Revenue management requires a perishable inventory. If your occupancy rate on a given day is 50% that means 50% of your potential revenue for that day is lost forever. One of the jobs of the revenue manager is to devise ways to optimise income and reduce potential losses.
For revenue management to be effective there must be a fixed capacity. Hotels are a perfect example of this in action. No matter how many people want to stay with you there are only so many rooms on offer. So optimising income for each room is essential.
Demand for the product ebbs and flows which requires the Hotel Manager to adopt different approaches to attracting visitors at different times of the year.
There also needs to be segmented markets in play if revenue management is to be effective, and that is certainly the case with the hospitality industry where you have everything from ultra-luxury resorts to discount motels.