Hotel inventory is a vast field that can differ widely from one hotel to another. However, there’s one common element, regardless of their size, their target audience, etc.; hotel inventory management. Although it may seem complicated if you don’t know anything about it, it is not.
Hotels have so many things to offer but rooms are the main product. Without a proper management system, control and managing tasks become more difficult and that can affect the hotel’s revenue. In this article, we are going to explain what is hotel inventory and its management, the main features. Let ‘s start!
What is hotel inventory?
In its origins, the term ‘hotel inventory’ only meant the quantity of rooms and beds available to its distribution or booking. Nowadays, this concept goes far beyond room occupancy.
Hotel inventory can be classified in two types: primary and secondary. Primary inventory refers to the main source of revenue, the rooms, the occupancy of them and the availability. Secondary inventory is a broad category that includes all assets used on a daily basis in a hotel: from restaurant supplies, to gift shops or external services.
And what about hotel inventory management?
Hotel inventory management is the process of maximizing revenue and profitability by creating and managing the demand, pricing and distribution of hotel’s products and services. To prevent time-sensitive inventory from expiring, hotels must be able to balance supply and demand.
Benefits of hotel inventory management and its importance
Hotel rooms are often not seen as a perishable product, but in some way they are . If they are not booked for one day, it is an opportunity that we will not get back again. Inventory management is directly connected to hotel’s revenue. Here are just some of the many benefits of hotel inventory management:
- Dynamic pricing. One of the benefits is the use of a dynamic pricing model. The company can efficiently track the ongoing use of its assets on a single screen in real time when using an inventory management system or software. With it, they can predict when to raise and low prices based on different factors.
- Time management. If the products are tracked and ordered, the staff will spend less time tracking all those small details. It increases productivity by freeing up time and helps focusing on creating unique guest experiences.
- Prevent overbooking: in order to forecast overbooking, the hotel must collect accurate data to help create an inventory strategy. Thanks to hotel inventory management, the company can identify customers patterns and create a detailed room inventory model to target specific clients.
What are the main elements of hotel inventory management?
- Pricing. This element is mainly focused on the primary inventory. Using dynamic pricing, companies can ensure that rooms are booked regardless of the season, or achieve greater profitability based on demand.
- Distribution. Rooms are not going to sell on their own, so it is necessary to reach the maximum possible number of the target customers. The company has to know which are the channels most used by their guests and make sure to sell the minimum amount of rooms at any given time for every channel. This would make sure to list unsold rooms.
- Segmentation. No matter how well the two previous points are developed, you will not get anywhere without understanding your target market. You have to pay attention to market segmentation in order to identify best offers, booking channels, etc. Knowing what the customers want is fundamental to be successful.
How to efficiently manage hotel inventory to maximize revenue
The operation of each hotel is different even when they belong to the same holding company. To achieve success, though, they all follow a set of guidelines or basics that help them achieve their goals.
- Collect and use data. You have to catalog every inventory item available at your hotel. By periodically monitoring inventory, adjustments can be made in anticipation of peaks and drops in demand. This way, the hotel will know which channels generate the most revenue and when.
- Have an integrated system. Just because something has been done by manual all your life doesn’t mean it can’t be done better. Digitilazing your company’s inventory systems can lead to better performance. A properly integrated system allows you to supply and maximize occupancy and revenue by systematizing all the processes required to manage a hotel.
- Use Online Travel Agencies (OTAs) to your advantage. OTAs attract a huge amount of people and also have a large marketing budget. So, instead of “fighting” them, hotels should take profit from them by letting them promote your hotel’s brand.
What is a hotel inventory management system?
We have talked about property management software (PMS) and how hotel management uses it to manage the daily activities of their hotels. Hotel inventory management system/software is not very different from it, but not enough to handle all the tasks that inventory management requires.
Perhaps the front-desk team uses one system, another for activity reservations, a different one to control hotel revenue. Is it worth having everything separated rather than integrated into a single system/software?
There are dozens of applications that promise an improvement on hotel inventory management but a very few are capable of unifying everything into one and only system. Goguest connects and centralizes all PMS, Point of Sale (POS) and third-party software.
Real-time tracking and data collection are other advantages of hotel inventory management software. It allows you to segment and create more visual analytics to understand and manage your inventory.
Inventory can be affected for a number of reasons, but the most common is near-arrival cancellations.
A channel manager and a revenue management system are two of the most powerful assets. With Easygoband you can integrate your Revenue Management System (RMS) in the same system. A channel manager is the technology tool that allows you to sell rooms on several online booking platforms (channels) at the same time.
Let’s draw some conclusions
One of the keys to success is knowing what is going on around you. If you don’t know the availability your hotel has, how much of any product is left, which activities are the most booked, which rooms are the most purchased, it will be difficult to satisfy all customers.
To achieve this, we have to let ourselves be helped by the tools that today’s technology offers us. Software such as Goguest, integrates everything that hotel management needs, like hotel statistics, PMS, POS, to facilitate the work of the employees.