Revenue Is Vanity. Profit Is Sanity.

And why hospitality keeps getting this backwards

By the time January comes around, hospitality is usually running on fumes.

Black Friday. Cyber Monday. Pre-Christmas promotions. January sales. Weeks of “limited-time offers” and “last chances”, all designed to prop up demand through what everyone knows is a tough trading period. For hotels, conference venues and event spaces in particular, January has a habit of exposing every commercial crack that’s been quietly papered over during the year. Diaries look thin, enquiries slow down, and budgets suddenly feel a lot tighter.

It’s in this moment, when patience is wearing thin and pressure is rising, that a familiar refrain starts echoing around meeting rooms:

“We just need to drive more revenue.”

It sounds practical. Sensible, even. After all, if the bookings aren’t coming in, surely the answer is to stimulate demand. Drop the price, add an offer, give people a reason to buy now. And for a brief moment, it works. The graph twitches upwards, the phones ring, the calendar fills.

But scratch beneath the surface and a more uncomfortable question emerges. Are we actually fixing the problem, or just postponing it?

Because in hospitality, an obsession with revenue at moments like this often masks a deeper issue. Revenue feels like progress, but it’s a poor proxy for business health. And when it becomes the primary objective, especially during slow periods, it can quietly erode the very thing businesses need most.

Profit.

The hospitality paradox

Hospitality has a genuine structural challenge that shapes how decisions get made. We sell inventory that expires every night. An unsold bedroom, an empty table, a quiet events diary, once the moment passes, the opportunity is gone for good. That reality creates a powerful fear of wasted capacity, and that fear drives behaviour.

When demand softens, the instinctive response is to fill the gap. Prices get trimmed, offers get rolled out, distribution widens, and suddenly the business looks busy again. On paper, that feels like a win. In practice, it often leads to a familiar paradox: full hotels, stretched teams, and thin margins.

The industry has become remarkably good at being busy without being profitable!

Why revenue feels comforting, and profit doesn’t

Part of the problem is psychological. Revenue responds quickly to action. You discount, you promote, you open the taps, and the numbers move. Profit, by contrast, is slower and more stubborn. It demands discipline, restraint, and uncomfortable conversations about pricing, value, and customer choice.

So organisations gravitate towards what feels controllable. Selling more looks like progress, even when the underlying economics haven’t improved. The danger is that not all revenue is created equal. Some of it is fragile, some of it is expensive, and some of it actively damages long-term performance.

Yet it all gets counted the same way.

The uncomfortable economics of profit

At a basic level, there are only a handful of ways any business can improve profitability. You can cut costs, sell more, or charge more. Hospitality, understandably, spends most of its energy on the first two. Efficiency programmes are launched, suppliers are squeezed, occupancy targets are chased.

What receives far less attention is price, despite the fact that small changes in price have a far greater impact on profit than almost anything else. Unlike volume growth, price increases don’t bring additional operational complexity with them. There are no extra rooms to service or extra staff to rota. The improvement drops straight through to the bottom line.

And yet price is treated as something delicate, technical, or untouchable. It’s handed over to revenue management software and ring-fenced from strategic debate, as if it exists in isolation from how the brand is positioned or experienced.

It doesn’t.

Price is a message, not just a mechanism

Customers don’t encounter prices as abstract numbers. They interpret them. A price signals confidence, quality, reassurance, or risk long before any rational calculation takes place. Whether something feels “worth it” has as much to do with perception as it does with pounds and pence.

This is where hospitality often missteps. Price is discussed internally as a lever for demand, but experienced externally as a reflection of value. When those two perspectives drift apart, trust erodes. Discounting might stimulate short-term bookings, but it also reframes what the experience is supposed to be worth.

Once that anchor shifts, it’s very hard to pull it back.

The quiet damage of discount culture

Discounting has become the industry’s default response to uncertainty, partly because it looks decisive. But economically, it’s one of the most destructive habits hospitality has normalised. A small price cut requires a disproportionately large increase in volume just to stand still on profit, something that’s rarely achievable in practice.

Worse still, discounting doesn’t just affect margins, it affects behaviour. It trains customers to wait, attracts the most price-sensitive demand, and makes future pricing decisions even harder. Over time, businesses find themselves working harder for less, all while believing they are being “commercial”.

It’s not strategy. It’s panic.

Where marketing really earns its seat

None of this means marketers should be setting prices. But it does mean they should be influencing pricing decisions. Pricing sits at the intersection of customer understanding, positioning, and communication, areas where marketing insight is critical.

When marketers bring research, context, and clarity into pricing conversations, they help the business make better decisions. They help revenue teams understand not just what the market will tolerate, but what it will value. And they help ensure that the price customers see aligns with the experience they receive.

Revenue management decides the number.
Marketing informs the range of numbers that guests will swallow.

The grown-up conclusion

A full hotel that makes no money isn’t a success story. It’s simply a business burning itself out quietly. If hospitality wants healthier margins and more resilient demand, it needs to stop worshipping revenue and start respecting profit.

That doesn’t mean charging recklessly. It means earning the right to charge properly. And that starts long before the price appears on a booking engine. It starts with strategy, positioning, and a clear understanding of who you’re really trying to serve.

Busy is easy.
Profitable is harder.
But only one of them keeps the lights on.