If actual occupancy exceeds forecast, what is the best course of action to maximize revenue without harming guest value?

• A. Decrease pricing to attract more guests
• B. Cancel reservations to reduce demand
• C. Increase pricing and/or offer targeted upsells to maximize revenue while maintaining guest value
• D. Do nothing

Answer: (C)

When demand is stronger than forecast, the focus in revenue management is to capture additional value from the existing guest mix without diminishing their experience. The best approach is to raise pricing where appropriate and offer targeted upsells that enhance the guest stay. By increasing the average rate and presenting appealing add-ons—such as room upgrades, breakfast or lounge packages, late checkout, or bundled experiences—you boost revenue per guest while still delivering value. This keeps the guest experience intact and can even improve perceived value if the upsells align with what guests want.

Lowering prices would attract more guests but at the cost of revenue per guest and can dilute brand value, especially when occupancy is already high. Canceling reservations is disruptive and harms trust and long-term revenue. Doing nothing wastes an opportunity to optimize yield when demand exceeds forecast.