Hotel Profit Discovery

Why Revenue Management is the Best Profession in the Hotel Business

I don’t know anyone who has not, at some point, questioned their career choices or doubted the value of their profession.  Actually, I believe that if you don’t question why you do something you are probably not very good at it.  Questioning your job means that you are thinking deeply about it and that’s where innovations and breakthroughs usually occur.  Think about it, most advances in any industry are driven by people who are in some way frustrated by their work. When I wonder what the point is to all this Revenue Management stuff, I often have to remind myself of the reasons why this is the best profession not only in the hotel business but in most businesses anywhere.  Here are just a few of the reasons why you should love Revenue Management.

Pricing is king

The easiest way to create more profit is through pricing tactics.  That is now true not only for the hotel business, but for most travel-related businesses.  The costs of running most hotels is pretty static.  Most hotel companies locked down their cost structure during the Great Recession.  Moreover, there’s no technology on the horizon that will significantly change the costs of maintaining or building a hotel. Therefore, pricing is the most powerful tool for creating wealth for hotel owners and that puts Revenue Management(along with Finance) at the center of every important conversation.  The same cannot be said for any other hotel function.

Math is the new black

It’s not coincidental that two of the eight movies nominated for a 2015 Best Picture Oscar were about mathematicians.  In this data-driven world, the limited number of people that have the skills to find patterns in numbers are not only becoming indispensable but also admired.  Anybody who is in the business of extracting secrets out of data for the purpose of finding terrorists, cures, and even profit, is living through the most interesting of times. Today, the data sciences are permeating every profession, especially Revenue Management.  Those who are using these advanced skills to crack the profit code for hotels have one of the most interesting professions in the world.

Introduction to the Data Science of Hotel Revenue Optimization
“Thank you for coming up with this powerful RM course. Though I have finished the Cornell Advanced RM certification I felt your course is something I should have learned earlier.” – Abhijeet P.k Reservations Manager at Flora Group Hotels Dubai

A jack of all trades

Revenue Managers can’t do their job effectively without understanding every function in the hotel business.  From Marketing to Operations to Accounting, RMs are exposed to the entire hotel management playbook.  Unlike some departments that can make decisions in a vacuum (you know who you are), Revenue Management is most effective when it involves a wide breadth of perspectives, ideas, analysis, and even opinions. This “crossroads” nature of RM is what makes it so interesting.  Not even the GM has such a panoramic view of the business.

Change is constant

The only two departments in the hotel business that are constantly being bombarded with innovations is Marketing and Revenue Management. Yet, while Revenue Management vendors are trying to incorporate more of the Marketing function into their products, the same is not happening in the other direction.  Again, that’s because RM is the only true 360 degree function. One thing is for sure, the RM function is never dormant, someone is always developing something to make it more effective or efficient. Whether that is new software, new tactics, or new processes. That is why those that are in RM right now are, by default, active players in the development of the nature of the profession itself.

We’re just getting started

Even after a decade of expansion, Hotel Revenue Management is just in it’s infancy. That means that there are plenty of opportunities in the field. Think about it, most hotels in the world do not have an RM, it is the GM that creates rate tactics. That means that the RM profession will continue to expand and evolve for decades to come.  As existing RMs become more skilled in the data sciences, more advanced analysis in Guest Analytics will give birth to new approaches in pricing tactics.  That will cause channel structures to be redefined and some may even disappear altogether. Whatever happens, there is no doubt that the next wave of market changes in the hotel industry will probably come from innovations created by Revenue Managers.


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Robert Hernandez, Statistical Analysis and Data Mining for Revenue Growth Robert is an expert in the field of mathematical Hotel Optimization and Analytics. He has spent the last 17 years building data-driven forecasting and optimization models for companies in over 20 different industries, from tech to tourism. Robert possesses a very unique skill set including cross-disciplinary experience, advanced mathematical and analytics skills, data transformation, industry-specific knowledge and business-process improvement expertise. Robert began his career at the Walt Disney Company in Revenue Planning. Read More+


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