White Paper: Best Practices in Hotel Revenue Management
08 December 2010
The hotel industry, like many businesses is full of uncertainty. Sales can depend on a complex combination of factors that can be affected by anything from customer service to bad weather.
Because of this, it is crucial to the success of a property that its owner and managers remain completely attentive—not to mention, strategic—when it comes to hotel revenue management practices.
Revenue management, also called yield management, in hotels is a practice that has evolved significantly in its rather short history. The practice was first implemented by hotels in the late 1980s, after the airline industry demonstrated great success using inventory, capacity and pricing to ‘manage’ revenue. Since then, revenue management has become one of the most essential and identifiable aspects of the hotel operating strategy. However, it is apparent that
today’s brand of hotel revenue management differs considerably from that of 20, or even 10 years ago.
While strategies such as detailed historical analysis and emphasizing occupancy and ADR may have dominated revenue managers’ focus two decades ago, stock market-influenced algorithms and changes in the general approach to pricing strategy, channel management, inventory allocation and the use of information as pertains to revenue management have all greatly evolved.
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