Personal Blog on RM

1. What is STR? STR stands for Smith Travel Research. It helps hotels compare their performance with similar competing hotels (called the competitive set or comp set). A hotel may look successful on its own, but STR helps show whether it is doing better or worse than the market. The comp set should include hotels with similar location, class, facilities, prices and target guests. 2. Three important hotel measures Measure What it tells me Formula Occupancy % How many available rooms were sold. Rooms sold ÷ rooms available × 100 ADR Average price earned for each room sold. Room revenue ÷ rooms sold RevPAR Room revenue earned per available room; combines rate and occupancy. Room revenue ÷ rooms available OR ADR × occupancy rate 3. STR performance indexes: remember the Rule of 100 MPI (Market Penetration Index) compares occupancy: Hotel occupancy ÷ comp-set occupancy × 100. ARI (Average Rate Index) compares room rate (ADR): Hotel ADR ÷ comp-set ADR × 100. RGI (Revenue Generation Index) com...

 Differential Pricing in Hospitality Revenue Management : 1. Core Definitions & Purpose Differential Pricing: The practice of charging different prices to different buyers for the same product or slightly varied versions based on customer willingness to pay. Fixed vs. Differential Pricing: Fixed pricing charges a single uniform rate to all buyers regardless of context, whereas differential pricing adapts to varying customer value perceptions Consumer Surplus: The economic gap between a buyer's maximum willingness to pay and the actual price charged. Successfully capturing consumer surplus represents 100% profit for the business. Strategic Pricing Goal: Utilizing data and customer insights to match prices with perceived value, shifting focus from mere volume sales to maximizing total net profit. 2. Fundamental Revenue Management Principles Customer-Centric Value: Businesses exist to create value for buyers; pricing strategies must focus externally on customer needs rather than i...

Revenue Management: Value, Service and Strategic Pricing Revenue management is not simply about charging the highest price or offering the cheapest room. It is about understanding what customers are willing to pay based on the value they receive. Customer Value = Benefits Received Compared with Price Paid.The Cheapest Option Is Not Always the Best Value For example: Hotel A – $170 Basic room No breakfast Parking costs extra Hotel B – $195 Breakfast included Free parking Better Wi-Fi Late checkout Although Hotel B costs $25 more, the additional benefits may make it better value. It is similar to buying a cheap burger and then paying extra for fries and a drink—the final cost may not be so cheap after all! Value Depends on the Customer Different customers value different things: Business travellers: location, Wi-Fi and convenience Families: breakfast, parking, space and a pool Luxury travellers: service, comfort and exclusivity For example, a business traveller may pay $240 for an airpor...

  If you run a hotel, pricing a room isn't like pricing a cereal box on a supermarket shelf. If a cereal box doesn't sell today, it sits on the shelf for tomorrow. But a hotel room is a perishable product . The moment midnight passes, an unsold room represents revenue lost forever. Hotels operate under high fixed costs (property, mortgage, insurance) and relatively low variable costs (cleaning, laundry, amenities). To maximize profit in this environment, hospitality businesses rely on dynamic pricing —adjusting room rates in real time based on demand fluctuations, seasonality, and local events. 1. Ditch Cost-Plus Thinking (And Forget 100% Occupancy) A common mistake in hospitality is relying solely on cost-plus pricing —taking the operational cost of servicing a room (e.g., $80–$100) and adding a fixed markup. If a citywide convention drives demand through the roof, setting a $125 rate based on cost leaves massive revenue on the table when guests are willing to pay $280...

15th Sept 2026 HOSP 424 Hospitality Revenue Management Revenue Management: This is a step-by-step process for selling the right product/service to the Right Person (customer) at the right price at the right time, through the right channel, and this is to maximize profit Revenue Management is the process of Selling the: Right Product & Service Right Person / Customer Right Price Right Time Right Channel In hospitality, RM (Revenue Management) is commonly used for Hotel Rooms, Restaurants / Cruises, Car rentals, spaces, etc. Example 1: 180 Total Rooms $150 Room Rate 70 Rooms Sold $10,500 Revenue  1. Occupancy Rate Formula:Occupancy % = Rooms Sold ÷ Total Rooms × 100 = 70 ÷ 180 × 100 = 38.89% 2. ADR (Average Daily Rate) Formula:ADR = Room Revenue ÷ Rooms Sold = $10,500 ÷ 70 = $150 3. RevPAR Formula:RevPAR = Room Revenue ÷ Total Available Rooms = $10,500 ÷ 180 = $58.33 If there is a major event in town and the revenue manager increases the room rate: 90 Rooms Sold $220 Room Rate $1...

  My Autobiography Hospitality Revenue Management My name is Efe Ohiosimuan, and I am a hospitality management student at Western Community College (WCC) in Surrey, British Columbia, Canada. I was born and raised in Edo State, Nigeria. My educational background, professional experience, and passion for customer service have shaped my interest in the hospitality industry. Educational Background I have a Master’s degree in Human Resource Management, which I obtained from Rivers State University of Science and Technology, Nigeria, in 2020. My education provided me with knowledge of employee management, organizational behaviour, communication, and leadership. I also hold a Scrum Fundamentals Certified credential, which introduced me to the principles of teamwork, organization, and effective project management. After moving to Canada, I continued my education at Western Community College. I initially enrolled in Academic Preparation before progressing to the Hospitality Management diplo...