Marketing and Revenue Management
The Marketing and revenue management domain tests how a property creates demand and prices inventory to maximize profitable revenue, not just occupancy. Questions combine segmentation, distribution costs, digital marketing, forecasting, and displacement analysis.
Metrics and segmentation
Occupancy = rooms sold ÷ rooms available; ADR = room revenue ÷ rooms sold; RevPAR = room revenue ÷ rooms available, or occupancy × ADR. TRevPAR adds ancillary revenue, and GOPPAR measures profit after departmental and undistributed costs. Segment demand into transient retail, corporate negotiated, group, OTA, wholesale, and loyalty. Use rate fences such as advance purchase, nonrefundable, length-of-stay, and member rate to protect higher-rate demand.
Distribution and digital marketing
Direct bookings avoid OTA commission but require an effective website, search, email, and reputation management. OTA bookings bring reach at a commission cost; compare net revenue, not gross ADR. Keep rate parity obligations in mind, and manage inventory through a channel manager connected to the PMS and CRS. Measure cost per acquisition and repeat rate. Reviews and response quality affect conversion.
Revenue management
Forecast demand by date and segment, watch the booking curve, and set inventory controls. Overbooking must be paired with a walk policy, compensation, and relocation plan. For groups, use displacement analysis: compare total group revenue, including ancillary spend, with the transient revenue the group displaces.
Worked example
A 100-room hotel forecasts 90 transient rooms at $200, or $18,000. A group requests 25 rooms at $150, or $3,750. Only 10 rooms are free, so accepting displaces 15 transient rooms worth $3,000. Net room revenue change = $3,750 − $3,000 = +$750. If the group also buys $1,200 in banquet revenue with a 30% margin, the contribution improves further. Accept only if the net contribution beats alternatives and the forecast is reliable.
Traps
Choosing the highest ADR without considering net channel cost; accepting group business without displacement; discounting all segments to fill rooms; and overbooking without a legal walk plan.