How Smart Hotel Inventory Distribution makes the Hotel Business Profitable

As it said Inventory Management is an art and it is becoming very essential in Hotel Industry. Hoteliers face many challenges in their business and it is becoming difficult to generate the revenue day by day. The fluctuating demands, expectations of the guests, competitors, and OTAs make the life of a hotelier very difficult.

So in this blog, I will like to discuss the role of inventory management in the hotel industry.

Hotel these days distribute their inventories through many channels. And, if the hoteliers do not manage their inventory on all the channel of distribution then the problem of Overbooking and Underbooking arises.

Overbooking happens when you have listed your hotel rooms on different OTAs, on one OTA your room is booked and on other it is still showing available then it gets booked on that OTA too.

Then you will have to say NO to one of the guests and that is lethal for your business. Turning a guest or reallocating his room is leaves a serious negative effect on your customer and then it hampers your reputation in the marketing.

Ultimately your revenue suffers.

Underbooking happens when you list your different rooms on different OTAs. On one OTA, your rooms are going unsold and on other, you get bookings for all the available rooms.

And again your revenue suffers.

When you are already struggling for revenue generation then missing out on the opportunity of the price hike is a crime.

Hotel Industry is all about flexible prices. Whenever the demand is high you should raise your price and get the most out of the high demand season.

Similarly, when there is low demand you need to offer discounts to your customers.

So the hotelier has to be aware of the market trends and manage his inventory accordingly in order to make his business fruitful.

Today there are many channels available for the hotels to distribute their inventory. So to select the right channel and distribution of the inventory amongst these channels is a crucial task.

For an example, if a hotel over allots his inventory to OTA then it will end up in giving a lot of commission hence narrowing his margin and in case if it put inventory for itself then it can end up having unsold rooms.

So a hotel has to manage his inventory in such a way that a perfect balance is maintained and he gets the maximum margin.

There is always a chance of error when everything is operated manually. So it is better to handle some of the tasks to technology.

So to manage the inventory the hotelier can deploy the real-time inventory managing systems. Some of those systems are:

As I said using technology for the operations decreases the error possibility.

Channel Management is a process of managing inventories on different channels. If a hotel has listed a room on many OTAs or channels and that gets booked then each of the channels should get an inventory update to avoid double booking of that room.

Hence, a hotel should deploy a good Channel Manager. 

A channel manager is a software which helps the hoteliers to manage their inventories on different OTAs.

A good Hotel Reservation System such as QloApps provides a lot of facilities for hoteliers.

Hotel Reservation Systems basically allow hoteliers to take and manage online bookings. With the help of a hotel reservation system, a hotelier can give discounts, apply taxes and hike the rates in the time of high demands.

There can be many more features of a hotel reservation system and some of them can be

1. Launch A Hotel Website
2. User-Friendly Interface
3. Easy Booking Process
4. Offline Booking
5. Support For Multiple Languages & Currencies
6. Easy Management Of Rooms

Inventory Management is one of the keys for the hoteliers to increase their revenue generation.

This was my attempt to bring this issue in light and show the importance of Inventory Management. I also tried to suggest some tools that can be beneficial in the course of this task of revenue generation.

You can present your views on the same in the comment box below.

We aspire to serve the hotel industry with our product QloApps and that process we have taken a step forward by launching the QloApps Forum. So please raise any of your issue on our Forum.

For any kind of technical assistance, just raise a ticket.