Revenue management is a complex process that must be tailored to the specific characteristics of each individual hotel: it is essentially based on an analysis of the property’s historical data and its forecasts (i.e., reservations received for future stays) to determine the sales and pricing strategies needed to increase revenue and maximize the hotel’s profit margins.
In his famous 1997 book *Revenue Management*, Robert G. Cross offers the following definition:
“Revenue management is the art of predicting customer behavior in real time at the micro-market level and optimizing product pricing and availability in order to maximize revenue growth.”
"The right product to the right customer at the right time to the right price" (Robert Cross, 1997)
Our 30 years of consulting experience specializing in Boutique Hotels has allowed us to develop a keen understanding of the needs and dynamics of small and medium-sized Boutique Hotels.
Revenue management applied to boutique hotels must take into proper consideration not only the increase in revenue and operating margin but also adherence to the hotel’s business philosophy.
Expanding the target customer base and enhancing market positioning by strengthening brand reputation must also be pursued through a well-considered revenue management strategy.
Revenue Management consulting is carried out through the following main activities:
1Analysis of the Daily History
2 Definition of the Starting Daily Rate
3 Daily analysis (at least) of the flows (pick-ups)
4Daily rate update
The unavoidable burden of high fixed costs—which small and medium-sized high-end hotels, in particular, must bear—makes it all the more crucial to implement strategies that maximize rates during the high season and increase occupancy during the mid and low seasons.
Revenue Management helps create a virtuous cycle of visibility, bookings, and positive reviews, enabling the hotel to achieve steady growth in its financial results.