The concept of revenue management originated in the airline industry, but has since proven successful in these industries:
The most common definition of revenue management is:
Selling the right product to the right client at the right moment at the right price via the right distribution channel with the best cost efficiency. Revenue management is a new way of approaching the age-old problem of supply and demand management.
Although a major revenue management initiative can be a complex undertaking, the seven underline principles of revenue management are simple. The seven core concepts are:
As a strategy, revenue management allows businesses to adopt a data-driven approach to decisions on what to sell them. It is a way of ensuring that informed decisions are made and your business does its best to drive revenue upwards while selling the same amount of products and services as before. Revenue management is often concerned with predicting demand and optimizing price and availability, in an effort to boost revenue. An even more professional approach is also to take into account all spend revenue per area per room and also take into account all distribution and/ or operational costs. This will give hoteliers an even greater insight into the actual performance of their hotel.