Industry Update
Opinion Article25 September 2017

Winning the Numbers Game

A Guide to Hotel Revenue Management

By Kristi White, VP, Sales Engineering at The Rainmaker Group

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What is Hotel Revenue Management?

In the highly competitive hospitality industry, it is critical to assemble as much information as possible to make educated decisions: enter revenue management. Using the basic principles of supply and demand economics, hoteliers can optimize revenue by strategically managing a property's room inventory, pricing and distribution. Based on market trends and forecasts about consumer demand, revenue managers are able to maximize revenue during high-demand periods and stimulate demand during periods of lower activity. Put simply, hotel revenue management is selling the right room to the right customer at the right moment at the right price through the right channel.

Leveraging Every Metric

While revenue management relies on market data and past and current trends, data alone is not enough. A revenue manager must take into consideration many factors, such as changes in consumer behavior, the roles of various distribution channels, and the behavior of the competitive set. The revenue manager also needs to know how to use segmentation, create forecasts, and implement pricing models. Having an overall understanding of the property, the market, and where the property fits in the market allows a Revenue Manager to be proactive rather than reactive.

The Role of Technology

As a result of technological advances, revenue management strategies have evolved rapidly over the last decade. Consumer shopping channels have changed dramatically and influence the ways consumers conduct research and purchase travel. Technology also offers new insights into consumer behavior and sentiment. A revenue manager's job now is to analyze all available data to determine the tactics that will yield the greatest revenue and optimize room inventory.

Business Intelligence (BI)

BI is the process of collecting as much data as possible to create decision points that transform disparate data into actionable intelligence. BI is not a new concept, but the sheer volume of data, its reliability, and its real-time nature is new. Big data, high-powered analytics capabilities, inspired data visualization, and fast-and-secure connectivity to the cloud have made it possible to delve deeply into large datasets to mine for essential nuggets of insight in just a few keystrokes. By analyzing this information, revenue managers can respond to consumer demand and market trends faster and more effectively than ever before.

Rapid Evolution in Hotel Distribution Channels

While a property's own website remains its most profitable distribution channel, new channels consumers can use are being introduced with frightening speed. Monitoring and leveraging online travel agencies (OTAs) such as Expedia and, is vital. These companies offer user-friendly, readily accessible online platforms consumers can use to book room stays. OTAs also make it easier for consumers to price-shop, amenity-shop, and any other kind of 'x-shop' imagined. They are also masters of online marketing, with penetrating marketing budgets. In addition to providing great value to travelers, OTAs offer additional exposure for properties, enabling customers to find those that they may not have heard of otherwise.

The Impact of Alternative Accommodations

Airbnb and have changed the mindset of many travelers in terms of types of accommodations possible. These platforms are making revenue management more complex. For example, "share" properties are relieving some of the pressure in high-demand periods, potentially affecting the prices that are charged in specific markets during compression dates. In order to compete, properties must focus on value. Complimentary meals, free Wi-Fi, room upgrades, mobile check-in, and personalized service are some of the ways hotels add value to a stay that Alternative Accommodations cannot. A strong revenue management strategy, focused on all of the ways consumers can transact, is essential for properties to succeed in today's rapidly evolving online marketplace.

Revenue is Everything

Merely reviewing reports at year-end and setting once-a-year revenue management benchmarks will position a hotel for failure. Revenue management, as a core skill and discipline, is vital to the success of any hotel property. A successful approach requires a comprehensive understanding of the market, incorporating the latest intuitive technology and predictive analytics customized for the property, as well as consumer sentiment insights generated from social media and online review sites. All of this information must be synthesized before revenue managers can forecast demand, develop dynamic pricing strategies, and successfully navigate the complex landscape of online distribution channels.

Coming Soon

In upcoming weeks, we will delve deeper into the four topics of segmentation, forecasting, pricing, and distribution for traditional hotels seeking to take their revenue management to the next level.

Want to learn more now? Download the Full Rainmaker Guide to Revenue Management

Kristi White

    More from Kristi White

    About Rainmaker

    The Rainmaker Group, a Cendyn company, is the premier provider of revenue and profit optimization solutions to the hospitality industry. Rainmaker's intelligent profit platform helps hotels, resorts and casinos optimize revenue, drive increased profitability, save valuable time & outperform competitors. As part of Cendyn, Rainmaker offers a complete set of software services for the industry, aligning marketing, sales and revenue teams to optimize their strategies and drive performance and loyalty across their business units. To learn more about Cendyn and its suite of hotel revenue management and profit optimization solutions, visit or

    About Cendyn

    Cendyn is the leading innovative cloud software and services provider for the hospitality industry. With a focus on integrated hotel CRM, hotel sales, and revenue strategy technology platforms, Cendyn drives sales, marketing and revenue performance for tens of thousands of hotels across the globe. The Cendyn Hospitality Cloud offers a complete set of software services for the industry, aligning marketing, sales and revenue teams to optimize their strategies and drive performance and loyalty across their business units. With offices in Boca Raton, Atlanta, Boston, San Diego, London, Munich, Singapore, Sydney, Bangkok and Tokyo, Cendyn proudly serves clients in 143 countries, delivering over 1.5 billion data-driven, personalized communications on behalf of their customers every year. For more information on Cendyn, visit

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