How Hotels Can Effectively Manage Inventory and Price Better to Maximise Revenue
Want to know how effective inventory management in the hospitality industry can result in maximized revenue?
Over the years, the hospitality industry has grown tremendously, so have business structures and administrative features. In the beginning, inventory management in hospitality industry simply meant the sale or allocation of the number of rooms available.
However, hotel inventory involves more elements than just accommodation facilities for a hotelier nowadays.
It encompasses all of the resources that are used daily in a hotel. A hotel’s inventory includes everything from hotel rooms to bedding and laundry used by housekeeping.
But that’s not all!
A hotel’s inventory also covers food products, diverse technology, amenities, and ancillaries.
When inventory management is not handled effectively, hoteliers could suffer financially because they cannot sell their rooms due to limited stock.
In this blog, you will learn about effective inventory management in the hospitality industry and how a channel manager can help with it and boost sales.
What Is Inventory Management in the Hospitality Industry?
The system or process of acquiring, maintaining, and distributing a company’s business assets or inventory is known as hotel inventory management. This method guarantees that hotels have an ample amount of inventory to meet the wants and demands of their guests.
Here, the primary inventory in the hospitality industry is hotel rooms!
As a hotelier, your job is to ascertain that your hotel has plenty of room availability at such prices that entice visitors to make reservations. If the hotel rooms weren’t available at reasonable rates, they would be vacant, significantly lowering profitability for your hotel.
When we talk about secondary inventory for a hotel, we’re talking about supplies for hotel rooms, cafes and restaurants, and souvenir shops.
For their guests, hotels must have sufficient toiletries, linens, blankets, and other important supplies on hand. Furthermore, they should have adequate food for guests based on their preferences and popular products to order or buy so that nothing goes to waste.
Therefore, efficiently managing hotel inventory could lead to higher revenue sales, and mismanagement could lead to financial loss.
How to Effectively Manage Hotel Inventory
Generating and managing demand and maximizing returns are part of effective hospitality inventory management. A hotel’s investment is bound up in its rooms, and the profits can only be gained by selling those rooms efficiently.
Below are a few hotel inventory management systems and method:
Pricing in a flexible and intelligent manner
Pricing intelligently can work in your favor and result in an increased return. To ensure that hotel rooms are rented, you can increase earnings by raising prices during peak demand periods and lowering prices when the demand is low.
Businesses in the hospitality industry can provide targeted discounts and promotions during changing seasons by using a dynamic pricing strategy.
Distribution of hotel rooms
Hotels frequently advertise their rooms through several channels, to improve reach and promote sales, such as online travel agencies. Distribution planning is fundamental, and it includes determining the minimum number of rooms that each online distributor must be allocated for selling.
As a result, you’ll be able to make more informed decisions about where to advertise vacant rooms to drive sales or where to redistribute cancellations.
Segmentation of the market
It is essential to understand your industry and clients and their diverse interests, desires. It is also beneficial to understand how to price and distribute your hotel room sales across the various online channels.
This technique not only helps you manage your existing hotel rooms, but it can also help you attract more customers and promote sales and revenue.
Understanding your guests and accommodating their demands and expectations is vital in establishing loyalty and ensuring profitability. Hence, being flexible is an important trait expected of hoteliers.
However, for the growth and success of your hotel business, a hotel inventory software such as a channel manager is an important tool. It can aid in effective inventory and revenue management, and distribution plans.
Whether you run a small-sized hotel or a chain of hotels, it’s necessary to keep your inventory in front of prospective customers on all occasions.
After all, visitors can’t book a hotel they don’t know about!
Therefore, you must first understand what a hotel channel management system is.
What is a Channel Management System?
The procedure of monitoring and controlling the allocation of hotel room pricing and availability across various online booking channels is known as channel management.
These channels typically include Online Travel Agencies (OTAs), online booking sites, travel metasearch engines, and Global Distribution Systems (GDS). Hoteliers can use a channel manager system to handle inventory across multiple hotels or properties and multiple channels.
How Channel Manager Works in the Hospitality Industry?
In the hospitality industry, channel management software for hotels updates the distribution data of your hotel in real-time across all of your integrated channels. When you make an update to your room rates in your hotel channel manager dashboard, it will be gets reflected across all of your integrated booking sites automatically.
And when you receive a new reservation from an online travel agency, it will be is reflected in your online channel manager.
With this, the vacancy in that room will be closed instantly across all other distribution channels. The same process happens in this the case of a cancellation as well.
By employing “pooled inventory,” a channel manager software can also eliminate incorrect pricing updates or double reservations. This functionality consolidates inventory into a centralized point so that all bookings are pulled from a single “pool” based on real-time vacancy updates.
Using hotel channel manager software has numerous advantages that can help you boost your hotel revenue.
How to Maximize Hotel Revenue Using a Channel Manager
Below are a few of the advantages of employing channel management in the hotel industry:
Increases your online visibility globally
A hotel booking channel manager enables you to integrate with several online travel agencies, allowing you to reach out to tourists from around the world. Listing your hotel on multiple platforms boosts your online presence, allowing you to reach more potential guests.
When monitoring hotels manually across various sites, updating multiple times per day every time a room is reserved becomes necessary. If it is not updated in real-time, it could lead to inaccuracies and losses. This could result in a few common challenges, such as overbookings and double bookings.
A channel manager overcomes these inefficiencies by automatically updating data across various platforms in real-time.
Increase commission-free direct bookings
An easy to use channel manager offers a booking engine that can help increase direct bookings, which are more profitable for hotels, and minimize overbookings and double bookings. There is no debate that online travel agencies are fantastic for attracting prospective customers, but acquiring reservations from online travel agencies involves parting with some commission.
Most visitors will find your hotel through an online travel agency platform, but they would want to learn more about your hotel and its services before making any reservation. This can push them to visit your hotel’s website before deciding to book their stay.
If they are impressed, they might make a reservation from your hotel’s web page. This way, you make a direct sale, which means more profit for your hotel.
A booking engine with channel manager allows hotels to increase their visibility in several channels while also enabling guests to book directly through the hotel’s website.
Get the Best Channel Manager for Small Hotels
Our channel manager can update your hotel’s inventory and room pricing with only a few clicks. It allows you to see all of your hotel room reservations at once. You can very conveniently confirm, cancel, and monitor all of your reservations from multiple online travel agencies in one place.
Moreover, with over 29 currencies, you will never have to lose a reservation from any part of the world using our channel manager.
Request our channel manager demo, experience its various benefits and decide accordingly.