Pearson New International Edition International pcl tp indd 1

REVENUE MANAGEMENT
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however, revenue managers significantly overestimate or underestimate demand, crit-
ical errors can be made as room rates are established and marketed. That is why an
FOM’s (or revenue manager’s) ability to accurately forecast demand is so critical to a
hotel’s financial success. By combining knowledge of supply (which is readily known)
and forecast data (which help to estimate demand) with an understanding of the var-
ious rate types used in the industry, revenue managers can best manage the relation-
ship between guestroom supply and demand.
Rate Types
When revenue managers consider a hotel’s room rates, they must generally consider
multiple rate types. Because of the importance of room rates, revenue managers must
become familiar with the common rate types used in most hotels.