At RoomPriceGenie, we speak with hundreds of independent hotel owners and general managers every week. And we hear the same misconceptions again and again.
These myths lead to mispricing, lost revenue, and too much time spent managing rates manually.
Let’s set the record straight. Here are five of the most common, and most costly, myths about hotel revenue management.
Myth #1: Maximizing Occupancy Is Always the Top Priority
Many hoteliers fixate on occupancy. Sure, a full house feels like a win. But if you’re filling rooms by underpricing them, you’re missing out on potential revenue.
The reality: The goal of revenue management is to maximize revenue, not just occupancy. In the right conditions, raising rates can generate more revenue than selling every room. It’s also often more profitable, since you save on turnover costs.
A smarter strategy: Focus on RevPAR (Revenue per Available Room), which reflects both rate and occupancy to give a fuller picture of performance.
50-room Hotel Example: Which is more profitable?
- Selling 50 rooms at €80 = €4,000 revenue (100% occupancy, €80 RevPAR)
- Selling 40 rooms at €120 = €4,800 revenue (80% occupancy, €96 RevPAR)
By charging the higher rate, you earn more revenue and save on the cost of servicing 10 extra rooms.
How a revenue management solution helps: RoomPriceGenie automatically balances rate and occupancy to maximize revenue. It also adapts to your preferred pricing strategy, whether you’re focused on growing occupancy, rate, or both.
Learn more: Revenue Management Essentials for Independent Hotels
Myth #2: Always Charge the Maximum Rate on Peak Nights
When demand is strong, it’s tempting to push rates as high as possible. But there’s a smarter way to boost revenue.
The reality: Focusing only on high-demand nights can lead to underperformance on shoulder nights. For example, if you always max out rates on Saturdays but have empty rooms on Fridays and Sundays, you’re missing out on potential revenue.
A smarter strategy: Use minimum length-of-stay restrictions on peak nights to encourage longer stays and increase total booking value.
How a revenue management solution helps: RoomPriceGenie doesn’t just optimize rates. It also recommends availability controls like minimum stays and multi-night discounts to help you earn more revenue across the full booking window.
Learn more: Minimum Stay Restrictions: Smarter Booking Control
Myth #3: Price Just Below the Competition
Some hoteliers set their rates just below their top competitor, hoping to “win” more bookings. It might sound clever, but it might be doing more harm than good.
The reality: Blindly following competitors can lead to serious mispricing. If they’re overpriced, you lose out on bookings. If they’re underpriced, you lose out on revenue. And if you both keep undercutting, you risk starting a pricing war that hurts everyone.
A smarter strategy: Monitor competitors, but prioritize your own data when making pricing decisions. Factor in booking pace, pickup trends, and historical patterns.
How a revenue management solution helps: RoomPriceGenie evaluates your property’s demand alongside pricing for up to ten competitors, continuously adjusting your rates based on real-time conditions.
Learn more: Competitors: Knowing Who They Are and How to Price Against Them
Myth #4: Dynamic Pricing Is Only for Big City Hotels
“We’re in a small town. We don’t need to change rates all the time. Besides, our guests would never accept it.”
Sound familiar?
The truth: Even quiet destinations experience micro-demand shifts, from last-minute events and weather changes to group bookings and cancellations. Dynamic pricing adjusts rates to reflect current demand. And it’s so common today that travelers expect it.
A smarter strategy: Update your prices regularly based on demand signals, booking trends, and lead times, not just seasonality.
How a revenue management solution helps: RoomPriceGenie automates dynamic pricing for hotels, ensuring your rates adapt to real-time demand, even while you’re busy taking care of your guests.
Learn more: Dynamic Pricing for Independent Hotels
Myth #5: Managing Revenue by Spreadsheet Works Fine for Small Hotels
We hear it all the time: “We’ve always done it manually. We don’t need technology.”
The truth: Manual pricing is slow, reactive, and error-prone. In today’s fast-moving market, that leads to missed opportunities and wasted time.
A smarter strategy: Automate your pricing to free up time, improve accuracy, and boost your bottom line.
How a revenue management solution helps: RoomPriceGenie was built for small, independent hotels. It’s easy to use, works 24/7, and delivers a fast return on investment, helping you earn more with less effort.
Learn more: Myths About Revenue Management Technology
Ready to Let Go of the Myths?
Revenue management can sometimes seem baffling and counterintuitive. Here we make things easy for you. In our mini guide “Revenue Management Essentials for Independent Hotels,” we answer the most important questions owners and operators of independent properties have about revenue management.
It:
- Easily explains the core pillars of inventory, pricing, distribution, and performance tracking
- Shows exactly why RevPAR—not just occupancy—should be your north star
- Shares practical tips you can action before your next rate update
Whether you operate a boutique hotel, guesthouse, hostel, campsite, vacation rentals, or some other fabulous property, you will learn essential ways to boost revenue today.
To learn how RoomPriceGenie can help your property increase your property’s profitability, start your free trial of our automated pricing solution today!
