Revenue & Distribution Management

Hotel revenue management is the practice of selling the right room, at the right price, at the right time, through the right channel. It uses demand forecasting, competitor rates, seasonality and booking pace to set prices and availability, and it is judged by occupancy, average daily rate (ADR) and revenue per available room (RevPAR), not by occupancy alone.

ADR, average daily rate, is room revenue divided by the number of rooms sold: the average price paid for each room that was sold. RevPAR, revenue per available room, is room revenue divided by all the rooms available, sold or not. Because RevPAR combines price and occupancy in one number, it is used to compare performance over time.

There is no fixed schedule. Rates should change when demand changes: seasons, events, booking pace, competitor rates and the number of rooms left all matter. A hotel that keeps one rate for a whole season tends to sell too cheaply on busy dates and too expensively on quiet ones. MMC reviews rates on an ongoing basis as part of revenue management.

Revenue and distribution management is delivered as part of Online Hotel Management and Full Hotel Management, because pricing depends on the channels, reservations and marketing around it. MMC can still manage one part of the hotel or the entire operation, so a narrower scope can be discussed with you after the hotel review.

MMC looks at the channel mix first: how much business comes from Booking.com, from other OTAs and from direct channels, and what each one costs in commission. The work then covers other suitable platforms, the hotel’s website and Google presence, and offers for direct bookings, with the aim of relying less on a single channel. Booking.com usually remains an important channel.