Hotel Revenue Management: Opportunities in a Dynamic and Challenging Landscape

Revenue management and the role of revenue managers has changed dramatically in the past 20 years. Introduced by hotel chains in the late 1980s, revenue management was used to make decisions on room prices and lengths of stay. The field of revenue management has since evolved to support an array of strategic decisions made by hotels, management companies, and travel intermediaries aimed at optimizing profit and enhancing the overall value of the physical asset.

Phocuswright, in cooperation with Expedia, conducted an extensive, qualitative study on the evolution of revenue management across the hotel landscape through roundtable discussions and phone interviews with revenue management professionals. The focus of the study is on helping lodging organizations improving revenue performance and overall competitiveness by examining the challenges, changes and potential opportunities for improvements. This white paper focuses on the challenges faced by the revenue management function and lodging organizations from the perspective of those who actually perform that task: the revenue managers. Participants in the study included revenue managers from chains, ownership/management companies and independent properties.