Guide to Revenue Management
By definition, hotel revenue management is a discipline that optimizes revenue by strategically managing a property or group’s room inventory and pricing based on predictions about consumer demand. It means deciding when to sell a room, and at what price.
Basic strategies include maximizing revenue during high-demand periods and stimulating demand during low demand periods. Revenue management relies on market data and its past and current trends; but data is not enough.
A revenue manager must understand and consider many factors, such as changes in consumer behavior, the roles of various distribution channels, and the specific set of competitors in his or her market. The manager also needs to know how to use segmentation, create forecasts, and implement pricing models. Having an overall understanding of the property or group’s market, position, and strategy allows a revenue manager to be proactive rather than reactive.
