What are the challenges you’ll face when implementing a revenue strategy?

Implementing a solid revenue strategy comes with challenges, as we’re sure you’re aware! It’s important to firstly remember why you’re optimising each of the channels you’re optimising, and secondly, how direct bookings will reduce costs, and produce a higher lifetime value for each guest.

So, where do the challenges come from? Well they’re internal and external – you’ll know yourself they come from within your role and the hotel, and also from the wider market environment.

Take a look at our infographic for the key ones we’ve identified! And read more detail below.

Challenges from within?

Your skillset

The revenue management role requires a set of specialized skills and knowledge! As it’s such an expansive role, identifying and developing the right skills is your first challenge. You may already be an expert with years of rich experience behind you – or maybe you’re only starting out with limited knowledge on the ins and outs of the business.

Either way, the right training will give you the fundamentals you need and keep you up to date on the latest best practices. This could mean finding a course, maybe part time, that suits your schedule, constantly listening and picking up expert tips from a mentor, or even just taking an out-of-hours interest in it and doing your own research!

Technology that falls behind

Technology is rapidly developing all the time, and this can cause issues for smaller properties if their various systems don’t communicate well with one another. We’ve written recently about this issue specifically – take a look here.

Without the right tools and technology, RMs can end up spending endless amounts of time on tasks that shouldn’t be as laborious as they’re proving to be day to day.

Implementing a strong, sophisticated revenue strategy on multiple online channels will require an investment in technology. When it’s difficult to find, it can hinder your progress. Try to make as compelling a case as possible to find and purchase the right technology for your hotel!


As is the case on any team, good communication is often the most important thing, and can also be the most difficult thing to get right! And, when you’re trying to develop a decent strategy, it’s crucial that everyone aligns, especially your revenue and marketing teams.

The key is to ensure everyone is on the same page, aware of the same challenges, and striving towards the same goal.

The cost of distribution

Distribution costs must be measured completely. This is, however, easier said than done!

A combination of traditional channels (GDS, phone) and online (brand website, OTAs, Google Hotel Ads, etc.) can make it complicated to discern true costs. For example if a guest sees your ad online and visits your website before calling to book, how do you know where they came from, and how then, can you properly attribute that cost?

These ‘invisible’ paths to purchase can distort your view of how much your online and offline activities are truly worth.

It’s important to invest in channels that will work for you and contribute to consistent brand awareness, considering the likes of Google Hotel Ads for example, which are growing stronger and more dominant by the day.

Running consistent ads helps to keep you and your website at the top of search results, even when OTAs are bidding on your hotel brand name, which, if you’re on an OTA – and sometimes even if you aren’t – they are! Running ongoing brand campaigns also contribute to your overall brand image, and can even affect offline bookings.

As an RM, focus on the costs for each channel. Consult with your sales & marketing teams in regards to the marketing efforts that lead people to these channels. They can look at attribution models to get a better picture of how people are getting where they’re getting.

If you need help or more guidance on your digital strategy, this blog should help!

Challenges from the industry?

OTAs dominating online sales

OTAs typically account for 30-40% of the market currently.

Although they certainly have their place within your hotel’s strategy, try and think of them more as a support, rather than your go-to solution for selling rooms. Even if you don’t have big budgets, that’s OK! Knowing who your guests are and what they want is an important step towards increasing your direct booking. Once you have a handle on this, start building your own website and online presence. Your website, social channels and digital marketing ads are key to your brand growth and increased revenue.

Pricing factors and strategies


Pricing factors include both macro and micro issues.

An example of a macro issue is the uncertainty caused by Brexit in the UK!

An example of a micro issue might include prices being changed by third parties due to regional differences, discounts, or errors. Staying on top of those to maintain parity with the direct channel is a time-consuming challenge, although there are tools to help.

If you aren’t legally required to maintain rate parity on all your online channels, consider a pricing strategy that allows you some intelligent flexibility. For example, you might want to offer a 5-10% discount on specific channels.


Finally, what pricing strategy is your hotel using? Choose a data-driven approach to any pricing plan. When it comes to strategy, you can choose between a traditional BAR strategy or a much more data-driven open pricing. Consult all your marketing analytics to stay on top of marketing trends!

If you have the capability, in terms of technology and time, open pricing is well worth the investment.

Open pricing is the idea of raising or lowering prices on different channels based on demand, rather than closing channels out or adding length-of-stay restrictions to discounted channels when demand is high. With open pricing, the door is always open – but at prices that suit demand on each channel.

Are hotels investing in technology?

It’s so essential that hotels invest in the right technology in order for them to secure more direct bookings. We’ve written extensively on the importance of the right technology, most recently here!

The winning combination your property absolutely needs is well-trained revenue and marketing teams (who work seamlessly together) and up to date technology that will create a flawless user experience for guests visiting your site. This investment is crucial to your book direct strategy and your success in terms of increased revenue.

You, as an independent hotelier, can be flexible!

Independent hotels are actually more suited to take on these challenges than bigger chains with more strictly defined rules and regulations!

As an independent, you can deliver personal experiences, driving greater loyalty. You have freedom to play with your brand. You can try different marketing channels and ad formats relatively quickly!

You also have more margin to play with.

So use it to your advantage!

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