Hotel revenue management, connected to your costs

Price, occupancy and channels only count if more money is left after delivering the service.

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Hotel revenue management means deciding at what price, to which guest, through which channel and how far in advance you sell each room, in order to get the most revenue from your capacity. At Hostelella it is done by our consulting team and tied to costs and operations, because more revenue does not always mean more profit.

It is aimed at independent hotels and small groups that set prices by season or by watching competitors and want criteria of their own. You do not need to start by buying software: you need history, a forecast and the discipline to review the same figures regularly.

We are not a PMS, a channel manager or an automated pricing tool. We work with the data from the tools you already have. We start with a free assessment, present a tailored proposal and review results with you every month. There is no lock-in, and the final say is always yours.

The three metrics, one sentence each

All calculated over the same period, using room revenue net of tax.

  • Occupancy: the percentage of available rooms you have sold (rooms sold ÷ rooms available × 100).
  • ADR, or average daily rate: what you charge on average for each room sold (room revenue ÷ rooms sold).
  • RevPAR, or revenue per available room: what you earn for each room you have, sold or not (room revenue ÷ rooms available).
  • The three fit together: RevPAR = ADR × occupancy. You can raise RevPAR by filling more rooms, charging more, or both.

What those metrics leave out

Two hotels with the same RevPAR can earn very different amounts.

  • Commissions: a booking through an intermediary leaves less than the same booking made direct.
  • Cost per occupied room: cleaning, laundry, guest amenities, utilities and breakfast.
  • Labour: filling up at low rates can require more housekeeping and front office hours than those rates pay for.
  • That is why we also look at revenue net of commissions and GOPPAR, gross operating profit per available room.

How we connect revenue with operations

The occupancy forecast is also the workload forecast.

  • We share the forecast with housekeeping, front office and F&B to plan schedules and purchasing.
  • We work out what it costs to service an occupied room, so you know the rate below which selling does not pay.
  • We assess promotions and group rates by what they leave, not just by how many rooms they fill.
  • We include guest spend on breakfast, bar and restaurant when comparing segments.

What we do with you

Orderly, repeated work rather than a tool.

  • We organise your history: occupancy, ADR and RevPAR by day of week, season and channel.
  • We prepare a demand calendar with public holidays, events and seasons.
  • We define a rate structure and clear rules for raising rates, lowering them or closing sales.
  • We check booking pace frequently and review results with you every month.

Questions before starting

What is revenue management in a hotel?

It is the management of prices and availability to sell each room to the right guest, at the right time, at the right price and through the right channel. It relies on history, demand forecasting and tracking occupancy, ADR and RevPAR.

What is the difference between ADR and RevPAR?

ADR measures the average price of the rooms you sold. RevPAR spreads that revenue across all available rooms, sold or not. A high ADR with a half-empty hotel gives a low RevPAR, which is why RevPAR better reflects how well you use your capacity.

How is RevPAR calculated?

Divide room revenue for the period by the rooms available in that period. You can also multiply ADR by occupancy. With an ADR of €100 and occupancy of 70%, RevPAR is €70.

Is revenue management only for large hotels?

No. A small hotel has fewer rooms to absorb a pricing mistake, so it matters just as much or more. What changes is complexity: fewer segments, fewer rates and simpler tracking.

Do I need a revenue management system (RMS)?

It depends on the size and complexity of the hotel. Before buying a tool, it helps to have your history, rate structure and review routine in order. If it is worth it after that, we look at it with you.

Does Hostelella replace my PMS or channel manager?

No. Hostelella is not a PMS or a channel manager. Revenue is handled by our consulting team using the data from your current tools.

Check whether your revenue turns into profit

Request a free assessment and we will review pricing, channels and costs with you.

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