Brian Athas on Revenue Management

Ask Brian Athas about the important role revenue management has come to play in helping determine room rates today, and he will explain that, until a couple of decades ago, the analytical tools to make that happen didn’t exist.

“Now, thanks to the technology and the data we can generate, revenue management is essential in not only setting rates in the short term, but also in forecasting, all of which helps determine profitability,” Brian said.

As M&R’s vice president of revenue management, Brian, a 20-year hospitality industry veteran, heads a team of seven regional revenue managers, who are based either in the Manhattan office or who work remotely. Their challenge every day, in simple terms, is “to sell the right room at the right time at the right price,” he said.

Underlying that challenge are two basic realities.

First, the industry has adopted dynamic pricing. This means the price of a hotel room on a given night can change, depending on the market, prior history, the night of the week, prices being charged by competitors and the number of rooms left to be sold, among other factors. In a highly competitive market like Manhattan, room rates are adjusted as often as every hour. In other markets, rates change less often.

Second, unlike other commodities, which can be sold the following day or the day after that, a hotel room must be treated as a “disposable asset:” The loss of a room not sold on any given night never can be recouped.

To sell the right rooms at the right prices, revenue managers apply several techniques, including differentiating prices by customer type and using multiple distribution channels to manage price more effectively. Finally, they must balance discounting, price elasticity and optimal price mix with each hotel’s brand positioning and sales strategies.