Revenue Management Without Discounting: How to Sell Uncertain Hotel Capacity

There are Revenue meetings that begin with an apparently innocent question: “What can we do to move those dates?” A low-occupancy period appears on the screen, booking pace is below expectations and someone, almost always with good intentions, suggests launching a promotion. I have taken part in enough conversations of this kind to recognise the exact moment when analysis begins to turn into anxiety. Demand does not respond, the calendar moves forward and the discount emerges as a quick way to regain a sense of control.

The problem is that this feeling rarely lasts long. We reduce the rate, communicate the offer, broaden distribution and wait for the market to react. Some bookings come in, although we can rarely prove how many were created by the promotion and how many would have arrived anyway. Meanwhile, we have committed to a lower price for guests who may not have needed any incentive at all. The hotel celebrates movement, but does not know whether it has generated demand or simply charged less for it. Hotel Revenue Management then becomes a curious discipline: it aims to manage uncertainty by giving the buyer economic certainty.