What is revenue management?

Hotel revenue management involves creating pricing strategies that maximise revenue growth. In order to create a pricing strategy a revenue manager must:

Use forecasting to predict consumer demand and potential high and low yield periods.
Optimise inventory by creating a balanced strategy.
Use traveller segmentation to know who they are attracting to the hotel, and through analysing their needs, habits and motivations, tailor their pricing and marketing strategy to each one.
Optimise their distribution channel mix, taking into account factors such as increased marketing reach versus commission costs and parity issues. This needs an understanding of which channels travellers choose to book through.
Produce reports for hotel management and collaborate on how to market rooms and when to discount inventory.
Define the hotel’s compset and monitor their prices.