Revenue Management For Hotels: Explained



While it may help you to keep things running, this way of running a hotel will never help you find success.

Organization, planning, and strategy are important to every business, and hotels are no exception.

But in the hospitality industry, this takes the form of Revenue Management.

This is what a lot of hotel owners think about running a hotel:



Sell as many rooms as possible.

Sell to as many customers as possible.

Hope for the best.



What is Revenue Management?

Strictly going by definition, it means:

“Selling the right room, to the right client, at the right moment, for the right price, through the right distribution channel, with the best cost efficiency.”


What does that mean?


Well, let’s take a look at the characteristics of a hotel:


Fixed capacity of rooms.

Perishable products (limited number of hotel rooms).

Product prices can vary.

Product can be sold in advance.

Lower variable costs, high fixed costs.


Revenue Management involves using analytics and performance data in the metrics mentioned above to accurately predict guest demand and make better decisions regarding dynamic pricing and inventory (the availability of specific rooms and their distribution).



Why is it important?

The number of hotel rooms is limited, but the demand might not a...



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