Return on Investment or Revenue Opportunity Uplift?

When developing revenue management strategies, Miami hoteliers all-too-often focus on one thing: return on investment. It makes sense: Return on Investment (ROI) does indeed deserve to be at the forefront of a hotelier’s mind when considering practically anything. Whether it’s investing in a new property, installing new technology or considering new advertising alternatives. No matter what you’re spending on, ROI matters – there’s no doubt about it. However, just as everyone has grappled over ROI, you’ll be hard-pressed to find a serious hotelier who hasn’t at least once asked the question, “Is there an alternative?”

The answer is: maybe, depending on your circumstances.

ROU, or Revenue Opportunity Uplift, is an alternative to ROI that has gained some traction in the hotel revenue management industry. It’s an interesting idea, and one that anyone involved in hotel revenue management consulting in Miami should take seriously. To explain, let’s compare how ROI and ROU work, and how they differ.


Many hotel revenue management companies in Miami calculate ROI based on some fairly simple factors. At its most basic, ROI is little more than an overview of the previous year’s performance. This, of course, is deeply problematic. Was last year an ordinary year? Was it particularly good? What external pressures did the hotel face? How would it fare under better (or worse) conditions?

ROI can often fail to answer these basic – yet critical – questions. Yet these are the exact questions that keep many hoteliers up at night. Without clear answers, hotel revenue management for Miami hoteliers can be a challenging task, to say the least.

ROU offers an intriguing alternative. The idea here is to closely assess a hotel’s performance over a 90-day window. Not only that, but part of the ROU process is the creation of a kind of virtual hotel. This placeholder hotel is stripped of basic management systems like automated pricing, overbooking systems and the like. This means the virtual hotel can be manually set to simply accept clients on a first come, first serve basis. In short, it’s a stripped down, simplified version of your real hotel.

At this point, you might be wondering what the point of such a program could possibly be. After all, such a program says little about what your hotel is actually doing – but that’s not the point. The point is to show what your hotel isn’t doing. Most automated pricing systems and similar technology react to demand, rather than anticipate it. In fact, ROU advocates argue that by contrasting your hotel’s performance with that of a stripped down virtual hotel, you can better pinpoint inefficiencies in your existing management systems.

Ultimately, the objective here is to rebuild your management systems from the ground up to be leaner, meaner and just generally better. It’s an interesting new take on hotel revenue management consulting Miami should be taking seriously. After all, when it comes to revenue management strategies, Miami can always do better.