Hotel revenue management is about selling the right room to the right guest at the right price at the right time. The key measures are occupancy, average daily rate (ADR) and revenue per available room (RevPAR), which combines both, with many hotels also tracking total revenue per guest including food, drink and spa. Rates move dynamically with demand, events, seasonality, competitor pricing and booking pace. Online travel agents bring volume and visibility but charge commission, so hotels push direct bookings with perks like better rates for members, free breakfast or flexible cancellation.
Tools include minimum length-of-stay restrictions, non-refundable rates, packages and controlled overbooking based on predicted cancellations. Revenue management software increasingly automates pricing, but human judgement still matters for local events and long-term relationships. The front desk feels the consequences directly: guests compare prices, overbooking means walking guests to other hotels, and unclear policies cause disputes. The best strategies balance short-term yield with long-term loyalty and reputation.
What we ask on the show
- Has dynamic pricing made hotels fairer or just more confusing?
- What's the worst overbooking you've ever had to handle at the front desk?
- How hard should hotels push direct booking?
- Can software really price a room better than a good revenue manager?