Revenu management, from the technician to strategist

Yield management, pricing, flow analysis, inventory control… Revenue Management combines notions that seem to be less concerned with the hotel universe than that of traders. “Revenue Management is a technique that makes it possible to offer the right amount of a specific service at the right price and at the right time,” explained the ex-head of Delta Airlines, a precursor of this positioning in the 80s. Since then it has become more sophisticated, particularly with the advent of new forms of sales and its expansion to other areas. In the hotel industry, behind this obvious sophistication, the RM pursues a goal that is actually quite simple: orient sales to maximize the property’s revenues during a given period in function of the most profitable clientele segments, their purchasing habits, the calendar and distribution channels. This attempt at defining areas already shows the broad array of fields to be explored by Revenue Managers who must absorb a large variety of information, attempt to fit it to their software without cutting themselves off from the commercial realities of the field and while finding their position within the hotel’s or hotel chain’s organization chart.With the precision of daily performance analysis tools, the strategic analysis of historic data is increasingly backed by an constant monitoring that is the reality on the field. The vital role of the Revenue Manager is now been recognized.At first, Revenue Management was often associated with yield management, which identifies market segments, evaluates potential and sets room rates. The current trend aims at a better understanding of the interrelations between market segments and their effects on the company’s profits. This more global approach no longer concerns only room revenues, but places the emphasis on the total value of a potential reservation. Revenue Managers concern themselves with the effective contribution of potential...