Revenue management is the discipline of selling the right room to the right guest, through the right channel, at the right time, for the right price. At its core is dynamic pricing: adjusting rates as demand, booking pace (pickup), and market context change.
What you will learn
- The 5 levers you can control to drive revenue
- The essential metrics to review weekly (with simple formulas)
- A practical pricing workflow you can run in under an hour
- Where automation helps while you stay in control
1) The 5 levers that move your results
Independent hotels rarely have unlimited time. The good news: a small set of levers drives most of the impact.
- Price: your BAR strategy and how often you make changes (dynamic pricing with clear rules).
- Availability: what you sell, when you sell it, and whether you close dates or room types.
- Restrictions: minimum stay, close-to-arrival, and peak-night rules.
- Channel mix: direct vs OTA, commission cost, and which channels you prioritize on strong dates.
- Room types & upsell: a logical rate ladder and positioning by category.
2) The only metrics you need at the beginning
Start with three metrics and one behavior metric. If you can see these regularly, pricing decisions become much easier.
Core formulas
- Occupancy % = Rooms Sold / Rooms Available
- ADR = Room Revenue / Rooms Sold
- RevPAR = ADR x Occupancy = Room Revenue / Rooms Available
- Pickup = New bookings over a period (by arrival date)
For a quick check, use the RevPAR calculator and review definitions in the glossary.
3) A simple workflow: 30 minutes, twice per week
The most sustainable approach is to build a cadence: check pickup and take action only on selected dates.
- Review the next 14/30/90 days for your “action dates”.
- Check competitor context (without blindly following it).
- For strong dates: increase gradually, consider min stay, protect the peak.
- For weak dates: test a small move, a value add, or a controlled discount on selected channels.
- Write down what you changed and why (so you learn faster).
If you want to reduce analysis time, Sigma Revenue combines real-time data with competitor context and can generate rate recommendations aligned with your strategy.
4) Common mistakes (and how to avoid them)
- Discounting too early: weak pickup doesn't always mean weak demand.
- Big price swings: dynamic pricing works best with small, consistent steps.
- Chasing competitors daily: use comps as context, not instructions.
- Ignoring distribution cost: a direct booking at the same price is worth more than an OTA booking.