A common misperception about hotel revenue management (RM) is that its value diminishes when room occupancy falls. With a healthy economy, an RM system can often appear to be a well running car engine, doing its job to manage the mix of bookings to maximize revenues. During low occupancy periods, some hotel management teams mistakenly view RM as a low priority activity. However, it is precisely during these challenging times that hotel professionals should be looking under the hood, and asking questions regarding the methods and the data used to manage hotel pricing and customer mix. Hotel teams should rely on RM processes to enable responsive sales, marketing, cost containment and pricing decisions that work in today?s economy.

Case studies have shown that 4 to 12% improvements in RevPAR are achievable with effective RM processes. Recently, one large property that implemented a revised RM strategy during a 5% decline in demand still experienced a RevPAR increase of this magnitude. Since a single digit increase in RevPAR can easily translate to double digit increases in gross operating profit, RM?s value during this period should never be ignored.

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