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What is the definition of Hotel Revenue Management?

What is the Definition of Hotel Revenue Management?

In this article, we will go over the definition of what is revenue management in the hotel and hospitality industry. Additionally, we will be covering the fundamentals of revenue and yield management.

What is the meaning of Revenue Management again?

Selling the Right Room to the Right Client at the Right Moment at the Right Price

We would like to add the following to that description:

On the Right Distribution Channel with the best commission efficiency

Revenue Management

Hotel Revenue management helps to predict consumer demand to optimise inventory and price availability in order to maximize revenue growth. The purpose of Revenue Management is not to sell a room today at a low price to sell it tomorrow at a higher price. Revenue Management also means selling a room at a low price today if you do not expect higher demand.

Hotel Revenue Management challenges the resources in the importance of gathering information about the market so that you can be proactive and not reactive. Use the information to divide your market and adjust your products through distribution, to the right customer at the right time and at the right price.

Hotel Revenue Management is a concept that not only maximises in high period demand, it helps stimulating demand in low periods while avoiding pricing cannibalism. Revenue Management is long term strategic, takes all revenue with its profitability into consideration, can sell low rates even in a high demand period.

The Basis of Revenue Management

What makes hotels suitable to be able to apply Revenue Management

  • fixed capacity
  • perishable product
  • high fixed costs and low variable costs
  • product can be priced differently
  • demand evolves
  • product can be sold in advance
  • market can be segmented

Revenue Management started with the Airline Industry. But today many more industries use Revenue Management:

  • Hotels and Resorts
  • Car rental, Train companies
  • Theatres, Cinema
  • Restaurants
  • Gyms, Spas, and Beauticians

In essence, almost every industry would benefit some ways from the purposes of Revenue Management techniques. Learn how to manage revenues with skill, find out how to maintain optimum levels of profitability, and gain skills to make an immediate impact at work. Book online our course today! Revenue management courses.

Hospitality Glossary Terms

Hotel Revenue Management Glossary Terms that start with the letter A

Hotel glossary terms beginning with B

Hotel management glossary terms beginning with D to E

Hotel management glossary terms beginning with F

Hotel Management Courses

Hotel Revenue Management Course

Hotel Forecasting

Hotel Overbooking Strategy


Would you add anything to the way we define revenue management? Please add your comments below …


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