What is Revenue Management and How is hotel revenue calculated? #week 1
Happy Monday! Here is your Monday dose of Hotel Revenue news to help motivate you and get your week off to a great start 🙌
What is Revenue Management?
Revenue management is an extremely important concept within the hospitality industry, because it allows hotel owners to anticipate demand and optimize availability and pricing, 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 your own revenue management strategy.
Defining Revenue Management
To understand 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 using performance data and analytics, which help hotel owners more accurately predict demand and other consumer behaviors. This, in turn, allows them to make more sensible decisions regarding pricing and distribution, to maximize revenue and, therefore, profit.
As a concept, revenue management began in the airline industry, where companies found ways to anticipate consumer demand 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 is only a certain amount of that product to be sold, and where that product must be sold before a certain point.
To carry out effective revenue management, a business must also have some way of forecasting demand and consumer spending habits to make informed adjustments. For instance, hotels can use past data, existing bookings, weather forecasts, and other industry data to inform their revenue management strategy.
Read the full article on Revfine
How is hotel revenue calculated? 5 ways to do it properly
by Arielle Gibson
While emerging technologies push the hospitality industry and make specific processes easier to stay on top, you still need to know the basics. If you want to take your hotel revenue management to the next level, you need to learn how hotel revenue is calculated.
If you’ve never done it before, you might think it is very hard. Trust us, it’s not. Once you master the Key Performance Indicators (KPIs) and know how to calculate each one of them, calculating hotel revenue becomes easy. Let’s start.
Read the full article on upstay.
Reach out to us to learn more about how JoMA can help your Property predicting consumer behavior to sell the product at an optimal price every day, with knowledge, resources and support in every part of your business.
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