How to take over hotel revenue management without inheriting someone else's mistakes

The first is the performance one. Ownership and the GM want results, and they want them quickly. You have a budget to deliver on, that may have been set well before you arrived on the scene, and targets to meet with the expectation that things will improve on your watch.  

The second is the learning curve. The property has a history, a strategy and a set of embedded decisions that shaped its current performance in ways you won’t fully understand on day one.

Most revenue managers focus on the first and underestimate the second. The ten actions in this article help you to navigate both. 

Finding quick wins in the compset and rate structure

1) Audit your compset

Quite often, the compset you inherit has been in place for a while and may not be the one you’d have built yourself. The properties your predecessor tracked may have been the right frame of reference two years ago, but hotels reposition, renovate and change ownership and therefore may not be as relevant to who your property competes with today. Markets, too, have shifted. Some competitors are no longer competing for the same guest profile as they were before. 

Before you use it to make a single rate decision, verify it. The practical test is whether a guest booking your hotel today would consider each of these properties as a genuine alternative.

Run a search on the main OTAs to see who appears alongside you when filtering for key amenities, location, and hotel size, as this is how many guests are weighing their options. Check each competitor's current positioning, room type mix and channel strategy. Add any short-term rental inventory pulling demand in your key segments. Remove any properties that no longer belong. 

What the inherited list shows and what the market actually looks like are often quite different things.

2) Review the rate structure for obvious errors

When you review what's in place, you may not find a coherent pricing strategy. Instead, there’s a high chance you will discover a series of individual decisions made at different points in time, most of which nobody has looked at since. 

It could be that there is a rate plan that was created for a corporate account that stopped booking two years ago; or a floor rate set when the market was softer, and then never raised once it recovered; or even a minimum length-of-stay restriction applied to peak weekends that now blocks higher-value bookings rather than protecting them. 

Start by pulling the full rate plan list. Properties that haven't had a structured review in a few years often have more active plans than anyone can meaningfully track. You can go a step further with full rate plan audit, to ensure there isn’t any rate leakage and accurately applied across channels.

For each one, ask whether it is still being booked, whether the discount level still drives the behavior it was designed to drive and whether any restrictions attached to it reflect current demand patterns. This could be a conversation with a colleague, but the easiest way to determine exactly how much production each rate plan has generated in the past year using a business intelligence platform like Lighthouse performance.

Owners and operators tend to come back to the specifics: when a discount was compressed, when a rate moved and what triggered the decision. That record becomes useful evidence when the larger structural conversations come later.

Investigating pace, overbooking and distribution

3) Map the pace and pick-up picture

Before you form a view on pricing, understand how this property picks up business across the full calendar. This phenomenon is known as seasonality in hotel commercial strategy. Where are the natural demand peaks? Where does pace consistently fall short? Does demand build steadily, or arrive in short concentrated bursts?

Booking behavior often varies significantly by day of week and segment. A hotel with a 10-day average lead time may have leisure guests booking two weeks out while corporate arrivals book within 48 hours. Averages flatten those differences, and the differences are where the inherited strategy either worked or didn't. 

Virginia McShane, Senior Manager of Commercial Strategy Services at Lighthouse, adds a reason to treat that inherited data with caution: "Historical data is still very relevant and important to forecasting, but we should also be aware that things can and have changed. The way that people travel is different, the way they book hotels is changing."

Look for dates where pick-up accelerated sharply, periods where the hotel ran consistently ahead of or behind its targets. Pay particular attention to nights where the hotel came close to selling out but left the last few rooms unsold, or sold out earlier than necessary at below-peak rates. Both patterns point to inherited pricing or restriction decisions that cost revenue on your highest-demand nights.

4) Understand the overbooking strategy

Most hotels have an overbooking threshold on paper. What's less clear is how that number was arrived at, when it was last reviewed and whether the front desk team has ever actually worked with it.

Start by asking the front desk manager directly what happens when the hotel goes over by two rooms.

Their answer tells you whether the stated threshold reflects how the property actually operates, or whether it was set by a previous revenue manager and never really tested. A threshold the operations team never understood the reasoning behind will get quietly abandoned when it matters most.

You are not trying to change anything yet. You are trying to understand whether the inherited strategy is workable going forward.

5) Identify your repeat guests and what they're worth

Repeat guests tend to be among the most undervalued assets in any hotel's revenue picture, forming part of your base business. They mostly book direct, carry rate agreements that predate the current PMS and have expectations around room type and service that the team has learned to manage quietly. 

In the data, they can look unremarkable, with modest volume and rates that appear below market. But their reliability, low acquisition cost and lifetime value often make them worth considerably more than a higher-rated transient guest who came through an OTA.

