Book Discription

NB. This is an Whitepaper written By:   REVPAR GURU 

Best Practices in Hotel Revenue Management
Combining the use of traditional hotel management practices with a new wave of technology for optimum results

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.

With the advancement of technology, the best methods for optimizing hotel revenue management now include much more than the traditional practices of hotels in the past. In fact, in a recent industry survey undertaken by REVPAR GURU, just over 30 % of hoteliers indicated most of their business came from direct/phone reservations and just over 27% reported most of their business came from OTAs and online channels. This shows how the Internet is becoming an increasingly important channel when it comes to hotel bookings, which was not the case several decades ago. Because of this, using a combination of traditional hotel revenue strategies combined with practices that involve sophisticated automated software, allows hoteliers to strategically use up-to-the-minute information to give their property a competitive edge among other hotels and resorts. Additionally, adopting many stock market- based principles allows hoteliers to execute more effective revenue management.
Strategic pricing, rate discipline, automation and smart computing are also integral parts of a successful hotel revenue management strategy.