Regardless of the type of hotel or the number of rooms that a given property has, an effective hotel revenue management strategy is necessary to success. At any given time, a hotel operator is going to be looking for ways to increase hotel revenue while also offering competitive hotel room rates. In order to do this, a property manager must develop hotel revenue management strategies that can be uniquely applied to their specific situation.
The purpose of revenue management in the hotel industry
Revenue management is about attracting the right guest, at the right time to any given property. Every hotel, regardless of its location and the success of its destination, is subject to the seasonal ebbs and flows of the tourism industry. With an effective revenue management strategy in place, a hotel operator is able to drive bookings during the slow season while capitalising on high demand during the busy season.
While the top priority of any RM strategy is to create competitive hotel pricing and increase hotel revenue, there also are other benefits to implementing a hotel revenue management strategy that works. For instance, effective hotel revenue management strategies can help hoteliers better manage their resources, ensuring that they are not paying too many staff members during a slow time of the year, while also verifying that they have adequate staff on hand during the busiest time periods.
The best hotel revenue management strategies recognise that hotel pricing is fluid, and can change from one day to the next. It’s critical that any hotelier creates a revenue strategy that is adaptable to the current conditions. With this in mind, it’s pivotal that hotel operators, managers and owners utilise a software solution that can implement any RM strategy at any given time.
Types of hotel room rates
There are various types of room rates that hotel operators will need to calculate as part of their RM strategies:
