences). Sometimes the best strategy is not to increase the price but to limit who can make reservations.
Next-generation RMS tools are abandoning room types (e.g., Standard King) in favor of attribute-based selling. Instead of pricing the room, the system prices the features.
The RMS calculates the value of the balcony attribute and not just the category of room.
Yes, the vast majority of systems have an Autopilot or Auto-Publish mode where the changes in rates are published to the web without requiring human approval. However, most revenue managers prefer to leave it in Recommendation Mode for critical dates (like major holidays) when they want to manually check the strategy.
Historically, no, because they were too expensive. Today, there are cloud-based, lightweight RMS tools specifically for small properties. The ROI is typically high; even selling one room at a higher price of $50 more per night can cover the cost of the software subscription.
A Rate Shopper only tells you what your competitors are charging. An RMS is to tell you what you should charge based on your own supply and demand, irrespective of what the competitor is doing.
Leave your request
We will contact you shortly
Thank you for your request!
We will get back to you as quickly as possible
