Hotel Revenue Glossary · Strategy

Business Mix

The composition of a hotel's revenue across different business sources, typically categorized as transient vs. group, or further broken down by corporate negotiated, rack/retail, wholesale, OTA, and contracted business.

Why it matters: Business mix determines the revenue manager's pricing flexibility. A hotel with 60% contracted/group business and 40% transient has limited ability to move rates on most of its inventory, while a hotel with 70% transient can be more dynamically priced.

Worked example: Of 140 rooms on a Wednesday, 48 sit on contracted corporate at a fixed A$165 and 26 are group at A$155, leaving 66 transient. Only those 66 respond to anything you do with rate. Lift transient BAR from A$205 to A$225 and the ceiling on the gain is 66 x A$20 = A$1,320, and only if all 66 still sell. The other 74 rooms, 53% of the house, are priced already, whatever demand does.

Common mistake: Reporting a soft ADR month as a pricing failure when the mix moved. Sixty extra contracted nights at A$165 pull blended ADR down even if every transient rate rose. Before touching price, rerun last month's mix against this month's rates: if ADR climbs, the pricing was fine and the mix changed.

All glossary terms Market Mix Transient Business Group Business