Today's Revenue Management thought:-
Predictably irrational.
Have you ever thought about why our aversion to loss is such a strong emotion, but also leads us to make bad decisions. We often focus on what we “may” lose rather than what we “may” gain.
Many of our pricing actions are highly predictable, based on past experiences, achievements, etc., but are at the same time commercially irrational.
Holding fort and trying to sell a room for €200 is irrational when the market’s going rate is €150. So we think we lose €50 if the sale is made…. but in fact we are losing €200 if the sale is not made, but gaining €150 if it is made.
Predicting the “if” in the sales equation is the hard part.
Have a profitable week.
✌🏼