Revenue management allows business owners to anticipate demand and optimize pricing to get the best possible financial results. It’s generally defined as the practice of selling the right product to the right customer at the right time through the right channel at the right price.

With so many variables in play, it’s not surprising today’s revenue managers use automated revenue management systems that use performance data and other metrics to enable business owners to better predict demand, make more informed decisions over pricing and maximise profit.

Among the factors assessed by such systems as part of a revenue management strategy in, for example, the hotel industry are data on past customer behavior, existing bookings, competitor pricing and weather forecasts.

Revenue Management important?
In today’s incredibly competitive climate, effective revenue management is critical to profitability. It allows business owners to make the most out of their assets, ensure their fixed costs are met and their prices are optimized.

Having a revenue management strategy is extremely important because businesses have outgoings they need to cover whether or not they have generated any income. Revenue management strategies enable business owners to manage this to the optimal level.