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Ignorance Means Risks: What Revenue Management Means for Today’s Hotels and the Costs of Neglecting It
By SiteMinder
Thursday, 13th June 2024
 

A quick search on the internet yields a wide range of definitions for ‘revenue management’. Some of these take a theoretical, almost academic approach and in several instances, there are iterations of revenue management’s classic definition: ‘selling the right room, to the right guest, at the right time, for the right price’.

Yet, it’s important to consider that the demands of revenue management have drastically changed. With rising costs, evolving guest behaviours and the varying types of accommodation businesses that have emerged, revenue management now means different things to different properties.

For instance, Diego De Ponga, former Corporate Director of Revenue Management at Palladium Hotel Group and now CEO at Port Hotels, believes the classic definition of revenue management is unrealistic in today’s market, where selling inventory demands more flexibility.

“I define revenue management as a way for accommodation properties to earn more,” says De Ponga. “These days, it would be impractical to use the classic definition, as I will sometimes sell at a less ideal time, at the right price. If you’re a revenue manager for a property with 100 rooms, your task is to maximise profits from all those rooms, regardless of market conditions.”

De Ponga’s nuanced perspective on how revenue management works in today’s landscape is a result of years of experience in the field. But for many of the world’s independent accommodation providers, revenue management remains unfamiliar territory, often marked by misconceptions and misguided practices.

Read the full story here

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