Managing hotel revenue amid the COVID-19 crisis

Abstract

Purpose: The revenue management (RM) discipline is built on the principle of demand-based pricing. This study aims to examine how and to what extent RM can be implemented in the hotel industry during low-demand periods, particularly during the coronavirus disease 2019 (COVID-19) crisis.

Design/methodology/approach: This paper used semi-structured interviews to gather information from hotel RM executives, RM consultants and RM system providers. Participants were asked to think about the impact of COVID-19 on their RM practices. This paper interviewed 26 revenue executives between January and March 2020.

Findings: Core RM processes are still relevant during the COVID-19 crisis; however, not all components are equally important. Business analysis, pricing strategy and demand modeling and forecasting are the most critical RM processes. Inventory and price optimization and setting booking controls are not as important at this time; along with distribution channel management, these processes will become more relevant as demand picks up.

Research limitations/implications: Future research in this area should focus on each core RM process separately and in-depth to understand how implementation changes during the crisis and recovery periods. Future studies should also investigate how these processes operate during the recovery period. The full breadth of consequences of the COVID-19 crisis in hotel RM will likely manifest gradually. Therefore, the core RM processes should also be examined when the crisis is over.

Originality/value: Apart from a few studies that touched on RM-related strategies during economic downturns, to the knowledge, this is the first study to systematically examine the extent to which RM can be implemented during a crisis.

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Identifiers

DOI

https://doi.org/10.1108/ijchm-06-2020-0623

Repository URI

http://researchrepository.napier.ac.uk/Output/2886316