The Total Revenue Performance Journey

Practical Revenue Management Tips

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | August 02, 2015

Total Revenue Performance is the intelligent calibration of demand across all hotel functions to meet overall business objectives. It is the ability to instantly and systematically decide which business to accept across multiple revenue streams at all times, based on greatest overall value to the asset. This kind of holistic approach to revenue management considers not only guest room rates or availability but also a myriad of other sources, including revenue streams across your business and other data, such as social media and sales data. Executed successfully, you can drive your revenue performance to whole new heights across your entire asset as you optimize all levels of your competitive positioning, pricing, and inventory management.

However, the journey toward Total Revenue Performance assumes that you are ready to expand the discipline of revenue management across your organization and use its principles strategically. And your readiness to embark on that journey means you’ve assessed your current revenue management processes and are applying best practices. This article outlines those practical tips for forecasting, pricing, optimizing and managing total hotel revenues, allowing you to determine your readiness for a Total Revenue Performance approach to your business.


  • Do Consider Data Beyond Unqualified Transient Demand

An unconstrained demand forecast is defined as the true demand for a particular product in the absence of any limitations such as when a room or seat is unavailable to purchase. The data and methodologies for unconstraining affect the entire pricing and revenue management process. When it comes to unconstraining the demand forecast, predictive models using only the unqualified transient data are generally considered to be not reliable. Unconstraining requires considering each and all of wholesale, group, corporate negotiated, and unqualified transient demands. This is what we call “holistic unconstraining.”

  • Don't Include Regrets and Denials in Demand Forecasting

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Guest Service: Empowering People

Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.