Despite having all checks and systems in place your hotel’s bottom line can suffer because of revenue leakages, which usually go unnoticed.
Revenue leakages occur when certain actions lead to loss of revenue, eventually leading to a decline in your planned revenue. To explain it in simple language assume you fix the price of your rooms and estimating your revenue based on it, but if one or more of your distribution channels sell it at a lower price, you face Rate Disparity accompanied by Revenue Leakages. With the increased popularity of online booking channels, the complexities of distributing your inventory have also increased. Hence, offer more chances of revenue leakages. Industries with perishable product and services like travel and hospitality frequently face this challenge.
Following are some common grounds of revenue leakages:
- Deliberate attempts of price discrepancy like undercutting
- Errors in your revenue management software
- Leakages due to lack of communication between departments
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