What are the Benefits of Inventory Management Software

Managing a hotel is no simple task. It encompasses a collection of several tasks and procedures required to track many different moving parts. One particular part handles all the goods purchased and provided by the hotel.

Inventory is one of the largest assets in any business. Inventory consists of a list of items that the hotel intends on selling. This can look like goods, perishables, and other properties necessary for the best guest experiences. Managing this inventory with sheer manpower means workers manually update stock levels. These updates can be seen on physical copies of inventory counts used to check inventory whereabouts.

Today, hotel inventory management software is available to automate these processes and patch any holes in the system. There are dozens of benefits of inventory management software seen by hoteliers everywhere. In the world of hospitality management systems, this one is another necessary inclusion to your hotel.

What is Inventory Management?

Inventory management is a vital element in the supply chain of a business. It involves the process of purchasing, stocking, selling, and reporting the inventory collected by a hotel. This process involves controlling and tracking stock from start to finish; from the warehouse to the guest’s room.

Hotel inventory management governs the flow of goods to ensure your hotel always has what it needs when it needs it. Inventory management requires constant transparency of the revenue and guest relations. This is so it can produce the most accurate analytical models and reports for optimized marketing tactics.

Managing inventory means knowing what to order, when to order it, and where to put it. Here are the basic steps:

  1. Purchasing: Goods can be bought from vendors and manufacturers. They can either be ready-to-sell or come as raw materials that turn into sellable products.
  2. Stocking: Inventory needs to have a place to live until it’s ready for display or selling.
  3. Profit: This is when the controlled inventory can be pushed to guests for payment.
  4. Reporting: Hotel management needs to be able to see stock levels and inventory trends to make an informed decision on how to start at 1.

With this model of functionality, inventory management can apply to all types of hotel inventory. This can look like raw materials for product creation or WIP (work-in-progress) items. Linens and toiletries would be considered finished goods ready for sale. Maintenance, repair, and overhaul (MRO) inventory consists of all the tools necessary for the proper maintenance of daily activities.

With hotel inventory management software, a hotel could revamp its inventory department. Wrangling the many types of hotel inventory from point A to point B is the name of the game for inventory management software.

Why is Inventory Management Important?

A hotel has many different types of inventory necessary for consistent surveillance. From perishable inventory in each room to for-sale goods in your lobby, hotel inventory is everywhere. Keeping up with everything at once can make sure your hotel never goes without.

Nobody likes to hear that something is not available for them when they need it. Guests expect you to always have the right answers and quickly have what they want before they realize they want it. Without proper inventory management, you’re left guessing the next big purchase. This can be a costly oversight when you’re dealing with a big order of an item that you don’t need more than a dozen of.

Speaking of costly errors, hotel inventory management software can help you analyze your inventory to prevent losses due to theft. When the main goal for your business is growing, you’d be better off investing in an inventory management system to keep moving forward.

Inventory Management Techniques

There are some common techniques used in inventory management that are helpful to hotels of any size. When you want to take the reigns of your stock, you can apply these tactics:

  • ABC Inventory Analysis: This strategy classifies inventory into 3 tiers. A-goods are the most valuable. B-goods are neither the most nor the least valuable. Finally, C-goods are for small purchases.
  • JIT Inventory: Just-in-time refers to only ordering goods from vendors on a needed basis. This helps reduce storage and holding costs to enhance your inventory turnover rate.
  • Cycle Counting: This checks and balances tactic involves counting a small amount of physical inventory each day. The idea is that you’ll count the rest of the inventory, effectively reaching your full cycle.
  • FIFO: First In, First Out uses the oldest purchased goods to determine the profit on the sold items. In a hotel, this method may be used for perishable inventory.
  • MRP: Materials Requirement Planning is performed after having the most accurate sales records from manufacturers.
  • DSI: Day Sales of Inventory is a method that uses a financial ratio to determine the average time it takes a business to turn its inventory.
  • Reorder point formula: Hotels use this formula to find the lowest amount of stock they have before they need to reorder.
  • EOQ: Economic Order Quantity is a technique that calculates the number of units a hotel should add to its inventory each time. This is done to minimize the total costs of inventory, assuming there is a booming guest demand.
  • Safety stock: To spite minimal warehouse space, safety stock inherits the stigma that there should always be extra stock set aside in case of emergency.

Why You Need an Inventory Management System

Hotel inventory management systems can solve any problem with your inventory processes. From controlling the inventory to turning it out to guests, this software can revolutionize your hotel spending.

Your manual system for inventory management is extremely vulnerable to human tracking and decision-making errors. Hotel inventory management software can help hotel managers effectively manage their inventory without compensating for costly mistakes.

Inventory management software is ideal for hotel managers looking to save time and money. Several inventory processes can be handled seamlessly with this software. These tasks include those that require lots of manpower and drain your labor costs.

You will feel more comfortable relying on inventory management software. This is due in part to the fact that your most critical inventory workflows are handled simply and immediately.

Inventory management systems are necessary to professionally facilitate:

  • Order management:Inventory management takes the responsibility for ordering based on tracking and receiving orders.
  • Supply chain management: Inventory management follows the flow of products from the warehouse. Demand, planning, fulfillment, and everything in between are handled with hotel inventory management software.
  • Warehouse management: With inventory management software, warehouse operations are always automated for inventory visibility.
  • Inventory optimization: Transparency provided by inventory management systems allows you to move your inventory efficiently.

Benefits of Using an Inventory Management System

Hotel inventory management software can consistently modernize the inventory processes. Managers appreciate the extra time available to focus on reconditioning more important matters.

Other benefits for hotel managers include:

Keeping Guests Happy

Inventory management systems can create an automated response to product fulfillment. An uptick in pace regarding product availability is noticeable to guests. When you can reliably handle orders and deliver an efficient quantity of items, customers take notice. The happier they are, the more they’ll come back.

Exponential Growth

As the hospitality industry adjusts to market changes and trends, inventory software helps hotels scale. You get an inside look at the inner workings of your hotel. Leveraging this inventory data allows you to keep control of your system at all times. With this automated system in place, you have more time to focus on expansion.

Avoiding Human Errors

Streamlining workflows is a game changer for hoteliers. Inventory management software augments the work of hotel staff by doing just that. It takes the inventory processes and handles the workflow with ease, speed, and accuracy. The less human error that occurs, the more profits you’ll notice.

Reducing Business Costs

Warehouse space in the US costs about $5.08 per square foot. To utilize this space efficiently, inventory management is used to monitor item movement. When everything is automated, a hotel can pay more attention to where its money is going.

Dynamic Pricing

Hotel inventory management software can increase your revenue by taking inventory trends into account. Tracking tools help you find the best prices for daily or seasonal prices. This is based on historical inventory data and quality analytics.

Detailed Reporting

Intelligent software can provide hotels with the most accurate models of inventory data. From inventory management, hoteliers can get a grip on the industry, marketing trends, and pricing needs. Algorithms work consistently to deliver comprehensive reports with the most recent data aligned with your hotel.


Hotel inventory management software brings value to a business in accommodation. There are many different solutions out there that can drive business requirements for hotels. Not every system is built alike. The trick is to find the best one tailored to your unique needs.

The best inventory management software will scale your hotel. In-depth analysis and opportunities for growth are other features you should pay attention to. Overall, your inventory management software should be able to cover all the bases for a successful business.