Many independent hoteliers still believe outdated revenue management myths – costing them bookings, profits, and precious time.
NB: This is an article from RoomPriceGenie, one of our Expert Partners
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In this article, we debunk five of the most common misconceptions and share smarter, proven strategies to boost RevPAR, improve profitability, and reclaim hours in your day.
These myths lead to mispricing, lost revenue, and too much time spent managing rates manually. Let’s set the record straight. Here are five of the most common, and most costly, myths about hotel revenue management.
Myth #1: Maximizing Occupancy Is Always the Top Priority
Many hoteliers fixate on occupancy. Sure, a full house feels like a win. But if you’re filling rooms by underpricing them, you’re missing out on potential revenue.
The reality: The goal of revenue management is to maximize revenue, not just occupancy. In the right conditions, raising rates can generate more revenue than selling every room. It’s also often more profitable, since you save on turnover costs.
A smarter strategy: Focus on RevPAR (Revenue per Available Room), which reflects both rate and occupancy to give a fuller picture of performance.
50-room Hotel Example: Which is more profitable?
- Selling 50 rooms at €80 = €4,000 revenue (100% occupancy, €80 RevPAR)
- Selling 40 rooms at €120 = €4,800 revenue (80% occupancy, €96 RevPAR)
By charging the higher rate, you earn more revenue and save on the cost of servicing 10 extra rooms.
How a revenue management solution helps: RoomPriceGenie automatically balances rate and occupancy to maximize revenue. It also adapts to your preferred pricing strategy, whether you’re focused on growing occupancy, rate, or both.
Myth #2: Always Charge the Maximum Rate on Peak Nights
When demand is strong, it’s tempting to push rates as high as possible. But there’s a smarter way to boost revenue.
The reality: Focusing only on high-demand nights can lead to underperformance on shoulder nights. For example, if you always max out rates on Saturdays but have empty rooms on Fridays and Sundays, you’re missing out on potential revenue.
A smarter strategy: Use minimum length-of-stay restrictions on peak nights to encourage longer stays and increase total booking value.
How a revenue management solution helps: RoomPriceGenie doesn’t just optimize rates. It also recommends availability controls like minimum stays and multi-night discounts to help you earn more revenue across the full booking window.
