DOI link for Revenue management
Revenue management book
Revenue management is often confused with yield management (YM).1 But YM is just one component of RM. Yield is the ratio between actual and potential room revenue.2 Actual room revenue is that revenue received from room sales. Potential revenue is what a hotel would have received if their rooms were sold at full price or rack rates. Keep in mind, of course, that for this to be realistic, the full price rates must be realistic. Rack rates that are rarely achieved have little meaning for true yield ratios. Also realize that a hotel will have any number of different rates, including suite rates. All these must be calculated to determine a true yield ratio. Incremental revenue of food and beverages also cannot be ignored. Thus, a hotel can reach the same, better or poorer yield through different combinations of average rates and occupancy.