Certified Hospitality Manager (CHM) 2025 – 400 Free Practice Questions to Pass the Exam

In the context of hospitality, revenue management refers to the strategic approach of maximizing revenue through planning and pricing strategies. This involves understanding consumer behavior, market trends, and pricing elasticity to optimize revenue from available inventory, such as hotel rooms or restaurant tables. By analyzing data on demand, competitors, and market conditions, hospitality managers can set dynamic pricing strategies that allow them to sell the right product to the right customer at the right time for the right price.

This strategy is essential because the hospitality industry often deals with perishable inventory; for example, if a room is not sold for a particular night, that opportunity to earn revenue is lost forever. Thus, effective revenue management seeks to fill that inventory as profitably as possible, often using techniques like dynamic pricing, segmentation of customers, and promotional strategies tailored to different market segments. It involves both short-term tactical decisions and long-term strategic planning, underscoring its significance in driving profitability in the hospitality sector.