What "50 shades of grey" and Revenue Management have in common

Let me take you back to yesterday evening. My wife and I decided that we’d go for a morning walk. The plan was simple: the weather forecast promised it would be chilly but clear. Perfect for some fresh air and quiet time together.

Fast forward to this morning, and bam—20 centimeters of snow greeted us. That lovely walk? Dead on arrival.

Revenue management is no different.

Sure, you’ve got your forecasts, your data, and your plans, but reality?

Reality has a habit of throwing snowstorms at you when you least expect them.

Why Revenue Management is Fifty Shades of Grey

Revenue management is not black and white. It’s a world of “it depends.”

Here’s why:

Forecasting Isn’t Gospel

Just like my weather app, your demand forecast isn’t carved in stone. You project 80% occupancy for the weekend, but suddenly a corporate group cancels, or—surprise—a competitor drops their rates 20% overnight. Now you’re scrambling to fill rooms.

Lesson? Forecasting is a guide, not a guarantee. Be prepared to adapt faster than a snowstorm changes plans.

The Data Trap

Data is like that friend who always gives advice but never quite understands the full story.

It can tell you that last year’s ADR on this date was $120, but it doesn’t know the new highway construction driving guests away or the influencer who just tagged your hotel.

Real-world example: you adjust rates based on historical trends & forecasted demand, but then an unplanned event happens or a pipe breaks ..... you not only screwed this years data but next year. No context, data is binary.

The Capacity Quandary

Imagine you’re at 90% occupancy with two room types left: the standard room and the suite. Do you double sell the standard room to then upgrade or hold out for both being booked at the Room type rate???

There’s no perfect answer—just shades of grey, balancing today’s revenue against tomorrow’s guest expectations.

Conversion Chaos

Your website is optimized. Your rates are competitive. Yet bookings lag. Why?

Maybe it’s because guests are swayed by a competitor’s flashy promotion. Maybe your cancellation policy is too strict. Or maybe someone didn’t clear 20 centimeters of metaphorical snow off your digital doorstep (hello, clunky booking engine!).

Embrace the Grey

The truth is, revenue management in 2024 is about living in the grey. Yes, we have tools, data, and systems that make us smarter, but they’re only as good as the people interpreting them.

It’s about balancing the art and the science, navigating surprises, and adjusting to what the day throws at you.

And just like that I got downstairs, got the boots, ignored the snow and we walked anyhow, sometimes you need to roll with what you’ve got. Shift strategy. Rethink priorities. Embrace the uncertainty. Ot stick with your guns and go for it.

Revenue management isn’t about getting it right every time—it’s about making the best decision you can with the information you have. It is the sum of your decisions, not one in isolation.

Love,

Fabi