The Revenue Experiment
This story is about how curiosity taught me to look beyond the obvious.
While serving as Front Office Manager at a large hotel catering predominantly to leisure groups, I became fascinated by distribution.
At the time, revenue management – both in terms of systems and culture – was still emerging.
Convincing management and ownership to invest in dedicated systems and specialised staff often required as much selling as the rooms themselves.
Most business was negotiated with wholesalers and tour operators at fixed prices.
Something about the booking and distribution methodology fascinated me.
I wanted to understand how it actually worked.
Not the theory. The mechanism. The chain.
How did guests find us?
Why did some channels perform better than others?
Why did some market segments behave differently from others?
I became absorbed by questions such as:
- Global Distribution Systems and Online Travel Agents
- Distribution costs, commissions, mark-ups, kick-backs
- Market segments and sources of business
- Pricing, net or inclusive of VAT and city tax
- Demand, pickup, cancellations, booking pace, and double-occupancy density
- Room categories and benefits, addressing leisure, Meetings & Conference, and business needs
- Yield management
- Reputation management
I experimented relentlessly.
Without specialised software. Without automated tools.
This was long before today’s user-friendly property management systems and apps.
All I had were spreadsheets, observation, curiosity, and adjustment.
I changed one thing. Observed the result. Changed another.
Observed again. Slowly, patterns started to emerge.
The result was not merely better occupancy.
The result was a different business model. New market segments emerged.
Dependence on low-yield wholesale business decreased.
The hotel began attracting guests who had previously never considered it.
What had been considered an out-of-town wholesale hotel gradually became one of the city’s strongest online performers.
Looking back, the lesson was not revenue management.
The lesson was curiosity.
Understanding the mechanism often creates opportunities that remain invisible to others.
Thank you for reading my story.
This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.
If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.
I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.
Curiosity, humility, and continuous learning remain among the most valuable tools we possess.
Terminology for non-hoteliers:
- SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
- KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
- ADR: Average Daily Rate – the average room rate paid by guests.
- RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
- Occupancy: The percentage of available rooms that are occupied.
- DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
- AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
- CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
- PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
- OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
- GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
- CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
- F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
- Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
- MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
- ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
- USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
- GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
- EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
- COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
- FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.
About the Author
Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.
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