Forecasting is an important part of any revenue management strategy, because it allows hotel managers to make vital decisions regarding pricing, promotion and distribution, based on anticipated demand and performance. In this article, we look at some useful forecasting tips, which can help you to improve your revenue management strategy. What is Revenue Management? Within the hotel industry, revenue management can be defined as 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. As a business practice, it is primarily concerned with optimising
For hotel owners looking to grow their business, a robust revenue management strategy is of the utmost importance, helping to optimise business results. However, under the broader revenue management umbrella, there are many smaller strategies that can help to facilitate growth. In this article you find nine revenue management strategies that those in the hotel industry can employ to achieve this ultimate objective. What is Revenue Management? Revenue management is a popular concept within the hotel industry, and is used to optimise a hotel or resort's financial results by maximising revenue. The accepted definition is: selling the right hotel room,
Revenue management is concerned with optimising financial results and is especially popular in industries like hospitality, which must contend with high fixed costs and a perishable inventory. For example, hotels have a certain number of rooms and fixed costs which must be met, regardless of how many rooms are sold. In such industries, revenue management is employed in an effort to predict demand and optimise inventory and price availability. When utilised correctly, this will ultimately result in higher revenue. History of revenue management The history of revenue management can be traced back to the 1980s, originating in the airlines industry.
Revenue management is a data-driven approach to predicting customer behaviour, with a view to optimising product pricing and availability, in order to maximise revenue. It is especially useful in the hotel industry, because hotels have a limited number of rooms available and experience varying levels of demand. When carrying out a revenue management strategy, there are a number of key performance indicators, or KPIs, which should be tracked. Essentially, KPIs are quantifiable measures, which allow a business to assess and compare performance over time. In this article, we look at three of the main revenue management KPI's. 1. ADR -
Revenue management within the hospitality industry involves predicting consumer demand, in order to optimise the sales process, allowing businesses to sell at the right price, to the right customer, at the right time. In a hotel, this may mean turning away business now, in order to do more profitable business tomorrow. When carried out correctly, revenue management can be extremely effective, helping companies to significantly boost their profit margins. Here, we provide 8 revenue management tips for hotels. 1. Create a Revenue Management Culture The first of our revenue management tips involves creating a revenue management culture within your organisation,
Yield management is a pricing strategy, which is commonly utilised by businesses in hospitality, air travel and other tourism related fields, in order to generate maximum revenue from a perishable inventory (e.g. hotel rooms, or airline seats). Here, we answer the question 'what is yield management?' and provide an explanation for why it is so useful for hotel owners and others working in hospitality. Defining Yield Management In simple terms, yield management is a strategy based on selling to the right customer, at the right time, for the right price. Within the hotel industry, this typically means selling the right