Using Your PMS to Improve Occupancy Rates | Hotelogix

The importance of inventory management in the hospitality industry should never be understated. This is one of the most effective ways to maximize your organization’s revenue. However, you must be aware of the most effective strategies to manage inventory in the hotel industry.

Several methods lead to effective hotel inventory management, and we’ll discuss them in this article.

What Does Inventory Management In the Hospitality Industry Mean?

Hospitality inventory management means having a firm understanding and control of the availability of the rooms in your hotel. It may sound funny, but hotel rooms are considered a form of perishable inventory.

You’re probably used to hearing that term in the food and beverage industry. However, if you think about it, the term fits in the hospitality world. After a certain time, you lose the ability to rent rooms. This is the exact definition of perishable inventory.

If hotels want to avoid losing revenue because of failing to sell perishable inventory, there must be an efficient hotel inventory management system and method in place. You need to control room inventory in hotels, and this takes an understanding of trends and forecasts.

Before understanding the best methods to manage inventory control in the hotel industry, you need to be aware of the main factors for room inventory management.

Main Factors of Hotel Room Inventory Management

What are the main factors that influence inventory in the hospitality industry?

Calculating Room Costs

Managing room inventory in hotels means having the ability to calculate room costs. There are fixed costs that influence the price of your rooms. These fixed costs include:

  • Electricity
  • Water
  • AC/Heat
  • Overhead expenses
  • Payroll
  • Internet

There are also variable costs that fluctuate depending on season changes. These include things like laundry, housekeeping, breakfast, bars, and room service.

You should keep a healthy balance between covering costs and yielding inventory during busy periods. This will allow you to maximize your revenue.

It’s also important to keep in mind that selling a room through your direct booking engine or website won’t be the same as a sale through an OTA. These costs will differ, and you’ll have to pay the OTA a commission, which all needs to be accounted for.


Pricing is a factor that will fluctuate more than any other element. During your busiest seasons, you need to get the most value out of every room. When the slow season arrives, offering discounts may increase demand and sell inventory. This pricing strategy influences the supply and demand during either season. Lowering and increasing prices optimizes inventory and allows you to obtain maximum occupancy for the most revenue.

Study the competition and adjust your rates to be competitive with theirs. This simplifies your revenue process and makes guests feel like they’re getting the best deal possible.


Getting your inventory into the hands of travelers who need rooms maximizes revenue and is a process known as distribution. It’s hard to imagine a hotel that’s not listed on multiple OTAs and metasearch engines these days. This is an element of distribution.

However, monitoring your distribution channels takes a significant investment of time and money. Uploading your inventory across different channels and tracking data can be time-consuming. Using software to automate this can improve your element of distribution.

Monitor different channels to make sure you’re selling the minimum number of rooms. Apply promotions when needed to optimize the distribution of your inventory.

Market Segmentation

It’s critical that you understand what market segmentation means in order to establish prices or distribute inventory among different channels.

Market segmentation refers to demands, preferences, and what people are willing to pay across different markets. For example, what someone is willing to pay at a five-star hotel in Los Angeles isn’t what someone is willing to pay for the same hotel room in Nebraska.

Understanding the market allows you to price your rooms accordingly across the most appropriate channels. It’s also critical that you adapt to your customers’ preferences to increase brand loyalty to maximize revenue.

Managing Hotel Inventory to Maximize Revenue

In this section, you’ll learn how to manage your inventory to maximize your revenue effectively.

Collect and Use Data to Predict

Using data-driven decisions is probably the single most important element when it comes to maximizing revenue. When any hotel sets rates and allocates inventory, these decisions should be made based on trends and using data to accurately forecast customer behavior. This also allows you to create promotions based on consumer segments.

Using an Integrated System

Using hotel inventory management software is an effective way to maximize your revenue based on availability. Your PMS should allow you to keep tabs on every aspect of your hotel. This includes room rates, inventory, and the overall performance of the entire staff. You can integrate this tool with channel managers and a revenue management system to create an automated workflow. This is one of the best ways to maximize your revenue.

Take Advantage of OTAs

You need a strong online presence to get the most out of your inventory. Utilizing OTAs across multiple channels allows you to boost visibility and reach new demographics. The end result here is another opportunity for maximum revenue.

Embrace Mobile

Initially, embracing mobile means investing in new platforms and mobile apps. However, this investment will pay dividends for your hotel in the end.

When you embrace mobility in the hospitality industry, you take your organization to the next level. Your staff becomes more efficient and flexible. Remote communication with guests becomes possible, leading to better customer service experiences among guests.

Room availability and occupancy can be monitored remotely, and staff can communicate with each other in real-time across departments. Having all of these advantages increases the efficiency of your organization and, in turn, maximizes revenue.

The three main pillars of hotel inventory management are price, distribution, and market segmentation. When you keep these three elements in mind and give them the proper attention, you increase your chances of avoiding losses through perishable inventory.

Using the appropriate property management software, integrated with other tools, will also promote an atmosphere that leads to increased revenue. Having all of these elements in place is a surefire recipe for success.

Need Help?

If you need assistance in any of the previously mentioned areas, Hotelogix can help. Inventory management, channel management, and other tools are available to help you maximize revenue.

Contact one of our representatives to find out how we can take your organization to the next level.