Updated: May 30, 2020
With several hoteliers puzzled when it comes to Hotel Revenue Management, significant segments of the industry are still not entirely convinced of its value. Therefore, other than discussing why it should be a required part of your hotel's processes, let's start with some elementary questions.
What is Hotel Revenue Management? Why is it so successful in the hospitality industry?
Practically every industry on the market adheres to one or other types of revenue management-- some refer to it as a business rationale or pricing techniques, but the goal is the same: to improve financial outcomes by maximizing available resources. When it comes to hospitality businesses, however, three factors make revenue management highly fitting:
Perishable Items: Unsold suites/rooms perish each day if remained unsold.
Limited stock: There are a set number of suites available up for sale.
Customer Demand: Visitors are ready to pay different rates for the same room.
Typically, Hotel Revenue Management is the strategy by which a hotel arranges its inventory rates based on previous year sales records and prevailing trends. Historical data and other forecasts means are essential tools for adjusting room prices. Rates should not be overpriced to fright the prospective client or underpriced to yield minimum profits. The Hotel Revenue Management approach allows the hotel's business to maximize their bottom-line by obtaining the best value for every sale.
The ever-changing dynamics of the hospitality industry means that Revenue Management today is more sophisticated, complex, and analytical. Hence, hotel industry managers are finding it more challenging to equal emerging trends, the significance of a robust revenue management approach has now become vital in the modern scenery.
RevOptimum is the industry-leading, remote Hotel Revenue Management service provider that focuses on driving maximum hotel room earnings and yields higher bottom-line profits at any level of demand. RevOptimum's services increase client's properties exposure with boost deployment, content review, increased distribution, and maximum profits.
Mia Belle Frothingham
Global Chief Marketing & Brand Strategy Officer for RevOptimum.
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