What is revenue management in hotels?

Analyzing data on computer.

When it comes to hotels, revenue management is a pivotal role required to optimise profit. By selling “the right product to the right customer at the right time and at the right price,” revenue managers can ensure the hotel maximises its potential profits and reduces the likelihood of loss. It’s a role that works closely with all management facets of the hotel to ensure demand is met and even exceeded.

Revenue management strategy


As a profession, a revenue manager, particularly in hospitality, is a simple concept. Optimising customer demand is not a new idea by any means, but when it comes to hotels, strategy is critical to revenue management’s ongoing success.


There are several factors that need to be taken into account when it comes to revenue management strategy. Generally speaking, the revenue manager’s grasp centres around three facets, or ‘levers’, that can help hotel revenue optimisation. To summarise, these are:


Yield: designed to control capacity in such a way that the return is as high as possible. E.g. altering the prices of rooms to ensure a higher revenue, even if occupancy is not 100%.


Marketing: designed for more long-game strategising, marketing can help your hotel revenue improve through mechanisms such as analysing results from one month, looking at weaker areas and targeting future marketing towards those areas. For example, if you don’t have enough 20-30-year-olds booking a stay, you could retarget upcoming marketing material to this demographic.


Price: the most important lever of a hotel revenue’s manager, price means exactly that: how much does a room cost? This can fluctuate based on demand and season.




Another essential part of a hotel revenue manager’s role is forecasting. By this, we mean predicting how busy the hotel will be at a certain time and, for example, using the price lever to get higher-paying guests into the hotel, so maximising the revenue available for the already most profitable time of the year.


Speak to the specialists


The beauty of hotel revenue management is that there’s a real science to it in terms of elements such as forecasting, as well as getting to the heart of what is already a fast-paced, profit-lead and strategic industry.


JWR are recruitment specialists when it comes to hotel revenue managers. With a specialism in hospitality hiring, if you’re looking for a career or seeking the right employee, get in touch with our team to spark a conversation.