Total Revenue Management

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Total Revenue Management

What is the meaning / definition of Total Revenue Management in the hospitality industry?

Total Revenue Management is a much-discussed concept in hospitality, but in reality it has produced a great deal of confusion. Put simply, it is the revenue management of all revenue sources in a hotel. From your RevPAR and GOPPAR to the hotel restaurant, and from the bar, spa and gym to activities and excursions, it encompasses every single hotel income stream.

This strategy implies that revenue management is applied to every department of a hotel. For example, the F&B, function spaces, SPA, golf, etc. The goal is to optimise profits of each department, by maximising the revenue and the costs associated.

It is the future of revenue management. Some changes have to be done then, according to the application of this strategy. First, the revenue manager needs to have a central position in the organisation. Then, all department managers need to be trained about revenue management. New measurement tools should be used to measure properly, like RevPASH (Revenue Per Available Seat Hour) for F&B, RevPATH (Revenue Per Available Treatment Hour) for the SPA, etc.

See also:

  • Revenue Management
  • RevPASH
  • RevPar
  • Total Revenue

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