• Posted by: Revenue by HRM


Following on from last week when we looked into different distribution channels, today’s focus is how we control these channels whilst remaining flexible and dynamic in the market. The best revenue management strategies offer lots of flexibility, AND consistency of product in the market.


One way to achieve a very dynamic rate structure is to derive many prices from one master rate, then by changing one price in your PMS, you are simultaneously changing multiple rates, which demonstrates a logical rate structure across all channels, whilst saving you time. For example, your Flexible Breakfast inclusive rate is your “Master Rate”, your Room Only rate can be derived from this at -£x per adult, you could also derive a Non-Refundable rate, Dinner inclusive rate or even package rates.


By deriving rates in this way, you can also help to ensure price parity across your channels. It is important to note that rates should always be derived in your PMS and mapped individually to your channels. Many channels will offer you the functionality to derive rates on their extranets – this is attractive to some as it reduces the amount of mapping required, however it can be difficult to restrict the availability of these plans / discounts in future. Deriving and mapping the rates from your PMS also aids production tracking so you can see historically which rate plans are popular for your property.


When it comes to distribution we need to cast the net wide. Converting 5% of 200 potential guests, is more than 5% of 100 potential guests, yet the conversion rate remains the same. Distribution is key and getting in front of the right guests will ultimately translate into more bookings. This can be achieved with a small number of select partners, do not be mistaken that lots of channels will translate to lots of bookings. Choose partners that are reputable and are delivering business into your area from the market you are targeting. Ensure you maintain a relationship with your account manager so they can keep you informed about market trends and opportunities for your hotel.


A robust revenue management strategy has rates and packages that are designed to appeal to different market segments. To achieve our occupancy and ADR budgets we need to yield these packages to deliver the right business mix into our hotels. Set up is key to offer this type of flexibility. You may want to drive more package business into high demand periods to increase the property Trevpar, to achieve this you may close discounted rate plans across all channels. Maybe there is  a large event in the area and you know you can fill your hotel with non-commissionable business, in this case you would need the flexibility to close third party sellers only, leaving your website open and selling. Ultimately, the control must remain with the hotel at all times.

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Author: Revenue by HRM

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