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Principles and Elements of Effective Hotel Revenue Management

To apply revenue management in a hotel there are a few basic priciples that apply. What are these basic requirements to be able to successfully yield and optimize revenue and profit of a hotel?

 

Here an overview of the basic elements and ingredients you need to apply effective hotel revenue management:
  • Market Segmentation
  • Historical Demand and Booking Patterns
  • Demand Forecast and Displacement Analysis
  • Pricing and Inventory Management
  • Overbooking
  • Information Systems
In the following section of this revenue management book or manual will go into more detail on these topics or concepts.

 

revman_ingredients

 

With regard to overbooking, it is simply necessary to oversell to reach 100% occupancy, without walking away clients.
 
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If there is a risk of walking away, the costs should be taken into account in the evaluation of the overselling (extra rooms revenue sold versus the costs of walking away or out-booking).

 

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