08 May What is Revenue Management?
We are starting our web and this blog about Revenue Management, which will be a communication tool for Fernández Consultancy where we will keep you posted about the actual hospitality problems and challenges and help you to be up to speed on market trends. For those who still do not have very clear what is Revenue Management, I hope we can clarify in this and successive articles.
Revenue Management came into existence in 1978 after the ‘Airline Deregulation Act’ removing governmental control in the airlines market. At that time, all the airlines used the CRS (Central Reservation Systems), where all the transactions information regarding airline tickets were collected, so they could have instant access to all the information and data referring to the reservations.
American Airlines thanks to its CRS (Saber) was the first airline that used this data to predict the demand. In the mid-1980s, the hotels began to see that they could also use these techniques and big chains as Marriott and Hilton started using them in their hotels. Nowadays all the big chains have a Revenue Management department.
Why is this being done? …
…because we want to optimize the income and maximize the business
Revenue Management is a technique that begins by choosing the relevant information driving the performance of your accommodation, in order to understand what to sell, when to sell, to whom to sell, how to sell it and for how much. Besides the economic benefits as increasing occupancy, revenue and price control, the Revenue Manager also improves business performance by involving all the different departments in sales optimization and the development of the different departments’ procedures.
If you are interested in the hospitality REVolution, contact us!