By Konstantin Artemyev

September 24, 2026

When people talk about Revenue Management, the classic formula is still a useful starting point: sell the right room to the right guest, at the right time, at the right price and through the right channel. The formula has not really become outdated. The more interesting question for me is how often an independent hotel is actually organised in a way that allows it to work like this.

In many small and medium-sized independent hotels, there is no dedicated revenue manager. A good specialist is expensive, and in a relatively small property there may simply not be enough work to justify a full-time position. Quite often the organisational structure does not provide for such a role at all, so the Revenue Management function is distributed between the people who are already there. Part of it may sit with the commercial director, some decisions are made by the general manager, the owner may be involved, and sales managers often contribute as well.

I do not see anything fundamentally wrong with this arrangement. A commercial director does not have to be a revenue manager. Their job includes major accounts, negotiations, sales, partnerships and management of the commercial team. A general manager has an even wider range of responsibilities. The difficulty begins when several people influence pricing, discounts, groups, contracts and distribution without having the same analytical picture in front of them.

At that point, commercial decisions can become very subjective. If demand appears weak, a discount may seem like the obvious response. If neighbouring hotels are charging more, raising the rate can look equally obvious. A large group enquiry feels attractive because it immediately fills a substantial number of rooms, while an OTA promotion may be activated simply because the platform presents it as an opportunity. Any of these decisions may eventually prove to be correct, but without analysis there is no reliable way to know whether they are correct for this particular hotel and these particular dates.

This is where I see the practical value of Revenue Management for independent hotels. It creates a common analytical base for decisions that would otherwise be made from experience, intuition or the pressure of the moment. Historical performance, booking window, pickup, channel mix, seasonality, events and segment behaviour do not remove uncertainty, but they make it possible to understand what kind of uncertainty we are dealing with.

The effect is sometimes quite simple. A hotel may look at low occupancy for an upcoming period and conclude that the price should be reduced. But if the booking window shows that most reservations for those dates normally arrive very late, a discount may not create any additional demand. It may simply reduce the price paid by guests who were likely to book anyway. The visible problem is low occupancy today, while the actual question is whether today’s occupancy is unusual for this point in the booking cycle.

I remember one hotel where I was responsible for the commercial department during a serious market downturn caused by external political circumstances. Demand was falling across the market, and many competing hotels responded by cutting rates. The reaction was understandable: fewer guests were travelling, so lowering the price seemed like the natural way to protect occupancy.

Before making the same decision, I asked one of my employees to go through our own data in detail. We looked at the discounts already in use, booking windows, reservation patterns, segment behaviour and the actual effect of the promotions that had accumulated in the system. Some of those discounts were there mainly because the booking platforms offered them and they were generally assumed to work.

After the analysis, a significant part of our Revenue Management response was not to introduce more promotions but to remove several existing discounts. Occupancy still declined because the market itself had contracted, but our ADR increased enough for the hotel to meet its budget. At the same time, some neighbouring properties continued discounting aggressively, cut marketing expenditure and later faced much more serious financial pressure, including delays in paying staff.

I have always found that example useful because it shows why Revenue Management is much broader than finding the right price. Sometimes the correct decision is to leave the rate alone. Sometimes it is to remove a discount, reject a group or simply avoid copying what competitors are doing. These decisions are difficult to make confidently if the only information available is today’s occupancy and the prices visible across the street.

Price, in any case, is only one part of the system. Revenue Management also involves restrictions, rate conditions, length of stay, availability, distribution channels, groups, contract rates and the value of different market segments. A group enquiry, for example, cannot be evaluated only by looking at the room rate offered. The dates matter, the usual demand for those dates matters, the possibility of displacing higher-rated business matters, and so do the costs attached to the booking. The same logic applies to corporate contracts, OTA promotions and special offers.

This leads naturally to another question that I think independent hotels often underestimate: not simply how much revenue a booking creates, but how profitable that revenue actually is. A high ADR looks good in a report, but the commercial result also depends on distribution cost, OTA commission, payment fees, variable room costs and the contribution that remains after those costs are taken into account.

To work with this properly, the hotel has to understand its own economics. From my experience with independent properties, this is often where the available information becomes much less precise. Accounting may be perfectly organised, transactions are recorded, invoices are processed and statutory reports are prepared, but that does not automatically mean that management has the financial information needed for commercial decisions. Accounting and financial management are related, but they are not the same function.

Revenue Management often brings these questions to the surface because they become impossible to avoid. What does an additional occupied room actually cost? Which expenses are truly variable? How much revenue from a particular channel remains after commission? Does a contract still make sense once its full economics are considered? These are financial questions, but they directly affect pricing and distribution decisions.

For a smaller independent hotel, none of this necessarily requires a full-time revenue manager. In many cases, an external specialist can be a more practical solution because the hotel needs the function rather than another permanent position. Regular analysis, forecasting, pickup monitoring and participation in commercial planning can be done without somebody sitting in the hotel eight hours a day.

What matters is that the owner, general manager or commercial director has access to a person who can answer the questions that arise in real commercial work. Should we accept this group? Is this contract rate reasonable? Do we need this discount? Is demand strong enough to raise the price? Which channel should carry which offer? What should we do with a period that currently looks weak, and is any action actually necessary?

The decisions still belong to the people running the hotel. Revenue Management does not replace their experience and it should not turn commercial management into a set of automatic formulas. What it changes is the quality of the information available when those decisions are made. Instead of reacting separately to today's occupancy, a competitor's rate or a new promotion offered by an OTA, the hotel begins to see these things as parts of the same commercial picture.

For me, this is what Revenue Management for independent hotels actually means. It gives commercial policy some continuity, allows the hotel to look beyond the immediate situation and makes it easier to distinguish between changes in the market and changes that require action from the hotel.

The old formula about the right room, the right guest, the right time, the right price and the right channel therefore remains completely valid. The difference is that each of those choices is supported by analysis rather than being made from instinct alone.