Hotel revenue management isn’t just about pricing rooms. It’s about protecting every euro, pound, or franc your hotel works so hard to earn. Yet, time and again, we find that hotels, especially independent and boutique properties, are making avoidable hotel revenue management mistakes that silently bleed revenue.
NB: This is an article from Catala Consulting
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We’ve worked with over 450 hotels across Europe and uncovered recurring patterns. These “mistakes” are surprisingly common, and they compound silently over time. Fixing them doesn’t require magic. It requires clarity, discipline, and a willingness to question the status quo.
Here are the seven most common hotel revenue management mistakes, costing your property thousands each month and what you can do to stop them.
Stale Pricing: The “Set-and-Forget” Trap
The Mistake
Too many hotels set prices based on historical data or market averages and then leave them unchanged for weeks. This is one of the most damaging hotel revenue management mistakes in today’s dynamic market.
Demand changes daily. Events pop up. Weather shifts. Competitors launch promos. Static pricing leaves money on the table during high demand and drives guests to competitors during low periods.
The Cost
For a 50-room boutique hotel in a mid-tier city, poor pricing decisions can cost up to £20,000 per month in missed opportunity or excess discounting.
The Fix
- Use real-time pricing tools or RMS platforms (like Flyr, Duetto, IDeaS).
- If you don’t have an RMS, review your pricing at least twice a week.
- Build pricing calendars with demand assumptions and event overlays.
- Set rate fences: protect higher rates with smart length-of-stay, cancellation, and channel rules.
OTA Dependency: Paying Too Much for Business You Could Own
The Mistake
Over-relying on OTAs is one of the most common hotel revenue management mistakes we see. Many hotels see OTAs as an easy source of demand, but 18-25% commission on every booking adds up fast.
If your direct booking ratio is below 40%, you’re probably overspending on customer acquisition.
The Cost
Losing 20% on 60% of your bookings = 12% of total revenue lost to OTAs. For a hotel with €1.5M in annual room revenue, that’s €180,000.
The Fix
- Improve your website’s booking engine: mobile-first, fast, clear.
- Run retargeting ads to bring OTA visitors back to your site.
- Offer clear direct booking benefits (upgrades, breakfast, flexible cancellation).
- Track your true CPA across channels. Sometimes Metasearch is cheaper than you think.
