Revenue management executives are increasingly looking at the profit made from a booking, rather than simply revenue. Since the focus is on assessing the marginal profitability of customers, firms must recognise the price the customer is willing to pay - not wanting to pay which is usually lower. To do this they must include all possible ancillary revenues as well as accurately account for distribution costs. For distribution costs in particular, the aim is to establish whether a distribution channel is really delivering an incremental guest or whether a hotel could have acquired that guest on its own. “It’s not always an exact science but the process of thinking about it this way partially guides our investment decisions,” says Frederic Deschamps, vice president global revenue optimisation at Carlson Hotels Worldwide. Get the full story at EyeForTravel