Revenue Management: A Brief History
September 25, 2016 3:55pm
By Howard Hian
When I began in the hotel business in the early 1970s in San Diego, revenue management wasn’t even a phrase. In its primitive state, it was a loose practice. When more tourists visited, a hotel would simply raise room rates. In summer how we loved the people from Arizona! Then there were weekends and special events (anyone remember the Cool Jazz Festival?). Sometimes minimum stays were even required over holidays. Wow! Someone much earlier in the history of economic theory called it “supply and demand".
Then about 15 years ago or so, some suit dreamed up the position of Revenue Manager. Usually, the front desk or reservations manager was given this job/title which, of course, they’d already been doing. Introducing a revenue manager to a guest is like saying, “Hi, here’s the person who is going to squeeze every penny out of you.” It makes me all warm and fuzzy. Now, sophisticated software programs continually determine rates.
I recently heard one of the best revenue management stories ever. I was visiting Sorensen’s Resort in Hope Valley, CA to write a travel feature. It’s a quintessential mountain getaway; cabins, hiking, gorgeous views, etc. The owner (since the early 80s) told me that the previous proprietor had his own unique way to determine nightly rates. He would watch as cars drove onto the property and charge according to the model! Guess who paid more, the Chevy or the Caddy! That’s really imaginative, old school revenue management.
Tags: revenue management,
Howard Hian is an award winning journalist, affiliated with the North American Travel Journalists Association and the International Travel Writers Alliance. He was a long-time member of the San Diego Hotel Motel Association and served as an allied representative on their Board of Directors. In 2012 he was the San Diego hotel industry’s Allied Person of the Year. Hian writes a monthly travel feature for The Military Press. His column also appears online at Travel Savvy West, Real Travel Adventures and Roadtrips for Couples. In late 2015, his app, Poker Tutorial: Omaha 101Plus An Insiders Guide to Reno, won a gold in the app category in the North American Journalists Associations annual competition. He believes his secret to writing a good story is having an in-house proofreader and editor (his wife).
Contact: Howard Hian
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