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What is Hotel Revenue Management?

What is Hotel Revenue Management?

Hotel Revenue management is an extremely important concept within the hospitality industry because it allows hotel owners to anticipate demand and optimise availability and pricing, in order to achieve the best possible financial results. In this article, we will answer the question of ‘what is revenue management?’ and explain the importance of adopting a revenue management strategy of your own.

Defining Hotel Revenue Management

In order to understand hotel revenue management, we must first define it. Within the hotel industry, the widely accepted definition is: “Selling the right room, to the right client, at the right moment, for the right price, through the right distribution channel, with the best cost efficiency”.

It involves the use of performance data and analytics, which serve to help hotel owners to more accurately predict demand and other consumer behaviours. This, in turn, allows them to make more sensible decisions regarding pricing and  distribution, in order to maximise revenue and, therefore, profit.

As a concept, revenue management actually began in the airline industry, where companies found ways to anticipate consumer demand in order to introduce dynamic pricing. However, it is applicable in any industry where different customers are willing to pay different prices for the same product, where there are only a certain amount of that product to be sold, and where that product must be sold before a certain point in time.

To carry out effective revenue management, a business must also have some way of forecasting demand and consumer spending habits, so that informed adjustments can be made. For instance, hotels can use past data, existing bookings, weather forecasts, and other industry data to inform their revenue management strategy.

Why is Revenue Management Important?

For hotel owners, hotel revenue management provides the ability to make the most out of a perishable inventory of hotel rooms, allowing them to maximise the amount of money the business generates. Essentially, it allows decision makers to make informed, data-driven choices, rather than relying on instincts or guesswork.

Hotels, like many other businesses, have fixed costs, which need to be paid regardless of how many rooms are sold and regardless of how much money is generated from guests. Therefore, through a revenue management strategy, hotel owners can ensure their costs are met and their prices and services are dynamically optimised.

Our Hotel Revenue Management Course

Our Hotel Revenue Management course is designed for hospitality managers within all sectors of the hospitality industry.  Suitable for general managers, revenue managers and MICE managers through to reservation managers and other hospitality professionals responsible for the financial performance of their organisation. What’s more, this is an excellent introductory course for anybody wanting to gain an understanding of hotel revenue management.

Course Content

Our Introduction to Hotel Revenue Management Course, is broken down into three easy to follow modules: –

An Introduction to Hotel Revenue Management –This introductory module will provide you with a foundation on which to build your knowledge of hotel revenue management. In this section, you will learn exactly what hotel revenue management is and why it is so important. You will also learn about the importance of essential tools that revenue managers should be familiar with including  key performance indicators, demand calendars and market segmentation.

Price Management, The Customer and External Factors – In the next section of the course we look at price management and how you can go about setting the right price for your product. We will also examine the customer and how various external factors can directly impact the decisions that managers make..

Competitors, Stay Controls and Getting It Right – This concluding section of the course touches on pickup analysis and stay controls, before examining the competition and the importance of benchmarking. We’ll also look at the various ingredients that ensure success in hotel revenue management.


Our Introduction to Hotel Revenue Management Course is endorsed and approved by the Institute of Hospitality.


As with all of our courses at the Training Terminal, An Introduction to Hotel Revenue Management is completed through your web browser in our secure online training portal. Study at your own pace and check your understanding with interactive quizzes. To complete this course successfully you will need to pass our end of course assessment consisting of 30 multiple-choice questions.

Duration and Time Limit

To complete this course we recommend approximately 2 – 3 hours, however you can take much longer than this or less depending on your learning style and other commitments.


If you pass the end of course assessment you will be awarded your Institute of Hospitality endorsed certificate in PDF format.

We only work with the very best

Our training courses are written and managed by hospitality professionals with many years experience in their field. You will be learning from the best and you will come away from your training inspired by mentors who understand your aspirations and requirements.

Click here to find out more Hotel Revenue Management Course


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