7 reasons to consider revenue management

Setting rates is a lot like playing chess.

At a glance, the rules might seem arbitrary. But those rules are actually the result of years of complex thinking and refinement. Chess blends instinct and sophisticated calculation. It requires learning from experience, recognizing common patterns, methodically building a position, analyzing variations, and moving in for the win.

The same holds true for hotel revenue management.

 By using basic approaches to segment, forecast and price, operators can run their hotels more efficiently and profitably. But not every hotel has a revenue strategy in place. In fact, too many are setting a handful of rates and sitting back and taking business as it comes. If that’s you, this is your wake-up call.

Common Pricing Mistakes

  • In Duetto’s whitepaper, How Are You Pricing Your Hotel Rooms?, we explore seven of the biggest pricing mistakes you need to stop making. Once you do, your profits will soar. Promise. First, take a look at the competition beyond the hotels in your neighborhood and from community marketplaces like Airbnb. Competitors can include online travel agencies like Expedia or Priceline as well as mobile booking sites that are selling rooms in your hotel.


  • Revenue may be climbing, but so are commissions and other marketing fees. Recent studies have shown customer acquisition costs are rising faster than revenue, meaning your profits are shrinking. The reason? Those online and mobile booking sites that may be helping fill your properties are also taking a huge cut of the action. And new intermediaries and other marketing costs are compounding that problem, leaving your piece of the profits even smaller.


 So, what’s a hotel to do? (Glad you asked.)


  • Stop selling out too soon—For days where you know you’re going to sell out or get close, the goal should be to incrementally raise rates as the date approaches to slow down bookings so you have rooms left all the way until that date when customers are happy to pay more for a room they really want.

  • Start changing your rates—Rates should be adjusted as much as possible from low to high leading up to each and every day based on the pace of bookings and projected demand.
  • Stop pricing by “gut feel” If you’re relying solely on “gut feel” with no analytics behind the hunch, you’re going to miss revenue opportunities. A forecast should start with historical data, pace of bookings and competitive information. Bring in Big Data and the forecast gets even clearer.
  • Stop reacting to sudden price changes from your competition—Pay attention to the competition, but don’t follow they're every move.
  • Stop selling rooms on a first come, first-serve basis Having a forecast and picture of future demand is critical to making the right pricing decisions and filling your hotel with the most profitable mix of customers.
  • Stop linking your different price points together—By unlinking your different rates across various channels, you can offer customers more price points and never have to close channels down and miss potential revenue and bookings.
  • Stop shutting down pricing decisions at the end of the day—Systems and people must be in place at all times to react to changing demand.


It’s time to consider revenue management and all the strategies available that can help increase your revenue, and more importantly, your profits.

Duetto provides unique and powerful revenue strategy tools for hoteliers to optimize their profit and guest loyalty.