Hotel Revenue Management: Is There a Breakthrough on the Horizon?


In the digital age, where innovation happens at lightning speed, it’s hard to believe that only around 15% of accommodation establishments globally are leveraging Revenue Management (RM) technology, even though hotel revenue management practices and technology have been around for over 30 years.

Using this baffling industry statistic as our motivation, we commissioned Phocuswright to conduct a global study on the state of hotel revenue management from the perspective of the chief revenue officer – and the results speak for themselves.


Information overload, disparate reception systems and the growing complexity of online distribution: I know it won’t get easy anytime soon.

The dominance of the Internet, online travel agents and travel aggregators and the resulting price transparency has made it almost impossible for revenue managers to do what they used to do – manage room inventory and make timely pricing decisions to drive revenue performance. .

Inundated with the sheer volume of data from various distribution channels, revenue managers must spend 50% of their time gathering information, leaving them little time to analyze and execute decisions that ultimately allow a well-reasoned RM strategy to stand out from the rest.

Larger properties and chain properties are also not immune. The study found that while most major chain properties and management companies have access to revenue management technology, many property-level revenue managers ignore the system’s recommendations, either due to local knowledge, or “lack of confidence in the recommendations” made by their brand-prescribed RM solution. .

Many revenue managers think that “other important information is missing”. For example, the type of reservation – whether room only or event space is also required; or whether the status of the customer loyalty program is relevant to the process. And that’s not even the end.

The rise of short-term vacation rentals and alternative accommodation (which is no longer “alternative”!) has added new complexity that is forcing revenue managers to rethink their pricing and forecasting decisions. As the study revealed, revenue managers often ask themselves, “In this fluid market, how do we determine where our property sits? What is the competitive set?”

1. Less RM technology, more RM capabilities

There was consensus among research participants that industry action is needed to create information standards and open architectures to support the adoption of MR technology. Revenue managers are looking for a truly integrated, cloud-based RM technology or information solution that can integrate data from across hotel systems, validate data, and share insights. actionable recommendations.

However, only a handful of properties relying on RM technology is not the way to move the industry forward. We need to see RM capabilities distinct from RM technology solutions, so there is widespread adoption of data-driven pricing and forecasting decisions. Unfortunately, traditional RM technology solutions come with hurdles such as cost, complexity, and the need for an RM specialist to manage the solution. We know this doesn’t work for the vast majority of accommodation properties.

What if we removed these barriers and enabled every hotel, regardless of size or location, to make better pricing and forecasting decisions every day? Not only would we improve the performance of our respective markets, but as an industry we would be better served by rational, consistent and timely decisions.

2. Travel intermediaries need to step up, fill the information gap

As consumers’ path to purchase has shifted online, travel intermediaries are increasingly being called upon to provide more information, such as destination demand data, traveler purchase information , which are simply not available elsewhere.

Indeed, if you look at how hotel revenue management works in the current environment, it tends to focus more on the demand for rooms and event spaces at the property level. As the distribution landscape evolves, travel intermediaries can unlock valuable insights such as destination demand data, price response attributes, conversion rates, and competitive overview data in real time.

Closer to home, at Expedia Group, we see more than 3 billion search combinations for our travelers every day; 20,000 hosting prices and availability change every second and more than 2 billion data exchanges between hosting partners on our platform every day. Our accommodation partners tell us that when they incorporate demand insights from Expedia Group into their revenue management decision-making, they can anticipate market changes.

In the study, a senior RM chain executive also noted, “With improved destination demand information, it is possible to reduce the forecast error from 10% to 2%.”

3. Prescriptive storytelling: human and AI join forces

The real breakthrough of RM technology lies in the ability of machine learning to aggregate and analyze data, make clear and prescriptive recommendations, while allowing users to understand the results of their actions. Simply put, revenue managers yearn to receive recommendations in a simple storytelling format.

In this AI-driven world, where RM technology is rushing to mine data and build on its strengths, let’s not forget that ultimately it will be up to humans to act on that data. A future where people and machines truly unlock revenue growth opportunities is what we should all aspire to as a result.

Wouldn’t it be great if RM technology spoke your language? Wouldn’t it be useful if RM capabilities could simulate what would happen if particular actions were taken; what would happen if these measures were not taken?


Mark Twain once said: “The secret to getting ahead is to start.” With new opportunities on the horizon in the competitive landscape, it is high time that the best minds in the industry come together and start building a new collaborative platform for the practice of hotel revenue management.

At Expedia Group, we are committed to democratizing access to RM technology and helping our accommodation partners generate revenue. However, we cannot do it alone. I would personally like to hear if there are any opportunities for our teams to collaborate on adopting revenue management practices for all lodging properties – regardless of location or size. I am convinced that together, as an industry, we can achieve this. Let’s go!

Download the Phocuswright report here to learn more:

Ashley Goncena
Senior Account Manager – Artisanal PR
Expedia Group, Inc.


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