Hotel RMS: a guide to choosing revenue management software
An RMS (revenue management system) is software that helps a hotel set the price of its rooms, night by night. This guide explains what it does, how it calculates a price, what it costs and how to choose one for an independent hotel. It is written by Dexlo, which publishes an RMS: the criteria apply to any software.
What is an RMS?
An RMS brings together the data behind the price of a night and turns it into a recommendation. It replaces neither the PMS, which manages bookings and billing, nor the channel manager, which distributes prices to booking sites.
What an RMS usually reads:
- the bookings already on the books for each night;
- the booking pace, compared with previous years at the same lead time;
- reference competitors’ prices;
- the calendar: days of the week, holidays, public holidays;
- events: trade shows, conferences, concerts.
How does an RMS set the price of a night?
- It forecasts demand: how many rooms will be sold by the arrival date, based on existing bookings and their pace.
- It compares this forecast with the hotel’s capacity and with the same date in previous years.
- It positions your price against your competitors’ prices.
- It suggests a price: higher when demand is above normal, lower when it falls short.
- The hotelier approves the price, then publishes it in the PMS or channel manager.
This method is also called hotel dynamic pricing: the room price follows forecast demand, night by night, instead of a fixed seasonal grid.
How much does an RMS cost?
To compare offers, look at:
- the pricing basis: per hotel or per room;
- onboarding fees;
- the commitment period and cancellation terms;
- what is included: PMS connection, competitors tracked, support.
Bring everything back to the cost of one year for your hotel. With Dexlo: €299 per month per hotel, whatever the number of rooms, and €799 of onboarding, once, with no commitment.
How to choose an RMS for an independent hotel?
- Connection: does it connect to your PMS, or else to your exports?
- Control: do you approve each price before it goes to your PMS?
- Reasons: does the software show why it suggests this price?
- Market: which competitors does it track, and who chooses them?
- Missing data: what does it do when data is missing?
- Price: cost over a year, commitment, cancellation.
- Data: where is it hosted, and who can access it?
RMS, PMS, channel manager: who does what?
- PMS
- manages bookings, rooms and billing.
- Channel manager
- distributes prices and availability to booking sites.
- RMS
- helps set the price of each night.
Frequently asked questions
What is the difference between yield management and revenue management?
Yield management adjusts a room’s price according to demand and the time left before the date. Revenue management takes this idea further: demand forecasting, sales channels, customer segments.
What is dynamic pricing for a hotel?
It means varying the price of a night according to forecast demand, instead of keeping a fixed seasonal grid.
Does an independent hotel need an RMS?
Not necessarily. An RMS becomes useful when setting every night by hand takes too long, or when your prices drift from the market without you noticing.