Revenue management

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Revenue management

The primary goal is to maximize hotel revenue by taking advantage of available pockets of occupancy demand. Many hotels and major franchises or Revenue management membership type affiliations take revenue management very seriously and have people dedicated to the process; while others leave the responsibility to local management, the front office, or reservations department.

The sad part is that many people, with the revenue management title, have never been trained nor provided with the tools and goals of their job. Their commitment to revenue management has contributed to their great success as a company, one of the many benefits of being a member of this fabulous group of hotels.

The way I see it, no matter who is Revenue management with this important responsibility, revenue management can make a serious impact on your bottom-line. There are several important elements of revenue management, but none more important than knowing your competition.

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Many years ago, I worked for an owner who constantly reminded me that increased occupancy had its own associated increases in expenses; linen, disposables, housekeeping payroll, etc. Revenue management is a combination of art and science.

It takes work and dedication. The first step is to know your competitive business environment.


The way I see it, there is no better way to begin the process of revenue management than to understand your competition. I can think of no better way to begin that process than to subscribe to Smith Travel Research weekly and monthly reports.

Smith Travel Research compiles data on occupancy, average rate, and revenue-per-available room for your hotel as compared to your competition. The way I see it, too many hotels, especially independent ones, place themselves in a box by ignoring competing hotels.

Traditional Revenue Management Traditional revenue management involves the adjusting of rates and hotel inventory based upon room demand. These adjustments are usually dependent upon current reservations, historical data, forecasting, and a good measure of gut-instinct; the art in revenue management.

In traditional revenue management, discounted rate tiers are closed as occupancy increases. Historical data may also indicate that a certain period has high demand even though reservations may be weak at the current time. Basically, as occupancy increases, rates available for sale should also increase.

Many hotels build this base with discounted group business; dedicating a portion of their rooms to groups, actually enables the hotel to end up with stronger average rates overall.

This would be a very simple process except that revenue management should be applied to group bookings as well. One of the factors affecting good revenue management is the fact that many hotels accept too many group rooms at deeply discounted rates.

On the other hand, this is the same hotel which will do nothing when reservations appear stronger than anticipated. The way I see it, revenue management need not be a complicated process in order to be effective. Sometimes our industry tends to magnify the complexity of various tasks.

Revenue management

Revenue management is a learned process, but you need to assign it to someone who has a legitimate interest and curiosity for numbers. If there is no one on staff with this knowledge, there are many outside authorities who can handle training.

The return on this modest investment can be huge.The biggest challenge facing the hospitality industry over the next 5 years is the lack of integration between the key commercial disciplines of sales, revenue, distribution and finance and the negative impact this will continue to have on delivering asset value and maximum profitability.

Become a member

Revenue management is of especially high relevance in cases where fixed costs are high as compared to variable costs. The less variable costs there are, the more added revenue will contribute to overall profit. This makes revenue management perfect for the hotel industry.

Revenue management is key to any business that has relatively fixed capacity, perishable inventory, and time-variable demand. This course introduces you to the basics of revenue management in the hotel industry: how to apply pricing and length-of-stay tools and how to .

Revenue management

Our business support systems & billing platforms form a foundation of our industry-leading revenue management solutions.

Learn more about CSG revenue management. The Artiva HCx™ solution is a complete revenue cycle management package that provides a single, integrated platform for all of your data systems, embedding key analytics and product solutions to eliminate extra steps while representatives work accounts at the right time to maximize revenue .

Our unique revenue management simulator will enable you to experience hands-on management of your own airline in a competitive environment using the full range of tactics and features of a complex revenue management system.

IATA - Revenue Management