Hospitality Disaster Readiness: Revenue Management Considerations

Author: Avanti Joglekar

When hotel managers awake to news of a disaster affecting their property, their first concern is rightfully for the safety of guests and employees. Having a plan in place before disaster strikes for the areas that are less likely to be on the forefront of your mind during chaos – the revenue management, operations, and information technology aspects of the property – can mitigate the negative consequences of the situation.


According to the HSMAI’s Revenue Management Advisory Board, balancing fairness with revenue optimization tactics calls upon the “art” side of the art and science of revenue management. Being perceived as “price gouging,” or exploiting the situation by charging higher prices than normal, is one of the worst responses a business can have to a disaster.  Best practices include freezing prices and avoiding charging a higher rate than has been charged in the last 30 days. For those who use an automated revenue management system, understand how the system interprets the state of emergency, and if there’s the option for humans to take over or a “catastrophe mode” that allows for correct interpretation of the emergency at hand.

Having a communication plan in place with your revenue management, public relations, marketing, and sales teams can save considerable time when disaster is on the horizon. While revenues may be negatively affected during an emergency situation, it is possible to maximize your PR. The communications team can identify worst-case scenarios if your property gets the pricing "wrong," and also promote awareness of how your business is helping the situation at hand. 

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Another communication consideration worth planning for is how your team will literally communicate with one another if regular communication channels and infrastructure are disrupted at your hotel or among members of the remote team. Additionally, consider how the entire revenue team will manage the possible influx of business that come through after an emergency from FEMA, construction, and insurance companies. Coordinating your sales team's response can mitigate the pitfalls hotels face in times of disaster, especially if your portfolio extend across multiple hotels. 

We recently released an article,“Disaster Recovery and Readiness: Considerations for Your Hotel Revenue Management.” This article outlines the thoughts and processes that need to be managed in the face of, or as a preface of a disaster, natural or not. There are detailed  sections on Humanitarian and Ethical Considerations, Coordination with Sales and Marketing, Segmentation, Pricing, and Distribution, Competitive Set, and Demand Forecasting.

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