The Dark Side of Revenue Management: Avoiding Ethical Pitfalls
By Connor Vanderholm CEO, Topline Revenue LLC | October 2023
In the cutthroat world of hotel revenue management, where every dollar counts, it's easy to get swept up in the pursuit of profit.
As the owner of a small hotel revenue management company, I've seen firsthand how the pressure to maximize revenue can sometimes lead to ethical dilemmas.
In this essay, we'll take a candid and unvarnished look at the darker side of revenue management, exploring the ethical pitfalls that hoteliers must navigate. But don't expect a sugar-coated analysis - we're here to talk straight and add a dash of humor to the mix.
The Temptation of Hidden Fees Rate Manipulation
Let's face it; we've all been tempted to play with rates to boost revenue. It's the oldest trick in the revenue management book, you might even say that's exactly what revenue management is. But I'm specifically referring to the practice of lowering prices during the booking process, then adding hidden fees later. The guest feels like they've been duped, but hey, you've made a few extra bucks, right?
Now, I'm not saying this is the path to take, but it's a path some hotels have chosen. And while it might pad the bottom line temporarily, it's a risky game. Guests today are savvier than ever. They'll catch on to these tactics and share their experiences on social media faster than you can say "reputation management nightmare." So, before you start tinkering with rates, ask yourself if it's worth the potential damage to your hotel's reputation.