Hotel Revenue Glossary · Metrics
Denied Revenue
Revenue lost when a hotel cannot accommodate a potential guest because rooms are sold out, closed for sale, or restricted. Denied revenue captures the value of turned-away demand and is calculated by multiplying denied requests by the rate that would have been charged.
Why it matters: Denied revenue quantifies the opportunity cost of selling out too early or at rates that were too low. High denied revenue on a date indicates rates could have been higher, or restrictions could have been used to shift demand to shoulder dates.
Worked example: Saturday sells out at 3pm. Reservations logs 22 further enquiries before midnight, and the last rate loaded was A$289. Denied revenue is 22 x A$289 = A$6,358. Set against the 160 rooms that sold at an average A$241, or A$38,560 for the night, the denial says your rate ladder reached A$289 too late, not that A$289 was the wrong number.
Common mistake: Booking denied revenue as money lost. It is the gross value of enquiries priced at the last loaded rate, not proven revenue. Those callers were shopping several hotels and a share would never have converted at any price. Use denials to time the rate ladder, not to write up a loss figure.