Tuesday 25 July 2017

Revenue management to become profit management finds report

Revenue management is changing to become a more all-encompassing discipline according to EyeforTravel’s new Aggregating DataStreams for More Effective Revenue Management report, with 71% of managers believing that the discipline should be recognized as profit management.

The report, which is free to download now, notes that a focus on profit will be key in the years to come, with the industry moving emphasis away from the traditional measures of success of Revenue Per Available Room (RevPAR) and Total Revenue Per Available Room (TRevPAR). Instead, the industry will look at guests in the round and consider the total profitability each can bring and aim to maximize this. The key metric the industry will use in the future Gross Operating Profit Per Available Room (GOPPAR) according to the report, which also notes that Cornell University found GOPPAR is now considered the most important benchmark for the future.

Therefore, revenue managers will need to consider all revenue streams and also have a better understanding and inclusion of cost factors than they have in the past. Alongside traditional operating costs of the hotel, revenue managers will need to calculate and include their distribution costs, which the report also found to be a key area of concern for revenue managers.

In order to achieve this revenue managers will need to increase their skillsets and also obtain better technology according to the report. It found that 71% of revenue managers felt that they didn’t yet have the tools to do their jobs effectively, making technology investment a major area for scrutiny in the next five years.

Many of those featured in the report noted technology and automation is needed so that they could free up time to be spent on more important tasks, moving away from data collection and setting restrictions to working on overall strategy, coordination with other departments and guest experiences. This latter element is noted as being key in the report, particularly as guest reviews can have a direct effect on the property’s profitability.


  • The effect of competitors on pricing, how to account for them and what strategies to take to get a competitive edge.
  • Understanding and constructing predictive analytics.
  • Understanding the costs of a business’s channel mix and how to win direct bookings.
  • The state of the industry’s approach to ancillary revenues.
  • The key metrics every revenue manager should be working toward.
  • The future of a revenue manager’s role and the skills they will require.