11 Nov 19

How Revenue Management- The Cornerstone in Hotel Industry

Introduction to Hotel Revenue Management

It is all about “Selling the Right Room to the Right Customer in the Right Place at the Right Price”

Hotel Revenue Management is indispensable for the popular growth of Hotel Industries.


Hotel room accommodation always works on the principle of demand and need. Whenever there is a demand from the guests a proper balance is required to satisfy the customer and gain profit out of it. Considering the limited hotel rooms available at any Hotel  it is always recommended to plan in advance of balancing both Demand and Capacity.

With the advent of the internet accessed by Millennials, it has paved the way for Online Travel Agencies to rule the hotel industry. This evolution is witnessed and it has a huge impact on traditional Hotel Revenue Management. Hence new ways are implemented by Hoteliers to focus on these two dynamic variables customer satisfaction and pricing.




Origin of Revenue Management

Airline Industry was the first among the few to establish the Revenue Management. Later other industries started revenue management for better prospects and the Hotel Industry is one of that.

Sequential Process of Revenue Management



The first and foremost step in Revenue Management is to collect the data, aggregate it, analyze the data and then forecast both the demand and performance. Finally, a decision is made on how to maximize revenue.

Hotel Revenue Management in Practise

Hotel Revenue Management depends on various factors and some of the key aspects are discussed below:

  • Past Occupancy Rates
  • General Sales
  • Customer Segmentation
  • Average Age of Travellers
  • Customer Satisfaction
  • Market share Information
  • Holiday and Event Information
  • Closure of Nearby Hotels
  • Price Information of Competitors.

The functionality of Hotel Revenue management has taken a drastic transformation owing to the change in demand patterns. Over the years, Revenue Management Systems were designed to facilitate this process.

Importance of Revenue Management System

RMS or Revenue Management System is a software solution that simplifies revenue management tasks effectively. This software comprises of data/information of your Hotel for example number of guests visited for a specific season and from the market at large, so that the right decision is made final.

The pivotal reason for Revenue Management System in the Hospitality Industry irrespective of the size of the hotel, allows the complex calculations to be resolved within less time frame and reduces the manual efforts.

A successful Revenue Management Strategy always depends on the root cause analysis, the lessons learned and how to improvise further with the above-mentioned strategies.




What to expect from EHotelmanagementschool

EHotel Management School explains the fundamentals of  Revenue Management and how to implement this in real-time. Personalized guidance will be provided and it focuses more interactive sessions. Any person who has enrolled in this course will get complete insights on Revenue Management.

Refer the below link to learn the Fundamentals and Decision-making strategies involved in Revenue Management.

E Hotel Management School Revenue Management curriculum comprises of:

  • Introduction to The Revenue Management course
  • Revenue Management Definitions,
  • Revenue Management (Constellation & Premises) and
  • Revenue Management (Meaning & Fundamentals).
  • Key Terms Used in Revenue Management and
  • Revenue Management (Metrics and Steps)
  • Segmentation Fundamentals and
  • Understanding Demand.
  • Understanding your Competition 
  • Pricing Strategy.
  • Inventory Management & Understanding of Revenue Management Reports.

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You can refer to the below Youtube link to learn exclusively about Revenue Management.