Repricing them without understanding this is one of the fastest ways to undo the goodwill a previous RM spent years building. Before you touch anything in this segment, ask reservations to walk you through the top returning accounts, who they are, what they pay and what they expect.

6) Surface the demand the data doesn't capture

Much of what drives demand at any hotel lives in the institutional memory of the team rather than in any report. An event that sends a wave of bookings every spring might look like nothing more than a busy week in the data. A long-standing group might appear as a one-off with no context around it. The only way to surface these patterns is to ask.

Hudson Wood, a revenue manager who works across multiple properties, explains how he goes about it. "Typically, when I start working with a hotel, I don't really change a lot in the beginning. I want to hear out the hotel, see what they like to do, and what has historically worked." 

When it comes to understanding demand, that means asking the right questions directly. "If you are working with multiple hotels, you are rarely familiar with the area or market, so I rely on the hotel to provide me with some of the background insights. What are the trends? What are the weekends like? What big events do we have? What are the normal booking patterns? Do you get a lot of same-day pickup or is the booking window three or four days?"

Take those questions to the GM and the sales team. Cross-reference what you hear against the pace data. The gaps between what the team knows and what the numbers show are where the most useful discoveries tend to sit.

7) Audit the distribution mix

Pull your channel contribution report from the CRS and look at room nights and revenue by source over the past 12 months. You're looking at how the channel mix sits against occupancy. If you're running 94% occupancy in June and 65% of those bookings came through an OTA, that's the kind of revealing insight about how the channel strategy has been managed.

OTA commissions typically run 15–20% of the booking value, but the question you're really asking isn't about calculating cost. Rather, you are checking whether the reliance on OTA in high-occupancy periods was a deliberate call or just something that has been overlooked because nobody has reviewed the channel mix. Where you find high OTA reliance during strong-occupancy periods, you can get more strategic with fewer promotions, less discounting during the periods where you know you can fill without them.

The other thing to check is displacement. On nights where the hotel ran at high occupancy, OTA bookings may have displaced guests who would have booked direct at a better net rate. On softer nights, the same channel may have delivered demand that wouldn't have come any other way.

Setting the foundations of your revenue strategy

8) Know what's already on the books

Before you start setting transient rates, you need to know what's already committed. Group blocks and corporate contracts will fill certain periods regardless of what you do with the rate, and your transient pricing works around them. What accounts are contracted and producing? What group blocks are confirmed, and for which periods?

Getting caught out by a large group block you didn't know about, or pricing into a period where a corporate account has just cancelled, are easy mistakes to make early in a role. You just need to know what's on the books before you start setting rates. 

9) Set your own performance benchmarks

The targets you inherit may not be the right ones. They reflect someone else's read of the market, their strategy and what seemed achievable when the forecast was built. Check whether the assumptions underneath still hold before you adopt them.

Build your own baseline from what you've learned. Virginia from the Lighthouse CSS team is specific about what that should capture. "When we're looking at pick-up and pace, it's not just about the quantity of reservations. You have to take into consideration whether it's a good pick-up. Was it at a good rate? Was it a good market mix?" Volume and rate quality need to be tracked separately. Benchmarks that only measure one will mislead you on the other.

Those benchmarks also shape how you report to ownership. When you're four weeks in and presenting pace, you want to be reporting against numbers you set yourself and can stand behind.

10) Document what you've learned

After working through all of this, you will have learned things about this property that are not written down anywhere. Put it in a document. Cover the overbooking threshold and whether it has ever been properly used, the repeat guest segment and the rates attached to it, the demand patterns that don't surface in the data and the rate structure decisions that predate you.

Two or three pages is enough. The team needs to make good calls when you're not in the room, and whoever comes after you shouldn't have to start from scratch. Some teams take this a step further with standardized reporting packets that keep every property on the same structure and live in a searchable archive, so that institutional knowledge is preserved and built upon, rather than disappearing with each handover.

Making better calls from day one

The ten actions in this guide are straightforward in principle. In practice, most of the data work takes time you don't have. Ownership expects results before you've had the chance to build a proper picture of the market, which means the earliest decisions often get made on incomplete information.

Lighthouse gives revenue managers real-time competitor rates, forward-looking demand signals and market-level performance benchmarks from day one, so the data foundation for the first few actions is already there, rather than something you piece together over weeks.

Gianluca Guarino has navigated that pressure eight times. As Revenue Manager at Campus X, he takes over short-stay properties across Italy, often entering markets with no historical performance data to draw on. "When you open in a market you don't know, it usually takes months to learn where you stand. Lighthouse gives me that understanding on day one, so I can position us correctly from the start."