Layer or top-up? Why European hotel investors should include revenue management in their investment decisions

Abstract

Revenue management is an increasingly important tool for hotels to achieve the highest RevPAR (revenue per available room) possible. As RevPAR is the barometer for hotel performance, it follows that an understanding of revenue management strategies and techniques would help investors to have a more thorough understanding of the dynamics behind a hotel's RevPAR, and therefore would enable them to make wiser and more knowledgeable investment decisions in local market conditions. This paper explores the relationship among the different revenue management strategies applied to different types of hotels (limited, focused and full service) and the resulting variations in RevPAR performance specific to the local competitive market and its conditions. [PUBLICATION ABSTRACT]