Introduction

A hotel revenue management is all about ensuring that the hotel revenue manager maximizes returns from existing resources by selling products and services at the right price, at the right time to the right customers. That said the revenue managers have a lot of responsibilities when it comes to providing revenue management services. This mainly includes forecasting, pricing, inventory management, analyzing market trends, and distribution channel management. Explaining this in detail we have today in the article covered some of the major responsibilities and revenue management services offered by the revenue manager.

Forecasting- One of the most significant and essential revenue management services includes forecasting. Analyzing the past data and predicting customer behavior enables a revenue manager to optimize revenue. Driven from proven historical data on occupancy, room rates, previous revenue, and the current data on customer activity one can predict the demands and future trends.

Pricing Strategy- Building an effective pricing strategy is the key to successful revenue management. Based on the market demand and forecast revenue managers can set a pricing strategy that maximizes revenue for your business. Pricing strategies are often built based on certain parameters and taking into account historic data, market trends, and competitors’ prices, segmentation such as corporate pricing, packages, and dynamic pricing strategies. Pricing strategies are crucial and the only factor to make or break your business. So, pricing strategies and implementation are a significant part of revenue management strategy in hotel revenue management.

Inventory Management- In hotel revenue management inventory management refers to rooms in hand that is required to be managed and sold out at the right price, at the right time, to the right customer. Managing the inventory and ensuring that it does not run empty at any point in time is essential. So, here the main task of a revenue manager is to ensure that all the rooms are sold out at the right price to make a maximum profit at a given time.

Distribution Channel Management-

Distribution Channel Management is another key aspect closely connected to the Inventory Management process in revenue management services. Here the inventory must be sold to customers at the right price through the right channel. Depending on the type of rooms sold, targeted to a specific customer segment, distribution channels and the pricing for the same is fixed. It is the duty of the revenue manager to perform market analysis and segmentation, competitor analysis, customer behavior analysis, and revenue performance forecast that ensure distribution channel management that provides maximum profits.

Marketing-

It goes without saying that be it an in-house revenue manager or an outsourced revenue management services includes marketing activities. Increasing the sales volume is the primary goal of the revenue manager and using various marketing tools and conducting various marketing activities allows sales of all the inventory and assured cash flow. Marketing activities such as promotions, discounts, and loyalty programs are an essential part of marketing activities. This is to attract new guests and ensure the right inventory management.

Calculating KPI’s

This is a critical aspect of revenue management where revenue managers are required to calculate KPIs to define the success of a given revenue management strategy. Generally, the effectiveness of any revenue management strategy is measured based on calculating the KPIs which include the Occupancy Rate, Average daily rate (ADR), Revenue Per Available Room (RevPAR), Total Revenue per Available Room (TRevPAR), Net Revenue per Available Room (NRevPAR), Gross operating profit per available room (GOPPAR), etc. Calculating this is crucial and essential for the assured success of a hotel's revenue management services and strategy.