Why would Hotels Outsource Revenue Management?

Revenue Management was only born in late 70s in the airline industry and many hotels have still not recognized the importance of it. Most common scenario in non-chain hotel is Owner or General Manager wearing all the hats, and therefore sub optimizing rate yield. It is “good enough” and until they are shown the missed opportunities for revenue growth, they continue to “know the best”.

I have witnessed one scenario where Director of Sales looks into rates every morning and sends it out to General Manager to agree or disagree and finally to Director of Revenue to publish. This is three extensive salaries and obviously no expertise, just based on their process. Many hotels are reluctant to share the data and the information with revenue consulting companies, even though they know it is confidential. We are not afraid to seek help when it comes to accounting, payroll and legal, even though they have to share data and confidential information as well. So why is it that hotels don’t outsource revenue? Is it because it is such a young field unlike law? At the end of the day wouldn’t you want an expert in a particular field to do the work for you, rather than yourself trying to figure it out, not knowing what the right thing is? If you don’t have a budget for Director of Revenue and understand how super important revenue is, don’t think twice and reach out to 5th Revenue Consulting to take care of you!



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