I’ve been in the revenue game for 20+ years, and let me tell you — nothing grinds my gears like watching hotels leave money on the table. Not because of the market. Not because of bad luck. But because of simple, and often avoidable mistakes.
So, I’m calling the mistakes out…
Here are 5 brutal revenue management mistakes I see hotels make all the time as a CEO of a revenue management consulting firm.
1. Don’t Ignore Time
It is imperative to understand your target segment’s typical booking window when rolling out an offer. Failure to do so won’t help produce your desired revenue results and may even cause a complete flop of a promotional campaign. Missing out on key booking windows, even by as little as one day, is a catastrophic mistake and can be avoided by taking advantage of dashboard and reporting features in revenue management software.
Timing is not the only thing that is essential here.
The Xotels team is more than anyone else is focussed on ‘speed to market’. Time is of the essence. We aim to be more dynamic and work faster (more output) than the hotels that we compete against.
Slow implementation times are costing you money. Dynamics is what can get you ahead.
Make sure you focus on actions that actually drive revenue — it’s easy to waste time on things that don’t move the needle. The question is, however, how much does it bring in return to the bottom line. Unfortunately, in many hotels a lot of time is spent on meetings, actions and promotions that don’t generate revenue.
So measure what works, and ditch what doesn’t…
Efficiency and effectiveness should NEVER be underestimated.
2. Focusing on the Wrong Metrics
We agree on the importance of occupancy rates, understanding demand, and the need to track your competitors´ pricing, but the key to true success is revenue management is to analyze and understand ADR (Average Daily Rate) while improving the occupancy.
Too much focus on only Occupancy or your average room rate, will erode your business.
In the end, the bottom line is what counts. So a revenue manager should always be tracking the impact on the NRevPar (Net RevPar) or GOPPar (gross operating profit per available room).
3. Being Afraid of Change
Failure to change rates can prove to be one of the biggest revenue-losing mistakes made by hotels. Static rates prevent you from reaching your full revenue potential. Instead, our revenue management tip is to change rates often to reflect supply and demand in order to maintain a steady pace of bookings. Extraordinarily high demand can throw an additional level of complexity into pricing decisions. Understanding that extra demand is not necessarily going to be on top of your typical business demand is essential.
Haphazard pricing is also a common downfall for managers. By merely relying on a “gut feel” with no analytics behind your decision, you are not only increasing your chance of making mistakes but also missing out on other revenue-increasing opportunities.
4. Not Utilizing Technology
Hotel managers often fail to measure the impact of pricing strategy, something that can be easily achieved with the correct revenue technology or outside help from revenue management consultants. Revenue management software helps you make data-driven decisions by providing vital information such as the booking history and details of rate discounts. With these solutions, managers can ensure they are maximizing revenue while still offering competitive and attractive rates for guests.
Trust me when I say, the machine can help you uncover things you might not notice yourself that easily …
5. Fearing the OTAs
Understanding booking patterns must also include gathering data from OTAs. While they may have been dreaded and feared by the hotel industry at first, third-party booking sites’ popularity gives hotel managers no choice other than to embrace them.
You have to use them to your advantage, as distribution channels. This means that you do not simply jump on the bandwagon with any promotion or feature they are trying to sell you. But rather, you pick and choose what coincides with the revenue management strategy you have laid out for your hotel.
As a rule of thumb, make sure that you control your inventory and prices across all channels. You should not offer lower rates on more expensive 3rd party channels other than your direct website.
Leverage OTA for global distribution and future demand trends, and stay in control!
The Final Word: Mistakes Happen — Just Learn to do Better
Revenue success isn’t a one-time win — and yes, mistakes are unfortunately part of the process. What matters more is how fast you bounce back and learn to do better next time.
Test, tweak, and trust your gut. And above all, avoid the mistakes we just covered — they might look harmless, but they can quietly crush your bottom line.
Master the basics. Stay sharp. Keep learning. That’s how we turn a good hotel into a great one as a revenue management consulting company.
Cheers,
Remko West
PS. Need help with turning your hotel into a revenue-making machine? With our revenue management consulting services or hotel consulting services, we turn your hotel into a market leader.
Remko West
COO & Co-Founder @ Xotels
+34628709540
Xotels
