Previously, RM was silo-ed (just a “group of PhDs doing forecasting” in one part of the company); however, we know now that revenue management can be a lot more about how to influence strategic decision-making at your company, whether it be marketing, or sales, or brand-based decisions. There are consequences of not integrating revenue management with a company’s other strategic decisions. Revenue management principles are about understanding future forecasts for demand, including which rates and/or inventory you are going to put on the shelf, and how to yield them. “That’s the core of the hotel business,” Craig emphasized. For example, if marketing is planning a program to generate demand, and they are out-of-sync with how the revenue management department is forecasting demand, or they think differently about who are the relevant customer segments, then there’s a big disconnect between how a company generates demand and how it manages demand. Another example is in Sales: if sales goals are based on different ways of looking at customers or demand, and that’s out of line with the established forecasting and pricing philosophy, then performance will be suboptimal. This works counter to having well-defined strategic objectives for the company. Get the full story at the SAS blog