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The Evolution of Revenue Management

Updated: Jul 21, 2022

When did hotels start needing Revenue Managers?

Probably when Jerusalem was holding its census 2022 years ago and all the Inns were full.

Fast forward a couple of millennia, when did we start using Revenue Managers? Officially probably the early 1990’s saw the beginnings of this role take shape, but how many Reservations Managers who were, highly organised, had strong attention to detail, and knew every room number layout by heart found themselves doing this highly analytical and strategic role for a further 20-30 years before it became a “thing”.

Well, this “thing” called revenue/profit/performance management, is now considered an essential part of any hospitality business, from the 5 star branded hotel, to the small country motel to the caravan park who now realise their river view sites are more sought after by the customer.

How we measure results has also varied over the years. Some choose budget, a budget that may or or may not have been issued to you by a very optimistic owner. Perhaps you simply measure against your competitors despite being the best product in your location and with very different operational expenses. Maybe you’re simply happy if you’re making more money than last year, even though rising costs have eaten up all your additional revenue.

This leads to our next question; do we track top and bottom line year on year changes? How many Revenue Managers are instructed to keep commissions down? How many sales teams are aware how much profit their contracted rates are making?

At Revstar we take a holistic approach, delving into things like your competitor set, room type review, distribution audit, cost of sale against current pricing, reservations efficiency, capture rates and average spend in outlets and top and bottom line forecasting. From this list, our team of experts can pinpoint small improvements and changes that can become big financial wins.

Is your Inn making enough money?

To learn more about how Revstar Group can support you Contact Us!


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