Pearson New International Edition International pcl tp indd 1

REVENUE MANAGEMENT
can impose MLOS or CTA policies. Revenue managers must also carefully review
overbooking policies and, perhaps, act conservatively when estimating the num-
ber of no-shows likely for dates on which the property is oversold.
Revenue managers must also manage ADR. Increasing rates when justifiable
will increase RevPar; decreasing rates to increase occupancy does not typically
result in increased benefits to the hotel. However, there are times when room dis-
counting is in order; revenue managers must know about and use these occasions
to consider the need for rate reductions.
Four measures are commonly used to evaluate the effectiveness of occupan-
cy and ADR decisions: occupancy index, ADR index, RevPar index, GoPar—all of
which have advantages and shortcomings. The best approach is to use each
measure to determine where corrective actions can be taken to increase RevPar.