Revenue Management: Profitability Starts Here

June 1, 2017 navisadmin

By Pam Carder, NAVIS Revenue Management Strategist, CRME

Historically, reservation sales, marketing, and revenue management have operated in functional silos. Three staffers working in different corners of the office to somehow silently accomplish many of the same goals. For the past two decades, revenue managers have been responsible for demand and pricing management, while marketing has been in charge of generating the demand, and reservations have been accountable for converting the demand—all with the aim of increasing occupancy and ADR. Where these three disciplines intersect is where profitability soars; it is where the most effective and holistic revenue optimization happens.

Reaching Optimal Revenue Management Profitability



  • Demand-based forecasting will add 2% revenue to your top line.
  • A 10% improvement in daily forecast accuracy can produce a corresponding revenue increase of 1-2%. (Cornell University Study with Marriott)
  • A 1-point increase in an overall review score (3.8 to 4.8) increases the odds of a booking by 13.5% and increases pricing power 8% without the loss of volume. (Cornell Study with STR, Travelocity, ReviewPro, & ComScore)
  • A 1% improvement in fixed costs will add 2.3% to the bottom line, but a 1% increase in PRICE will add 11.1%. (PKF Study)



Among the solutions for properties unsure how to reach this sale, marketing, and revenue management sweet spot is NAVIS’s Revenue Management Professional Services. Tapping into the service can result in a 4-9% increase in your top line. The simple math: if your annual revenue is $10 million, your increase could be as much as $900k.

Many revenue managers are tasked with (at least partial) accountability for demand creation. This means that the Revenue Manager must communicate—connecting the dots—between marketing and sales managers and create actionable data for the revenue team utilizing marketing and sales analytics. Ways of accomplishing this include:

  • Ensuring marketing efforts align with the revenue management strategy. PPC, social media, e-blasts, direct mail, and web content should all be products of revenue management goals and data.
  • Using booking window, pace, market segment, and demand forecast data to create targeted e-blasts (rather than leaving marketing to generate demand without an understanding of the data).
  • Analyzing market segments along with revenue management to develop targeted plans for each segment to achieve the optimal price from every guest (otherwise, you could be causing buy down by targeting guests with unnecessary discounts or value-adds).

The convergence of revenue management, sales, and marketing is still in its infancy, really. Big brands have only undertaken this shift in the last several years and many are still refining the dynamic, but most all that do find the results have a direct impact on profitability. NAVIS Revenue Management Professional Services helps bridge this gap for our clients.

Reach out to us to find out what tools we have in our pockets to help drive demand and increase revenue using revenue management principles.


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